Prediction: AAdvantage Will Be Added As A Citi ThankYou Transfer Partner

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This post is purely speculation on my part, and I have nothing to back it with, other than my own analysis. But I figured I’d get my bet out there so I can say “I told you so” if/when it happens. 😉

Yesterday we learned about the 2016 AAdvantage program, and in particular the huge devaluation coming to award redemptions, which hit premium cabin awards especially hard.

2016-AAdvantage-Program

The trends in the award chart changes follow what we’ve seen from the competition:

  • Economy class award levels aren’t changing significantly, though the availability of saver level award space is continually on the decline, which is causing more awards on American metal to price at non-saver levels
  • Business class award levels are increasing a fair amount, though for the most part not totally unreasonably so
  • First class award levels are increasing massively, in some cases even by 60%+

Simply put, award redemptions through AAdvantage are becoming less aspirational as of March 22, 2016.

In February of this year I wrote a post speculating about why American AAdvantage isn’t a ThankYou transfer partner.

American Express is tied up with Delta, Chase is tied up with United, and Citi is tied up with American. In the case of American Express Membership Rewards and Chase Ultimate Rewards, points can be transferred to the respective airline programs with which they partner. However, that’s not the case with American.

Citi has the fantastic Citi ThankYou® Premier Card and Citi Prestige® Card, which are extremely valuable cards. They offer a fantastic return on everyday spend, huge sign-up bonuses, and some fantastic perks as well (in particular the Prestige Card).

ThankYou points can be redeemed for 1.6 cents each towards the cost of a paid ticket on American (at least if you have the Prestige Card — if you have just the Premier Card, they can be redeemed for 1.25 cents towards the cost of a paid ticket on American).

If Citi is willing to let you redeem your points for 1.6 cents each towards the cost of a ticket on American, why won’t they let you convert each point into one AAdvantage mile instead? Here’s what I speculated at the time, which I stand by:

I wouldn’t be surprised if AAdvantage were added as a Citi ThankYou transfer partner once the merger is complete and the award chart has possibly been devalued (which is inevitable sooner or later, given that the AAdvantage award chart has more or less remained the same for a long time now).

So my bet is that AAdvantage will be added as a Citi ThankYou transfer partner in the first half of 2016. Again, this is speculation on my part, but it just makes sense. AAdvantage has matched SkyMiles and MileagePlus move-for-move, and has basically decided there’s no benefit to differentiating themselves. I see no reason they wouldn’t play “follow the leader” with this benefit either, given that it’ll likely be a great revenue source for them. And with the devalued award chart, there’s very little downside for them.

Given that American has been focused on integrating over innovating for the past couple of years, it’s no surprise that they’ve been trying to avoid new partnerships. And it’s only in the past couple of years that Citi ThankYou points can be transferred to airlines anyway. But now that the merger is complete…

Bottom line

While award costs are continually increasing, it’s worth keeping in mind that the only people losing long term are those earning miles primarily through flying. While award costs go up for everyone, the opportunities to earn miles are continually increasing, and on cards like the Prestige Card and Premier Card you can even earn up to 3x points per dollar spent.

I’m guessing it’s only a matter of time before these points can be transferred to AAdvantage.

Do you agree with me about AAdvantage likely being added as a Citi ThankYou partner soon? Would you find this to be a valuable redemption option?

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Comments

  1. Since yesterday, AA.com hasn’t been able to book award tickets online. I wonder if it’s a traffic jam with all the folks running to cash out their AA miles before the devaluation?

  2. @BBTBphile – It’s been longer than the last few days. It’s been pretty buggy for a week I’d guess.

    Phone agent waived the phone fee for me without any pushback so they’re aware of it.

  3. @BBTBphile well, I can say that the AAdvantage phone agent I had yesterday to book a CX redemption was by far the fastest and most diligent phone agent I’ve ever experienced. so it may well be they’re getting quite a bit more bookings coming through suddenly.

