American has come out with its award chart changes. These have been much anticipated, because we really haven’t seen changes to the saver award chart in a big way since the introduction of one-way awards in 2009.

While United and Delta were busy raising award pricing, American was focused on integration of two airlines. In some sense we had a couple of years where American AAdvantage was just more generous than their competitors. Now they’re making changes that narrow that gap.

• Overall changes are what we’d expect — increases where American was underpriced, especially business class to Asia and the South Pacific and also international first class awards.

• Still the changes are less bad than many paying attention to the industry might have expected.

• And there are a few givebacks along the way.

Nonetheless I consider American miles to be worth less when these changes go into effect March 22. How much less depends on your tendency to book international first class (as I do), where the biggest increases in award prices are.

Four Months Notice of Award Chart Changes

Last year American eliminated distance-based awards and their limited free stopover benefit. They did it without notice. And since then they’ve made a point to give better notice of changes.

This time we get four months’ notice of award chart changes. And they’re really not as bad as feared. I went on the record a year and a half ago with my predictions for the AAdvantage award chart. Some folks thought I was being pollyanna-ish. But my predictions were pretty close. First class awards to Asia and to the Middle East increased a little more than I expected then (though less than I’ve feared recently).

Award Charts are Only Part of What Matters

Award charts are only part of the equation. The value of a redemption program is a function of:

• Award pricing
  
• Award availability
  
• Award routing rules

American’s award pricing is what’s changing effective March 22. There are tweaks to economy and business class award prices, and fairly large increases in first class awards.

What isn’t changing is availability. American, and the oneworld alliance generally, isn’t as good here as Star Alliance with fewer airlines and fewer routes. Availability to Europe and Asia can be a challenge in comparison.

What also isn’t changing right now is routing rules or what flights can be combined together to build an award. No program that I can think of has the complicated rules that American AAdvantage does. In fact, recent modest tweaks makes them even worse. That’s why you need to bookmark my Ultimate Guide to Booking Award Tickets Using American Miles.

I asked American about this and was told that it’s one of the things they’re specifically looking at as a potential future change. That would be super positive if it came to pass.

Nonetheless I find that I wind up booking most of my awards with American miles, because I have a preference for first class. And they have more airlines with first class products that I want to fly and that ultimately have availability. Historically that’s meant Cathay Pacific. Recently that’s meant Etihad. Although I’ve also had good luck with what some would otherwise consider a unicorn, Qantas first class.

Qantas First Class Predeparture Champagne

Changes to AAdvantage Economy Awards – Minor Tweaks Both Up and Down

There’s no change to the basic 25,000 mile roundtrip domestic award pricing. But there’s a new lower-priced award for short flights, and modest tweaks to the rest of the chart for coach redemptions.

Here’s the new economy award chart for travel to or from the US Continental 48 States that goes into effect March 22:

They’re introducing a new 7500 mile each way award level for flights under 500 miles. US Airways had a huge short haul network, and better than 40% of the combined airline’s flights are under 500 miles. It was hard to justify spending 25,000 miles roundtrip for these flights, but it will be easier to spend 15,000 (of course you can spend 15,000 British Airways Avios roundtrip for American flights up to 1150 miles).

They’re also eliminating reduced off-peak awards when traveling on partners to Hawaii, South American 1, and Asia 1. That means the only partner off peak award prices are to Europe.

Other saver awards in most cases go up (or down) by 2500 miles each way. There’s only two cases where AAnytime awards — spending extra miles for last seat availability on the aircraft (on American flights only) — change.

I put the saver awards under the old chart and new chart next to each other. And for off-peak travel other than to Europe, the prices apply to American Airlines travel only.

These are the changes:

• Canada/Alaska awards go up 2500 miles each way (so 30,000 roundtrip instead of 25,000)
  
• Hawaii off-peak awards go up 2500 miles each way
  
• Caribbean/Mexico drop 2500 miles each way
  
• Central America drops 2500 miles each way for both off-peak and regular saver awards
  
• South American 1 goes up 2500 miles each way for both off-peak and regular saver awards
  
• Europe goes up 2500 miles each way for off-peak and the lower tier of AAnytime award
  
• Asia 1 goes up 7500 miles each way for off-peak and 2500 miles for saver and the lower tier of AAnytime award.
  
• American introduces a 32,500 mile each way (2500 mile discount) off peak award for Asia 2.
  
