When Will American Airlines And US Airways Change Their Award Charts?

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.

Bottom line

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?

Comments

  1. I’ve been thinking about this myself since I have a substantial amount of miles in both programs. I can’t say that I really have an idea about how/when a devaluation will play out other than I think the final product will look more like USAir’s current structure rather than AA’s. That’s unfortunate, because I’ve always considered AA’s award structure much more generous and flexible than USAir’s – especially for travel to Europe. One item that I especially like about AA’s structure is the ability to book most 1 way tickets for half the redemption cost of a round trip. By contrast, USAir makes you burn the full round trip redemption amount for 1 way travel. I enjoy AA’s flexibility on this – example, my wife and I just returned from a transatlantic cruise where we used miles to get Barcelona and used the ship as our return transportation mode. Redeeming via AA was less than 50% the redemption cost the same tickets would have required via USAir. If there was one feature that I would like the new program to retain it would be the ability to claim a 1 way booking fare at 50% of the round trip booking.

  2. I’d love your advice… I am planning a trip from Washington, D.C. To South Africa for early December of 2014. I have roughly 250K dividend miles and another 65k a advantage miles. I want to use miles for 2 business class (or FC) seats but I’m not sure if I should wait until I can combine the miles, or which alliance will get me the best experience. Thoughts?

  3. @ Matt F — Well ultimately you’re not going to be able to book travel for December of 2014 until January, and it’s anyone’s guess what happens in the next several months. So it’s tough to give any good advice now, given that you may not have a choice by that point, and that one or both airlines may have devalued their award charts by then. So just stay tuned! 🙂

  4. For Dec 2014 travel you will have to wait until January-ish anyway, right? You could get business class using your DMs on Ethiopian or South African if you can find seats. I think it’s usually best to book sooner rather than later if you find availability for the time you want.

  5. Here’s an idea for AA: maintain the status quo! It favorably differentiates AA amongst both business and leisure travelers alike! I’m a case in point. I currently favor AA because of its friendlier award chart. If AA devalues a la the other carriers, then they will be no different from the rest, and I will be indifferent towards them. I’ll also no longer need my AA co-branded credit card. Heck, AA could even generate additional business by advertising its more favorable award opportunities. Then, however, they might need to make more award seats available. . .

  6. Thanks Lucky for help and tips. From recent news on devaluation, I have used most of UA miles. For AA and US miles, I wish they have a combine miles feature soon, so I can have enough miles for another business roundtrips. Hopefully, the devaluation does not go the way UA did (different price on partner), after Feb 1, UA is mainly used for free ticket on economy. UA credit card is my top dumping CC list

  7. Could you change your handle from Lucky to Cassandra? Stop doing the airlines work for them. You’re getting people used to the idea that AA will be devalued soon. You’re making it easier for Parker. Let there be an uproar when it happens.

  8. tend to agree with @Nun . Why keep talking about potential devaluation over and over? it looks like you want this to happen.

  9. the fair thing to do ( not likely) is only up the award level for new award miles and leave awards at the old level that were saved up at the level the customers
    “signed on” for.

  10. lucky – given the likelihood of the new american changing to unlimited complimentary upgrades, when do you think 500 mile upgrades will be discontinued/no longer usuable for aa plats?

  11. Nobody listened to Cassandra – that was her curse – so calling Lucky Cassandra would mean the airlines *aren’t* listening to him.

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