American Increasing Standard Award Rates To Australia

Last November we learned about the changes American is making to the AAdvantage program in 2016. This includes a pretty substantial award chart devaluation, which kicks in for bookings as of March 22, 2016. Some of my favorite awards are going up in price significantly.

What I’m most concerned about are the saver level award rates increasing. These are the award rates for travel on partner airlines (like Cathay Pacific, Etihad, Japan AirlinesQatar, etc.), which are only ever bookable at the saver level.

Cathay-Pacific-First-Class-777-39
The cost of Cathay Pacific first class awards using American miles is increasing significantly

However, there are also some increases in the rates for standard level awards, which are the “rule buster” awards when there aren’t saver level seats available on American (this isn’t valid for travel on partner airlines).

American has just announced that they’ll be increasing the cost of standard level awards on their routes between Los Angeles and Sydney/Auckland for bookings as of March 22, 2016.

American-777-First-Class-01
American’s 777-300ER first class

Per an American Airlines spokesperson:

Since the SYD route launched last December, we’ve taken a look at how we control our inventory for MileSAAver award bookings. It’s resulted in some changes to how and when some award fares become available to our customers. We will also be making changes to some international AAnytime Award levels. We’ll be updating our award charts today to reflect an increase to AAnytime Awards for premium seats between North America and South Pacific.

How much are standard level awards between the US and Australia/New Zealand on American increasing?

For one-way business class awards:

  • AAnytime Level 1 awards will be increasing from 140,000 miles to 175,000 miles
  • AAnytime Level 2 awards will be increasing from 175,000 miles to 195,000 miles

American-Award-Australia-1

For one-way first class awards:

  • AAnytime Level 1 awards will be increasing from 180,000 miles to 220,000 miles
  • AAnytime Level 2 awards will be increasing from 210,000 miles to 260,000 miles

American-Award-Australia-2

These are sizable increases, though personally won’t impact me, since I can’t imagine ever choosing to redeem miles at the non-saver level for international premium cabin redemptions.

Contrary to popular belief, standard award redemptions can actually be the most costly for airlines. That’s because they can be used to purchase the very last seat on a plane, which could very well otherwise be sold at a high cost.

Meanwhile if an airline is opening up saver level award space, odds are pretty good that there would have otherwise been empty seats on the plane, or at least that they could manage inventory in such a way to avoid turning away high yield customers.

For example, take the below flight between Sydney and Los Angeles, which has one first class seat left for sale, at a cost of ~$11,000 one-way (hopefully no one actually pays that, but you never know).

American-Award-2

Meanwhile that last seat can be purchased for 210,000 miles. While that might seem like a lot of miles (and it is), American would be taking a huge loss if someone redeemed miles, assuming someone else would have bought that seat last minute.

American-Award-1

Of course that’s a huge “if,” but my point is that standard level award redemptions are more costly to airlines than most people would assume.

American-First-Class-Sydney - 3
American offers enhanced service on their flights to/from Sydney

Bottom line

The increases don’t seem too unreasonable, not that I’d ever redeem at those prices anyway. American used to have the most lucrative standard award options out there, as they were typically priced double the saver level, with no capacity controls. In 2014 American devalued that by introducing multiple levels of standard awards, so I haven’t seen much value in the program since then anyway.

For what it’s worth, Delta’s award rates between the US and Australia in business class top out at 375,000 miles one-way. Not that they publish award rates, and not that they’re exactly an airline to use as a model of how to treat frequent flyers, but I figured I’d provide that context.

Delta-Award

What do you make of American increasing standard award costs between the US and Australia/New Zealand?

Comments

  1. It makes me happy that I booked my flight in January!

    I’m flying first class AA DFW> LAX > SYD for 72.5k miles and return via Qantas business SYD > DFW for 62.5k miles in September.

    This might be my one and only chance to fly first class to Australia.

  2. Never will fly DL to Australia in D1 on miles. Let’s hope Virgin DL redemption stay low when VA gets their new Biz.

  3. Remember way back, my favorite award was TWA’s 75% off any business or first ticket. And you’d still get miles for it.
    Will soon be that unless you’re doing mfg spending to boost points, can seldom afford it.
    You were likely in diapers back then Ben.

  4. @Adam: They do, but availability is hard to come by! The LAX-BNE route has the best availability.

  5. Perhaps QF put pressure on AA to increase their rates as they were so embarrassed at many miles are needed for their own FF program to fly the same leg (plus they add fuel surcharges). Spare a thought for us Aussies.

  6. So my wife has been thinking about a trip down under. We have lots of AA miles & some Chase UR & Citi TY points. What routes should I be focusing on for next winter to find 2 biz class seats? I know I could connect through Hong Kong or Tokyo, but I’d love to fly direct if I can find it. Thoughts anyone?