  4. Iv’ve been getting 60,000 mile sign up offers for the Citi AAverage FF card every week this month. Each one comes with a fancy package in paper mail.

    I expect they’re pushing the card fast because of devaluation. That would agree with Lucky’s guess that AA wants to sell more cheAAp miles.

  5. I had the Citi® / AAdvantage Mastercard card 3-4 years ago. Do you know if I would be eligible for the current 50k offer? It says new card holders only, but is Citi currently enforcing that rule?

  6. I think you may be right. Citi TY might very well add AA as a transfer partner now that the AA award chart has been devalued, thereby not flooding AA with tons of TY award transactions that are even better/cheaper than its own AA award transactions.

    I also expect that Citi TY will consider a TY Business card in the coming months, if not sooner. Chase URs and Amex MRs already offer such business cards, and do very well by that business spend. Citi only offers the AA CitiBusiness card, which is much less valuable since it only accumulates AA miles. Citi TYBusiness would be the perfect competitor and complement to its Citi TY line-up. The only thing Citi might be concerned about is that it might savage some of its Citi Executive and CitiBusiness AAdvantage cards.

  7. I agree it is plausible, and even probable. With Barclay’s being shoved out of the way following the merger, it would further strengthen the tie-up between Citi and AA, at minimal incremental cost to either party but with tangible benefits and incentives for their clients. For AA, offsetting the devaluation with more ways to generate miles is a positive message. For Citi, with Amex going down the drain and Chase becoming stringent with UR, it gives them a chance to poach more customers.

    If it does happen, I believe it would occur after the new award chart comes into effect, so sometime between March 23rd and June 30, 2016.

  8. I hope AA is business savvy enough to NOT do this. Every time I see someone pull out a Southwest or Delta or United card at a shop, I shake my head and laugh. Don’t they know they could earn Ultimate Rewards or Membership Rewards faster? Don’t they know how much better those points are? There are people out there with AA cards front of wallet, and TYP transferability just cannibalizes that spend.

    On another note, as a non-elite living in a California hub, it’s pretty tough to find AA awards that get you more than 1.6 cents per point, especially with the $75 close in fee. And a 115,000 award in business to Europe… I’ve now flown to Europe in business for less than $1840 (115*1.6) six times. In the last year!!

    I think these devaluations really hurt the value proposition of miles as a credit card bonus relative to 2 pennies of cash.

  9. @Jon – If it was 3-4 years you should be able to get the bonus miles. I talked to a CITI rep last night and she stated the wait period is 18months on matching reward program card products (Like AA Exec + AA Plat Select) to get the sign up or spend bonuses unless you can do both within the 8 day window it seems. Wait too long like I did ( 🙁 ) and the 2nd one won’t qualify for the bonus (though you can still get the card, but then whats the point ?)

  10. I have both TY Preferred and TY Premier card and have points on both.

    If I book any flight on TY travel website, do I get more value for flight booked with points from Preferred card than the Premier card? The flights I am looking to book are non AA flights. I thought I would get more value with Preferred points only on AA flight.

    If Preferred card points are better for flights, can I combine the points from Premier to Preferred and my Premier card points become preferred card points?

    The combined points won’t expire in 90 days and still can be transferred to those transferable partners?

    Thanks

  11. I said the EXACT same thing in a text to my wife yesterday when the details of AA’s devaluation were released. I think it’ll happen before May 1st, but only time will tell!

  12. Did this article really need the links as referrals? You couldn’t have just listed the card services tied up with each program?

  13. This is by no means a done deal. The AA card program is out for RFP at the moment so until that gets settled next year and a new contract is negotiated this will not happen. It’s also not yet clear Citi will keep the main program. It’s not inconceivable that Barclays or Chase could win the program.

  14. @stvr I too use cards in my wallet that earn less points than others quite often… When I’m trying to meet a minimum spend.

  15. Hi there
    Love your website! Do you have any further thoughts on AAdvantage being a partner in Citi Thank You? Do you think this is still likely this year?

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