It’s devaluation season in the airline industry, and as a consumer it sure is tough to watch.
First we saw Delta announce a pretty big SkyMiles devaluation back in August. It wasn’t pretty, but also wasn’t more than I was expecting.
Then a couple of weeks ago United announced their MileagePlus devaluation, which was massive, in particular for premium cabin redemptions on partner airlines.
It seems Delta SkyMiles loved the idea and said “hmmm, why didn’t we think of that?” They responded by devaluing their chart in the interim, with no advance notice whatsoever.
So the only legacy carriers this leaves that haven’t announced changes to their award charts are American and US Airways.
During the DOJ trial I was confident neither American nor US Airways would announce a devaluation. They’d have been stupid to, given that the DOJ was trying to block the merger in the name of defending consumers and the lack of competition, and it would’ve hurt American or US Airways’ case if they had devalued their frequent flyer program during those proceedings. So they didn’t. But as of Tuesday the trial is over and American and US Airways merger is officially being approved.
So now what? When will either or both carriers announce an award chart devaluation?
The way I look at it, there are a few ways this could play out:
American and US Airways could wait to make award chart changes until they have one combined frequent flyer program
It’s not in either airlines’ best interest to piss off frequent flyers, so they could just wait till a new combined AAdvantage program is announced before devaluing their charts.
This option seems extremely unlikely to me, as it will likely be early 2015 before the two frequent flyer programs are integrated, and I can’t imagine American and US Airways would keep their award costs so uncompetitively low when the competition is charging so much more.
American and US Airways could announce independent award chart devaluations soon
When one airline makes a negative change it’s easy for another to follow, since they’re not going to get all the blame. Ultimately when American and US Airways do devalue their award charts I don’t think it’ll be quite as bad as United’s program changes.
So I wouldn’t be surprised to see American and/or US Airways announce award chart devaluations in the coming weeks, effective as of early next year.
If they modestly increase award costs – say to slightly below Delta’s new levels – I don’t think they’d get that much flak, even if these are just interim increases. I mean, after Delta announced their devaluation they announced another devaluation valid until their “major” devaluation, which goes into effect the middle of next year.
American and US Airways could wait to make award chart changes until they “harmonize” frequent flyer programs
While their actual frequent flyer programs won’t likely be fully integrated until early 2015, they have announced that they’ll offer reciprocal frequent flyer benefits as of early next year. I wouldn’t be surprised if at the same time they harmonized their programs a bit without fully mirroring one another, like American adding a fourth elite tier and introducing unlimited complimentary upgrades, etc.
It could be they both announce new award charts at that time, which will probably both mirror one another. I expect this would be around the same time that miles can be transferred between accounts, meaning Dividend Miles could be redeemed for travel on OneWorld, for example.
Of course I hate to see these devaluations, but the best we can do is prepare ourselves properly. Realize that the best values from their respective award charts are probably going away. While I really hope both airlines provide advance notice of award chart changes, after last week’s Delta devaluation I wouldn’t count on it. So if you’re eying award travel, book now. Not only does it ensure that you get the old levels, but availability will generally be better than after a devaluation is announced, when lots of people will try to lock in similar awards.
Did I miss any possible scenarios for a devaluation? Which do you think is most likely?