American’s Most Expensive Award Tickets Are About To Get More Expensive

Contrary to popular belief, standard award tickets can actually be the most costly for airlines to offer. While saver level awards offer the best value to consumers, typically airlines are able to offer them in a way that minimizes lost revenue. This is either because those seats would otherwise go out empty, or at least they can adjust inventory and revenue management so they’re only displacing the cheapest possible fare.

Meanwhile standard level awards can often be used to redeem for last seat availability, and those are seats that could otherwise be sold at the full fare cost. Even when people are redeeming substantially more miles than the saver cost for one of those tickets, they can cost the airlines dearly.

So over the past several years we’ve seen a lot of increases to standard level award costs. In 2014 American adjusted their “standard” award rates. For years American was by far the most generous in this regard, as standard awards were roughly double the cost of saver awards across the board, even for last seat availability.

However, they finally adjusted that, and added a couple of tiers of standard awards, known as “AAnytime awards.” Here’s what their current chart looks like:

American-Awards

Since then American has also added several tiers of standard awards beyond that.

In March American announced that they’d be increasing their standard awards costs for flights to Australia & New Zealand, which are still fairly new routes for them. At the time they raised the cost of AAnytime Level 2 business class awards to 195,000 miles, and the cost of first class standard awards to 260,000 miles.

American-777-First-Class-01

Well, American will be adding several higher AAnytime award levels for travel to the South Pacific for bookings made starting in late September. Per a message I was sent by an American spokesperson (bolding mine):

In late September we’ll be adding several higher AAnytime levels for the South Pacific. The levels will apply to the premium cabins on flights to/ from Sydney or Auckland.  There will be no changes to the MileSAAver levels or the AAnytime Economy mileage levels. After launching our Sydney route about a year ago and reviewing the years’ worth of data, we’ve decided that some dates merit higher AAnytime levels in business and first class. For business, it could be up to 375k miles and for first, up to 420k miles.

I appreciate them giving me advance notice of this, and I actually don’t have a problem with airlines increasing standard award costs as such, given how costly it can be for airlines to provide these seats. At the same time, I still don’t actually understand how American’s standard award pricing works, as I explained in a post last week.

American technically has two levels of AAnytime awards, but they still have lots of more costly standard awards without published prices. For example, as of now a ticket between Los Angeles and Sydney can cost up to 195,000 miles in business class or up to 300,000 miles in first class, even though that’s not actually published.

American-Awards-2

American-Awards-1

So this change won’t impact a vast majority of people, assuming you like to redeem at the saver level. However, these are some significant increases for standard award costs to Australia and New Zealand.

My real beef here is that American consistently has higher standard award costs that they don’t publish, and they seem to be dynamic. I don’t mind that on the surface, but I wish they’d publish the maximum possible cost for each award type. Otherwise what’s the point of saying how much a standard award costs?

But since American is following the lead of Delta, I suspect the long term goal is simply to make a mile worth a specific dollar amount.

American-First-Class - 1

Comments

  1. Figure it won’t be much longer before American completes their race to the bottom. One papercut at a time they are reinventing how to devalue themselves. World’s Greatest Flyers, LOL

  2. This won’t affect pricing of AA miles for Oneworld partner travel, right? Isn’t Oneworld travel more preferable to AA for visiting the down under anyway?

  3. This is why BA will always be better. Even when they make crappy cuts to their service, they’ll always be better than AA, though that isn’t really a complement

  4. Two weeks ago we books roundtrip business class saver flights on AA into Sydney and out of Auckland for next year and it was 160,000 roundtrip. This makes me even happier that I jumped on that deal for the few hours it existed.

  5. What a Delta copycat!!!! Are you sure Mr. Anderson did not join AA Board of Directors after he retired from Delta?

  6. AA has become a complete joke. The “award chart” has been meaningless and more wishful thinking than anything else. Standard awards have “values” that can vary by several hundred % with no explanation other than “we can get away with it”. This has been for several months (maybe more than 1 year). Delta is the same piece of s.

  7. This is the same counterproductive thinking that led to the incomprehensible paid fare structures of the past. No matter how good the deal, the consumer was always left with sense of having been screwed somehow. Why are they going back to complexity?

    If AA/DL/UA need to eliminate their generous FF privileges, then they should simply phase in a new structure that matches the successful credit card points, e.g Citibank Prestige. Announce that a point is worth $.01 per mile and be done with it. Simple and effective.

