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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.
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…
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?