Posted by William Charles on June 3, 2019
Airline Rewards

Published on June 3rd, 2019 | by William Charles

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[Confirmed] American Airlines Working On Dynamic Award Pricing, Plans To Ditch Award Charts

Update 6/3/19: According to Gary Leff this has now been confirmed.

This shouldn’t come as a surprise after both United & Delta have ditched award charts but there is a rumor circulating that American Airlines is already actively working on doing the same and moving from award charts to dynamic pricing. In a recent interview with Gary Leff from VFTW American Airlines said they were researching ways to enhance earn and redemption opportunities and a recent change to the award search tool also both point to moving in this direction.

I haven’t heard of any timelines on when American plans to make these changes and nothing has been confirmed yet, but I’d be incredibly surprised if this doesn’t happen and I’d expect it to happen sometime this year.



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Grant
Grant

Luckily I have burned most of my disAAdvantage miles

Abey

That’s why they call it AAdvantage because the advantage is to AA.

Peter
Peter

Nice one

Liam
Liam

LOL 🙂

ben
ben

You are a truly a cunning linguist

Lrdx
Lrdx

Of course they do. Copying actions of the competition is what successful businesses do. /s

havai
havai

If that was actually true, they’d have free first two bags, no fees on changes, and award ticket prices keyed to price of flights.

Budget Jetsetter

Southwest isn’t their competition. With no business/first class and open seating they cater to an entirely different subset of flyers.

Jim
Jim

They always constantly worry about how to screw their customers and always copy those who do wrong

Jr
Jr

AA worst airline ever. Once i use all my miles i will never fly AA again

qmc
qmc

If only you didn’t keep “earning” more?

Chucks
Chucks

I always hear people say that right when they’re angry but never actually encounter people that won’t reconsider when a particular flight is substantially cheaper or more convenient than other options

Matt P
Matt P

Had a bad experience with Spirit once. Never flew them again and never will even though I could have saved money several times over the years.

Gabe
Gabe

After flying on Volaris, I will never knowingly take a budget airline again

Pbjclimbing
Pbjclimbing

I don’t understand this mindset. I have had bad experiences with most airlines. It happens. I will not pay more to fly another airline over AA. I will pay more to fly another airline over China Eastern.

MJG
MJG

I’m going to be the contrarian here and say that, depending on your travel preferences, the move to dynamic award pricing tied more closely to the cash price can be a good deal. Yes, it makes massive devaluations possible and harder to detect, but it also opens the possibility of much more flexible usage and better value overall if you don’t value super premium travel. I for one am fine with economy seats in almost all the travel I do, and I’m usually quite flexible on travel dates. So I actually love SW Rapid Rewards. Because I can wait for a great cash price and pay the corresponding amount in points, which is really the best of all possible worlds value-wise.

Lrdx
Lrdx

And what do you base AA or United tieing award prices to cash prices on? Delta doesn’t do that either.

Chaser123
Chaser123

Nope. I like my first class. I know I am in a minority but I love AA miles. I love AA miles for first class to Asia and Middle East. I do not like this 🙁
I am hopeful that they don’t go dynamic on partner awards.

DeauxBois
DeauxBois

While I agree in part, the problem is that soon NONE of the four largest US carriers will have award charts for flights on their own metal. Currently, you can fly with an airline using dynamic award pricing for domestic economy flights *and* fly with an airline using award charts when you want to take advantage (AAdvantage?) of fixed pricing for international and/or premium travel. Soon, those options will be more limited; and generally, more options are better for consumers, even if you personally only utilize one of those categories of redemptions.

So while I also have deep, abiding love for Southwest’s domestic economy redemptions and greatly value the dynamic pricing model for that purpose, having US airlines remove the collective option of international/premium travel from their own metal is decidedly a devaluation for the US travel market as a whole. When you factor in the increasing likelihood that foreign carriers will follow suit, I think the outcry is pretty justified.

Vet&Banker
Vet&Banker

I understand your viewpoint, as the vast majority of my travel is economy. But there are 2 major considerations regarding this change.

1.) This devaluation removes any and all possibility that you will ever even have the OPTION of premium international travel with your rewards. No bucket list trip, no honeymoon, no anniversary, nothing. You can always fly coach but this means you will *never* fly anything else with rewards.

2.) SWA, JetBlue, and soon the Big 3 will now treat your rewards as essentially a coupon for future business. Again that’s fine, but while it’s definitely nice to pay less for something, it means you’re also mentally being conditioned to expect nothing special with your loyalty.

