Hidden Trick To Unlocking Value From American Airlines Credits—Why You Should Book Direct And Cancel Last Minute

With Vasu Raja’s departure, American Airlines is again courting managed business travel and travel agencies.

They had fired sales and support staff, cut of many corporate contracts, and threatened agencies that tickets they issued wouldn’t earn miles unless they went along with not-quite-ready technology that let them sell American Airlines ancillaries.

Now they’ve decided they want this revenue and they’re making apologies. Except they are still at war with travel agencies! At least part of the company hasn’t gotten the word that they aren’t supposed to be any longer.

American issues two kinds of credits for cancelled flights – trip credits and flight credits. Trip credits are much more flexible. They can even be used for other passengers, not just the person who made the original booking.

But if you have an agency booking? You’re only going to get a flight credit. They were supposedly moving away from flight credits but they still have a use – punishing travelers for booking through travel agencies!

Basic economy customers have the option of cancelling their trip for a credit worth $99 less than they paid – if the customer is an AAdvantage member (otherwise they get nothing). Reservations can now enroll members in AAdvantage, saving them from this fate that American’s rules put them in in the first place.

But if you buy your basic economy ticket through a travel agent? Agency tickets get flight credits, not trip credits, so they aren’t eligible for a trip credit for the basic economy fare minus $99.

They keep investing in trip credits and making those better. One recent change is that you can give someone a trip credit to use for their own travel. You’ve cancelled your ticket, and the credit can be used by someone else. But if they buy a ticket worth less than the full value of the trip credit, the residual value now goes back to you.

Another way of looking at this of course is that they’re making booking direct better.

If you are going to cancel an American Airlines ticket, though, don’t forget that you should always do so at the last minute because trip credits are valid for one year from when they are issued – meaning the later you cancel, the later they’re issued, the further into the future they’ll be valid.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. I don’t understand the arbitrage here? What is the benefit of booking last minute (at a higher price) and giving it to someone else, since the overall value remains the same?

  2. It’s ambiguous wording on Gary’s part. Parse it: ‘direct-book and last-minute-cancel’ instead of ‘book-and-cancel at the last minute’.

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