Two weeks ago American AAdvantage launched award ‘web specials’.

• These are discounts for all members on specific coach flights. What we saw were that short haul awards that would otherwise be 7500 miles cost 5000 miles instead, but awards cannot be changed (and it’s not worth paying a $150 redeposit fee to get 5000 miles back).

• The offering is separate from the discounted awards for co-brand credit card customers that American has offered for some time.

I was fairly uninterested when only six routes were available: Dallas to Wichita, Corpus Christi, Brownsville South Padre Island, McAllen; Phoenix – Long Beach; Charlotte – Orlando-Melbourne.

However American has loaded several routes into web specials. This includes longer haul travel, and even includes Hawaii, at a variety of discounted prices.

Austin		<->		Los Angeles
Portland		<->		Los Angeles
Honolulu		<->		Los Angeles
Honolulu		<->		Phoenix
Dallas Fort-Worth		<->		Ft. Lauderdale
Orlando		<->		Pittsburgh
Las Vegas		<->		Los Angeles
Dallas Fort-Worth		<->		New Orleans
Las Vegas		<->		Phoenix
Boston		<->		Greensboro
Orlando		<->		Baltimore

Travel is valid January 8 onward. And it can be confusing to book. If you start searching before January 8 you will default to looking for saver awards, and not for Economy Web Specials. As a result you won’t see awards at the lowest price available.

For instance here’s Austin – Los Angeles including early January. Since I started looking prior to January, when web specials weren’t an option, moving forward in the calendar didn’t show the web special pricing. Instead 12,500 miles is the lowest price.

However choose to show those Web Specials and Austin – Los Angeles becomes 5000 miles each way.

Notice something else? Availability for web specials appears to be much better than for saver awards.

The price of Austin – LAX actually varies. Some web special prices will be 5000 miles. Some others price at 6500 or 7500 miles. That’s still better than 12,500 miles of course. It seems to correspond to paid fares. When Austin – LAX is $99, 5000 mile awards are available. Higher paid fares seem to have higher award prices.

I asked American about different pricing levels for web fares and they confirmed,

The award level for the sale fares is based on a number of factors, such as demand for the flight, seasonality, whether MileSAAver or AAnytime is currently selling, etc.

They also agreed that availability is different for web specials than for saver awards. Saver awards book into T class, while “web special sale fares book into both T and Y.”

Historically coach to Hawaii has been 22,500 miles each way (20,000 on off season dates). For the Honolulu – Los Angeles and Phoenix routes that’s discounted as low as 12,500 miles but now has myriad rates: 13,500; 14,500; 15,000; 16,000; 17,000 to name a few.

First of all: lower award prices are better. Full stop.

I don’t anticipate getting outsized value from these awards. It appears they’re valuing miles based on fare at around two cents apiece. That’s more than those miles sit on American’s books for. And it’s more than many customers are getting for domestic travel, so that’s good.

What I worry about is:

• The continued move towards pricing awards based on fare, because while two cents a mile may be worthwhile to some customers the fundamental value of the frequent flyer program — what really drives consumer behavior — is the promise of getting really great deals, the idea that you can get travel you wouldn’t be able to afford on your own without the program.

  Every loyalty manager has to be careful that as they work to expand availability to meet program member demand they do not simultaneously eliminate the possibility of getting great value for miles. In other words, delivering average value more often isn’t a substitute for delivering occasional great value.

• Making awards non-changeable. As an Executive Platinum I can simply cancel and rebook at no fee. But for most members awards have long been more flexible than paid tickets because people redeeming their miles were treated as honored guests, and a reward isn’t meant to feel like a punishment. The purpose of actually rewarding customers shouldn’t be lost, even as change fees have gone up over time.

Will you take AAdvantage of American’s new discounted awards?