This is business marketing, not a conspiracy theory: removing excess incentives changes consumer mindset to an expectation of “basic” service. The creation of basic economy fares, changing 3-class flights from “first/business/coach” to “business/premium economy/coach”, dynamic pricing, etc: these are not random or unconnected strategic decisions. Average & slightly more frequent flyers are being “taught” to expect airplanes to be buses in the sky. If all you’ve ever known or expected is SWA, you’ll hope your fellow passengers provide you with the chance for a decent seat and overhead bin space, instead of wondering why the airline doesn’t provide enough for everyone as standard.

James L
James L

I agree with the OP. Lots of the complaints here have nothing to do with dynamic pricing–they’re about how SWA runs their airlines, or about premium awards. The only downside of dynamic pricing is the lack of transparency. That is admittedly a major issue for me, but the upsides are big as well. For someone who is a flexible traveler, flies economy, and does usually short-haul trips on the West Coast, the Delta dynamic pricing has been fantastic. I regularly find 11k roundtrip SEA-SNA, which nets me a valuation of around 2 cents/point. On legacy carriers, I’d be doing 12.5k one-way for the same journey, so most of my points just sit there, which over the long term have been devalued anyway when point costs have gone up.

As for those saying this is a slippery slope for devaluation, well that’s been going on for a while now. We should push back against devaluation, and I already do that by doing most of my travel on SWA, Alaska, and Jetblue, which have consistently shown they care about their FF program by keeping valuations high.

aubergine
aubergine

great comment James L. totally agree!

Nun
Nun

MJG, Don’t know how you can make that argument. It might be good if you only fly domestic economy and always ticket well in advance. Or it might be horrible if you take a glance at DL prices on any flight.

If you need a ticket at the last minute, maybe for a family emergency, forget it.

If you want business or first class flights as I do, removing the chart is a death sentence for awards. If AA is very generous, they’ll use 1 mile per cent as the value. (Hint: They won’t.) Even then it sucks, because awards aren’t given the same treatment as cash ticket– no bonuses, no EQM, no stopovers like a cash ticket, and you’re put at the bottom of the list when things go wrong. I’ve been bumped from a TATL business seat before and have status. The reason for choosing me was the fact that I used an award.

philco
philco

@MJG The flaw in your argument is you are assuming AA is going to tie dynamic pricing to cash price like SW does but we do not know that. AF and Delta have not done this with the move to dynamic pricing. I don’t know enough about United to comment. But I think AA will follow the Delta and AF model and not the SW model. While I see no value in SW for my travel at least they are transparent in the value of their points (more or less). I doubt AA will go for transparency.

Somebody
Somebody

I’ve been getting awesome redemptions with the current pilot program they’re running. Maybe it’s because I live in an AA hub, but my recent domestic flights have all been 6k-10k instead of the normal 12.5k. If they keep this value I’m all for it.

Chucks
Chucks

Gotta disagree. For one, as awards become unpredictably priced, it forces you to run additional searches for award flights. Unlike SW, where you can be sure of the rate you’ll get on an award, this will be up in the air. And you can almost certainly bet that AA will jack up mileage rates when cash prices are high-there’s not going to be deals to be had. Would be absolutely floored if AA creates a consistent value for their miles.

Davezilla
Davezilla

But you see, this is their trap. They’ll typically roll out the awesome awards at the beginning so people don’t complain…. then they’ll drop the hammer

sdsearch
sdsearch

First, AA has given no indication of going to award pricing tied to cash prices. Delta doesn’t do award pricing that way, they simply require ridiculous amount of miles almost no matter what the cash price is! The only things that Delta parallels of Southwest is taking away the “appearance” of lack of award availability. There’s “always” an award available, if you’re willing to pay through the for it. As opposed to the classic legacy award system, most of the time there is no “availability” of saver awards (and most people don’t look at standard awards because they focus just on saver awards). So it’s replacing the complaint about “there are no awards available” with at most the simpler complaint that “these awards cost too much” that the big 3 want to achieve with this.

Second, the issue with a program like Southwest’s where awards are extremely closely tied to cash prices is that it’s never a better value or a worse value to use points vs cash. So how do you decide when to you use which? Basically if you have points, you might as well use them up since they won’t be any differently valuable later, and once you use them up there wont’ be any decision to make, you’ll always pay with money.. With programs where awards are not that closely tied to cash rates, you can find better values at some times and worse values at other times. But it’s not as simple, so I guess people who care more about simplicity than getting the value might like the Southwest system.

