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This Week, American Devalues AAdvantage

SmarterTravel

This week, on March 22, American’s new AAdvantage award chart takes effect, the first in a two-step devaluation of the oldest and largest airline loyalty program.

When American announced the changes, in November of last year, it described them as follows: “Award redemption rates will be adjusted with some award levels increasing, while others will be decreasing.” That’s true, as far as it goes. But the larger truth is that the award-price increases far exceed the decreases, in both number and degree, resulting in a net devaluation of AAdvantage miles.

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That’s clear from a summary of the major positive and negative price changes:

Less Expensive Awards (Each Way)

  • Domestic coach (<500 miles) decreases from 12,500 to 7,500
  • Domestic business-class (<500 miles) decreases from 25,000 to 15,000
  • Caribbean business-class decreases from 30,000 to 25,000
  • Mexico business-class decreases from 30,000 to 25,000
  • Central America business-class decreases from 30,000 to 25,000

More Expensive Awards (Each Way)

  • Alaska/Canada business-class increases from 25,000 to 30,000
  • Hawaii business-class increases from 37,500 to 40,000
  • Europe business-class increases from 50,000 to 57,500
  • South America Region 2 business-class increases from 50,000 to 57,500
  • Asia Region 1 business-class increases from 50,000 to 60,000
  • Asia Region 2 business-class increases from 55,000 to 70,000
  • South Pacific business-class increases from 62,500 to 80,000
  • Domestic first-class increases from 32,500 to 50,000
  • Alaska/Canada first-class increases from 32,500 to 55,000
  • Hawaii first-class increases from 47,500 to 65,000
  • Europe first-class increases from 62,500 to 85,000
  • Central America first-class increases from 40,000 to 50,000
  • Mexico first-class increases from 40,000 to 50,000
  • South America Region 1 first-class increases from 40,000 to 55,000
  • South America Region 2 first-class increases from 62,500 to 85,000
  • Asia Region 1 first-class increases from 62,500 to 80,000
  • Asia Region 2 first-class increases from 67,500 to 110,000
  • South Pacific first-class increases from 72,500 to 110,000

So, for the great majority of award prices that will change, the change will be a price increase, in some cases a substantial one.

Pay-to-Play Earning

If higher award prices were the only looming downgrade to AAdvantage, they might be dismissed as an unfortunate inevitability. It’s the next step, however, that will strip the program of its relevance for many travelers.

Following in the footsteps of Delta and United, sometime in the second half of 2016, American will pin earning rates on American flights to the price paid for tickets, as follows:

  • Non-elites will earn 5 miles per $1 spent
  • Gold elites will earn 7 miles per $1 spent
  • Platinum elites will earn 8 miles per $1 spent
  • Executive Platinum elites will earn 11 miles per $1 spent

As it was with Delta and United’s conversions to spend-based earning, the effect of American’s change will be to drastically reduce the mileage-earning potential for average travelers, who fly infrequently, on discounted advance-purchase fares. Frequent business travelers, on the other hand, will find themselves more richly rewarded.

There will be winners and losers, but far more of the latter than the former.

Reader Reality Check

Will you be a winner or a loser under the new AAdvantage scheme?

More from SmarterTravel:

After 20 years working in the travel industry, and 15 years writing about it, Tim Winship knows a thing or two about travel. Follow him on Twitter @twinship.

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