    But the same tricky fare pricing that drove most of them into the ground is being re-invented here and it feels deceiving.

  8. That AA chart is only going to get worse once PEY (premium economy), kicks in. If AA was a bond, I’d grade it as junk status.

  9. Thank goodness…last week I booked 2 First Class LAX-SYD round-trips (different dates) at 110K per person/OW for me and my husband for May 2017. I also was able to book same dates Business Class IAD-LAX-SYD round-trips at 80K per person/OW for my mother.

    I had thought the standard 175K Business Class and 220-260K First Class redemptions were bad enough–but still attainable. The new redemption levels make it nearly impossible for anyone to have enough points to redeem (though that will make it far easier for those with massive credit spend to accumulate the miles and then have easy access to those awards).

    Perhaps this is AA adjusting the redemption rates in anticipation of finally allowing Citi TY points to be transferred to AA? Or perhaps this is AA adjusting to the fact that so many SPG elites are dumping their SPG points in anticipation of the Marriott merger that AA feels it has no choice? (I’ve dumped at least 800K SPG points into AA miles to get some amazing awards before further AA devaluation in the past year alone…and plan to dump more into Lufthansa now.)

    So much for AA being the savior that everyone thought they’d be.

  10. @Justin H.

    Partner awards price at the saver level, so 110k should be good until the next devaluation.

  11. Is AA blocking premium space on Qantas? A few weeks ago there was sporadic F available for next year between LAX and SYD . I found it first on Alaska and then went to American because I want to use up those depreciating points; no QF seats listed! I double checked on British Airways and availability was there too so it wasn’t a phantom on the Alaska website. I didn’t book but thought it was odd.

  12. This is why I don’t worry about accumulating AA miles anymore. It is all about flexible point programs for me.

  13. Since the airlines value a mile at 1c and sell it to banks at 1c, (and consumers at 2c each on “sale”)
    It is time to get a cash back card and get 2c cash back

    300k miles each way = 6000$ at 2cpm each way = $12k r/t on AA metal.
    I would rather pay much less and go on Cathay or Qantas and go “anytime” on a “cash award”.

  14. I think it’s possible that they realized that we’re dumping our now less valuable mile stashes on their new routes and they see it’s costing them more money. I booked F to SYD for November this past March before they “devalued” further. Before the official March devaluation, I was holding onto 1m+ miles, now my miles balance is significantly down as I don’t plan on holding onto them any longer since they’re nearing Sky Peso valuations. The AAdvantage program is no longer rewarding and they’ve slashed the EXP benefits for next year. #GreatestFlyersFlyOtherAirlines

  15. this makes no sense from a FFP standpoint… if you’re gonna treat unpublished, AAnytime Space as premium … then these ridiculous prices (if someone used miles for it) should earn the same privileges as cash fares. AA cant have it both ways. either value your flyers & respect the FFP program. or if you’re gonna have retarded dynamic pricing even for mileage tix, they should get ALL the bennies of any given, equivalent cash fare class.

    even tho AA is pissing off tons of its loyal customers lately, I hope no one is stupid enough to burn 200k or 300k or 400k miles on shitty AA products. dont pay these unfair & unpublished highway robbery AAnytime prices that are still treated as ‘awards’ when they couldnt be further away from the truth. AA has forgotten what rewarding your frequent flyers means. if you expect any customer to pay full price (acc to your own mile valuations) then treat that ticket stock like a goddamn cash fare, fully mileage earning, full elite bennies and everything that comes with these days. or what’s left of the old AAdvantage shell of a program anyways.

  16. Can’t find saver awards EVER from my location (and nearby airports) to places I want to go despite exhaustive and continual searches. Really glad I quit trying to earn miles on AA and dumped my AA credit cards. It felt like for the past 4 years that everytime I got ready to use my miles, the award price would jump up to where I couldn’t. Now being able to redeem my miles for a flight on AA is just not going to ever happen. Am trading my loyalty to Delta (better international service), JetBlue and SunCountry. AA certainly doesn’t deserve it!

  17. HA! Learned a neat trick to share with you folks. If you want AA to start showing saver award availability, then complain on Lucky’s blog. Was searching yesterday and found nothing. Now there are tons-just not for the dates/schedules I am looking for. Have noticed this happening several times in the past year, not just with Lucky but also with View from the Wing. But I have also noticed that the saver awards go away within a day or two of the complaints. Just goes to show that AA DOES read your blog, but also shows that they really don’t do anything about it!

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