American Airlines is expected to eliminate the “close in booking fee” on awards, the $75 per ticket charge for booking award travel within 21 days of departure (which is currently waived for AAdvantage elite frequent flyers using miles from their own account).
In earlier days of frequent flyer programs there was a narrative about ‘expediting’ an award ticket, getting it issued and mailed out right away for which there was an extra service charge. In more recent times it’s been simply a tax on frequent flyers and a way to discourage use of miles for close-in travel that’s generally more expensive (or more available as airlines determine which seats would go unsold and release more space).
Close American Airlines watcher JonNYC reports:
AA will be removing the close in booking fee.
— JonNYC (@xJonNYC) July 27, 2019
This is a fee that Delta and United have already eliminated, which is why it’s predictable that American would follow suit (although there’s a logical reason for all three to do so).
- Delta eliminated close-in booking fees but frequently charges more miles for close-in redemptions.
- United eliminated close-in booking fees for award travel November 15 onward. In other words, the travel date where United no longer binds itself to pricing based on an award chart the fee disappears as well.
Close-in booking fees are no longer necessary once a loyalty program moves to revenue-based redemptions. The fee kept members from redeeming for expensive last minute tickets at the saver level and displacing paid travel they might otherwise have booked. The fees limited how much value you would get for miles.
But we are seeing a trend towards average value rather than outsized value, and American’s redemption model now explicitly allows for displacing some low value paid travel.
American starts off with 6 award chart price levels and is moving to more dynamic award pricing. In that model there are less blunt ways to limit the value that anyone will get for their miles, and how much displacement of revenue travel the program is willing to accept.
One unintended consequence of eliminating close-in award booking fees is to further reduce the value fo AAdvantage Gold status, and indeed reduce the spread of benefits earned by Golds (who have these fees waived) and any AAdvantage member who picks up a co-brand credit card.
- The card gets earlier boarding and waived checked bag fees, just like Golds.
- Golds rarely see upgrades, and don’t fly enough for the modest mileage bonus on paid travel to be material.
- Golds get access to available Main Cabin Extra seats at check-in, but I find I have difficulty finding Main Cabin Extra aisle seats on the tickets I buy within a couple weeks of travel, especially as this management has reduced the number of such seats on many aircraft. Golds lost the discount they received purchasing these seats last September.
If general members no longer pay these fees, the difference between a general and Gold member shrinks. Nonetheless, for program members as a whole eliminating close-in booking fees will be a good thing though the underlying program changes that lead the fee to no longer make sense are a negative overall.