American’s New Award Pricing Can Make One Ways More Expensive Than Roundtrips

In 2009 American AAdvantage became the first U.S. frequent flyer program to offer one way awards at half the cost of roundtrip. That was great because it meant you could book a one way trip on American, and find saver award availability on another airline like United (which quickly followed suit).

When American introduced one way awards they promised “no changes to AAnytime or MileSAAver mileage requirements – just more options, value and greater flexibility.” Of course all bets were off this spring when Delta started charging more than half the cost of a roundtrip to book one way awards.

And since United and American copy Delta for all the wrong things it should be no surprise that JT Genter is reporting that American is now pricing some awards cheaper when you book a roundtrip than if you book the same itinerary as two one ways.

Already we’ve seen that:

  • American has introduced revenue-based redemptions in parallel with their award charts. Saver award prices and published charts still exist, but new award amounts can be lower than the saver chart, or if there’s no saver inventory then lower than the applicable five levels of anytime awards.

  • They’ve also made saver award availability revenue-based through married segments.

Now it appears that the revenue-based “economy saver awards” that were introduced a year ago have taken another step in their evolution. JT points out that Los Angeles – Sydney and Los Angeles – Barcelona economy saver awards are pricing lower as round trips than two one ways and even that economy saver awards may only show up if searching round trip and not one way.

There don’t appear to be any changes to traditional saver or anytime awards at this time – only to revenue-based economy web specials.

Two One Ways = More Than a Roundtrip

A one way saver award in economy between the U.S. and Australia is 40,000 miles. When we hit low season in May we start to see ‘economy web specials’ offering seats for 33,000 miles one way.

As part of a round trip though some of those same one way journeys price at 27,500 miles one way.

Economy web special awards cannot be changed although awards can be cancelled and miles redeposited (for a waive unless waived based on elite status). And restrictions aren’t always well-disclosed so watch out for them.

However if you’re considering a web special award for travel on American, and you’re confident enough you won’t need to change plans that you decide to book one, be sure to search roundtrip travel if you plan to travel roundtrip – don’t just search one way in each direction out of habit anymore.


American Airlines Boeing 787-9

Roundtrip Requirements Make Perfect Sense for Revenue-Based Redemptions

With this change – reversing the benefit American trumpeted a decade ago that one way awards would never cost more than half a round trip – there was no press release.

Nonetheless it makes sense in the new world American AAdvantage has put itself in. Paid roundtrips are still sometimes less expensive than two one ways for international travel. It’s not surprising that awards would mirror this.

Take for instance that Los Angeles – Sydney route. Here’s a paid roundtrip in May:

Just booking the outbound as a one way trip is nearly as expensive as roundtrip.

Now add in a one way return you’re up to $1392 roundtrip or 60% more than just booking roundtrip. Naturally, now, American wants more miles as well.

Revenue-based redemptions are about delivering more award availability to avoid frustrating members, but where miles have a consistent and low average value. It’s no wonder that they converge around one cent per mile since that’s how much liability the airline books for future travel when miles are award for flying (the liability is recorded much lower for miles earned through credit cards).

Ultimately revenue-based redemptions put frequent flyer programs on a collision course with themselves because they solve the availability problem (too many miles chasing too few seats) by treating each mile as a small amount of cash to buy paid airline tickets.

That’s costly to the airline because they may be giving up revenue they’d earn selling tickets. But it’s bad for members because it also spells the end of the inspiring reasons that fuel collecting the currency in the first place.

At least so far American has retained formal award charts in parallel to these awards, even as those become a smaller portion of overall availability. That’s a leg up on both Delta and United.

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. “that American is now pricing some awards cheaper when you book a roundtrip than if you book the same itinerary as two one ways.”

    BACKWARDS FROM HEADLINE

  2. I’m being triggered by your discussion of economy flights to Australia. Just the mere thought of 14 plus hours in economy makes me long for a return to solitary confinement at the state hospital on Lamar.
    Gee, I’m even triggering myself with the mention of Lamar in Austin, because I recall an airliner dumping or leaking it’s toilet on my windshield as it approached Mueller. The airport, not the man.

    It’s been awhile, obviously. I think 40 years.

  3. Im triggered by the mention of Mueller, because I still remember the AA customer disservice jockey spotting me run to the gate 4 mins before flight time – and leaping out from behind the podium to shut the door so I couldn’t board.

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