• South Pacific awards go up 2500 miles each way at the saver level.

All in all, changes to economy awards — as we’ve seen with other airlines — have been relatively minor.

Business Class Gets More Expensive – Especially Asia and South Pacific

Here’s the variance between the current and March 22 one-way business class saver award chart:

One change not noted here is that international business class awards which include business class on a 3-cabin flight within North America will cost an additional 7500 miles. So if you’re flying American’s premium transcon service between New York and Los Angeles or San Francisco, if you’re flying 3-cabin equipment Miami – Los Angeles, or you’re flying Cathay Pacific between Vancouver and New York JFK you’re going to pay 7500 miles more one way.

American Airlines Airbus A321T Business Class

Comparing the regions, we see modest changes to North America and Northern South America.

American isn’t increasing business class pricing to the Middle East and Indian Subcontinent by very much. They were already somewhat expensive here, on a go-forward basis I consider this to be a really good value especially with partners like Etihad and Qatar (not to mention Royal Jordanian and Gulf Air).

AAdvantage premium cabin awards between the US and Asia were massively underpriced compared to competitors. Now they’re still a very good deal, just less good of a deal than before.

The piece I find most interesting is that Europe awards go from 100,000 miles roundtrip to 115,000 miles roundtrip. That’s much cheaper than Delta. United charges 115,000 miles for flights on their own metal. Realistically, though, availability is usually on partners at 140,000 miles roundtrip.

I surmise that they recognize that many AAdvantage Europe awards are already very expensive since their primary transatlantic partner is British Airways, and BA awards incur fuel surcharges. So there’s a cash co-pay to many of their Europe awards on top of the 115,000 miles. That’s why we don’t see a bigger increase there.

The Biggest Increases are in International First Class Awards

This is where the big changes are. I’ve built a chart comparing current prices (starting or ending travel in the mainland US) with prices going into effect March 22.

Since we’re seeing big changes here, I added a column not just showing the increase amount for one-way awards, but also the percentage change. And I’ve highlighted the pieces that ‘matter’. Three-cabin first class isn’t super-relevant on a Hawaii award (unless you fly three-cabin first class on the domestic portion and two-cabin overwater). It’s similarly not relevant for South America or Central America.

American’s 3-cabin premium first class on their Airbus A321T aircraft that flies between New York JFK and Los Angeles/San Francisco goes up substantially. So does flying Cathay Pacific first class New York – Vancouver.

American Premium Transcon A321T First Class

Still, Asia 1 and Europe first class awards are reasonable though more expensive. It’s Africa, Middle East and Indian Subcontinent, and Asia 2 as well as South Pacific that gets super expensive (more than 200,000 miles roundtrip) in the new award chart. The biggest increases are where American was the most underpriced which isn’t surprising at all. I’ve been saying for quite some time that 135,000 mile Cathay Pacific first class roundtrips just aren’t going to last. And they aren’t.

Cathay Pacific First Class

I asked AAdvantage President Suzanne Rubin why international first class awards increase so much more than other awards. She described a “combination of factors” that they “studied closely the competitive pricing, demand and also product investment and enhancements that have been made.”

I take this to mean, first class is very good and people will pay more for it — and look, our pricing isn’t quite as bad as United’s and look at what British Airways did to first class awards..!

We Get to Keep Award Charts and We Have Enough Notice of Changes to Do Something About It

We get advance notice of changes, and we get a published reference point for what our miles should be worth. We can know what our mileage goals need to be. That’s super important making an intertemporal ‘deal’ with a loyalty program — you earn miles now to redeem in the future — and it’s something that Delta no longer provides (they also refuse to give advance notice of changes, implementing new award pricing either prior to or concomitant with making an announcement).

On the whole, an AAdvantage mile will be worth less March 22 than it is worth today. Pricing is still in line with or somewhat better than competitors, which it needs to be since AAdvantage doesn’t offer the best availability or most flexible routing rules for many destinations.

For me these changes will be yuge — my Southeast Asia awards will cost me 85,000 miles more per person roundtrip. The Qantas first class awards I booked a few weeks ago to visit my family in Sydney would be 75,000 miles more per person roundtrip. There’s no question business class starts to look relatively more attractive than first class under this new chart.

If you’ve got awards to book through the beginning of February 2017, and they’re awards that will get more expensive under the new chart, you’re going to want to do it before March 22 to lock in current pricing.