  7. @Adam: I think the opposite. If I have Delta miles to burn I would probably fly them to Australia. Not that is a good redemption but that is the only way I would fly them. I would never pay to fly Delta to Australia since unless their fare is half of the competition which I doubt there are much better ways to fly to Australia in business class than on Delta One.

  8. I have never seen a saver award in First out of LAX to SYD for any month on AA
    Searched numerous times for up to 8 months
    210k will obviously be the new going rate
    Have seen business class seats at saver levels more recently
    Was able to book Virgin Australia easily in Business and they did a great job
    Ill be banking in other programs

  9. Will ad
    Qantas is just as bad as AA typically though out of LHR to SYD /MEL seats can be found in First

  10. @Lucky,

    Regarding AA Anytime awards in general, I think the biggest impact item with the recent ‘segmentation’ of the AnyTime awards bucket(s) has been to those that need to position from a smaller market to a hub city for an international and/or partner redemption.

    On the last two attempted bookings I’ve tried to make, I could actually find Saver award capacity (say on BA, or CX), but AA has gone to a much more Delta-like domestic (coach or first, doesn’t really seem to be too different IME) mileage award rate policy, whereas Saver has become virtually non-existent, but the Anytime award is actually a fairly reasonable premium over Saver. My example was AA was asking 20K miles for coach vs. 12,500 miles. Obviously, not ideal for those of us looking to maximize our redemption values, but not necessarily unreasonable for secondary markets to be asking 40K miles for a domestic round trip with high seat availability.

    Like I said above, though, this model crushes our aspirations of taking a ‘free’ trip using our miles when booking a partner ticket, since you cannot combine Saver & Anytime awards to piece together a viable itinerary!

    Thus, I was forced to choose whether to come out of pocket to position to the hub, or look for *A alternatives. In the last case, luckily *A could accommodate me. The other time, it was $ out of pocket.

    Unfortunate, potentially unforeseen (should I give them the benefit of the doubt?), consequence of their new AAdvantage policy decision…

    theBOAT

  11. Wife and I had lots of AA miles to burn before the (3/21) devaulation, and after reading articles here and elsewhere on boardingarea.com, were able to score first class on Qantas A380. The catch is we’re flying eastbound from D.C. to Heathrow (British Airways economy) for a one-day visit/layover, and then Qantas First to Dubai and onto Sydney. On the return, we continue eastbound and are aboard separate QF A380 flights because Qantas released only one First seat on our respective flights (wife has SYD-DFW while I have SYD-LAX before connecting on AA back to D.C.). So a round-the-world trip is coming up… I’m calling it the “sun never sets on the British Empire” tour.

    Does anyone find it ironic that AA’s award chart (and lack of saver award seats) pretty much guarantee fliers are better off using their AAdvantage miles on a foreign carrier (rather than on AA’s own flights)? That, coupled with U.S. airlines’ reputation for mediocre flight service (versus most Asian airlines and Qantas) and lack of A380s made it a no-brainer decision to seek Qantas for me.

    @Mike — Try ExpertFlyer (and their free 7-day trial) to search your options for award travel. You’ll probably have to do a lot of searches (for different airlines and routes), but you can bookmark searches to save time. I saw Qantas had lots of economy award seats available to SYD, but obviously you are aiming higher and will probably have to go on a fox hunt to find the business or first class seats you want. Good luck.

  12. As an Australian generally making 4 trips to the US annually (out of my own pocket) the award costs, and availability, are now laughable! Buy a AAnytime award? ROFL !! Never in a million years! Much better to fly via AKL, HKG, NRT/HND or ICN. Hell, why not SYD-DXB-JFK ?? The variations are endless. Oh, none of this involves using AA miles. So f*** you, A(dis)Advantage! You will have to do a Avianca-like 125% bonus miles to get back your Australian customers! Memo to Doug Parker: don’t listen to Alan Joyce of Qantas~ his ‘good ideas’ only work in boom times, where world aviation is right now.

  13. @Glenn T: SYD-AUH-JFK involved AA miles and should still come cheaper than using Qantas miles on EK on that route.

  14. @Daniel~ Don’t even think of QF miles for that route unless you have bucketloads to burn! Use Alaska MileagePlan!

  15. @dwonderment:

    “I have never seen a saver award in First out of LAX to SYD for any month on AA”

    I got an award when I booked in January, for a flight in September. It took me 5 minutes to find 🙂

  16. 2 years ago I flew QF F A380 on a saver award out of LAX.

    I booked it 24 hours out!

    Honestly QF F is not worth the miles at all.

  17. Would disagree with your assessment of QF First! It is streets ahead of the current AA offering, where the elderly crews have been specially trained to try to match QF (and fail badly). Can’t teach an old dog new tricks I suppose. A request to make up the bed for sleep is met with “Do it yourself!” WTF?? Qantas are pro-active and happily do it while you change into your PJs in the restroom.

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