Rusty
Rusty

Dropping the award chart is just a sneaky back-door tool to devalue the miles held by the public, thus improving AA’s balance sheet.

Charlie
Charlie

And a good accountant should be able to verify this by comparing AA’s future balance sheets to the 2018 and 2019 balance sheets.

Rusty
Rusty

I AM a good accountant, that why I look at things like this. 🙂

Aleks
Aleks

Have you been noticing the AA changes to various levels of Economy and Business award prices lately? It seems like the deval already happened and there are Level 2 and 3 Everyday award prices on many of the routes, especially direct ones. Some of the direct routes and certain flights system does not even pull for mileage redemptions. That’s the current state of affairs at AA.
So I say they already implemented close-to-price-point system without even telling, therefore AA don’t need to hide charts or through them away. With Everyday Level 1, 2 and 3 level awards it’s already implemented. Dynamic price model is fine – but as long as miles have a set value. In case of United, Delta and now American, they just hiding the reasoning – making it difficult for the customers to plan ahead and for them to be transparent (like Southwest).
And with new online booking engine it is easy for AA to hide what level of award any particular ticket it is. Shame on AA for doing so. Their mile credit cards and mile sales will suffer greatly going forward, along with United.

MrDioji
MrDioji

Yeah 50k one way in domestic economy (PHL to SFO in July) is ridiculous. Cash is $370. Wouldn’t mind spending 37k miles on that one…
Actually the cash price on a couple of the times is closer to $200, and it’s still 50k one way.

PoorChurner
PoorChurner

Increased bag fees, basic econ everywhere and no award charts. Same chit different airline

Gary Leff

To be clear American has introduced dynamic pricing already and plans to expand this. However that is entirely compatible with also offering saver award inventory at published chart pricing. I have not said that award charts will be eliminated the way they have been at Delta and United. It wouldn’t surprise me if that happens, though I do not believe it is imminent.

Peter
Peter

Thank you for the insight GF.

Carter
Carter

AA’s greatest fear is the mere possibility of distinguishing themselves from their competition in a positive way. Its so odd that they old slogan used to be “great is what we’re going for”, when in reality, great is precisely what they strive to avoid.

Jim
Jim

Worst airline mileage program! Domestic coach non stop one way cheapest awards cost at least 35,000 miles one way. Most of the time it is 60,000 miles one way on coach. . 40000 miles one way coach to San Diego from Chicago? And 60000 one way coach to Toronto? Almost zero saver availability on any date. Pathetic international partner awards and always with endless connections . They should be sued about the deception and how they tell us we can use the awards.

iahphx
iahphx

Actually, it has gotten easier and cheaper to use your AA miles in the past year or two. Sometimes it requires a connection. Sometimes you have to wait for a deal. FWIW, AA told investors on their last quarterly earnings call that their decision to increase award availability was materially depressing its unit revenue.

Personally, I’ve gotten crazy good deals using AA miles in the past year — albeit all for coach flights. Between 5,000 and 8,000 miles for transatlantic and transcon flights. All of these have been publicized on the blogs. Their program of offering reduced domestic mileage awards for Citi cardholders from certain cities (lots of cities) is also very good, albeit not widely known.

That said, if you expect to use your miles for a specific trip on a specific date at a good non-dynamic price, you will usually be disappointed. But it’s been that way on all the major airlines for years.

aubergine
aubergine

I agree with the above. I’ve gotten some great deals on hard to fly into and $$$ ski town flights. I don’t think you can book American Eagle flights with Avios either, so a useful thing that one can’t get with other funny money currencies.

That being said, I don’t go hugely out of my way to give my AA cards any spend.

Newbie
Newbie

All these devaluations and i am thinking of applying my first AA and Delta credit cards in my life. I missed the bus. I have already traveled half the world with cash
oh well… Better late than never. My first credit card in 1996.

Crazy Dog Lady
Crazy Dog Lady

Welcome to the hobby, Newbie!

Money
Money

How do you get AA mailer?

LAXJeff
LAXJeff

D0ug Parker couldn’t trip over his feet fast enough to ruin AAdvantage.

lilurbanachiever
lilurbanachiever

Used to be a great program.

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