The Tell That American AAdvantage Will Devalue When It Eliminates Award Charts

Rick Elieson, who manages AAdvantage at American Airlines, told The Points Guy that the days of traditional award charts at his frequent flyer program are numbered.

He insists he has ‘no plans to devalue’ which means, of course, that he’s planning to devalue the program but not call it a devaluation. How do we know this?

First, because every program everywhere that has eliminated award charts has made their points less valuable, not more valuable. We even saw that during the pandemic where United, Delta, Southwest, and IHG Rewards devalued their points, increasing the cost of redemptions. When you no longer have a price list, you don’t even have to tell members when you’re systematically raising prices so you do it more often.

But second, the tell is in the very interview he gave where he said he wouldn’t be devaluing the program. He described using miles as a currency and said that award charts don’t support expanding options for members,

The current award charts list your mileage redemption options for flights only — there’s no mention of using your miles for other ancillary purchases like extra-legroom seats, upgrades, and more.

Now, this is literally false, the award charts do not “list your mileage redemption options for flights only” excluding options like upgrades. There is literally an upgrade award chart that the program publishes.

And it’s also beside the point because publishing a price list for flights does not prevent the airline from allowing miles to be used for things besides flights. American hasn’t gone as far as some other programs in offering non-flight redemptions, in the words of one former President of the program, because flights are what members want to redeem their miles for.

However AAdvantage has long had other redemption options. For instance they used to let you spend miles for magazine subscriptions. They eliminated that during the pandemic. There have been hotel and car redemptions, too.

The tell though is that Elieson is thinking about upgrades as an “ancillary purchase” – using miles as money for upgrades the same way you’d use miles to pay for checked bag fees or seat charges. In other words, he appears to be thinking about upgrades along the lines of Delta which eliminated fixed upgrade prices and instead introduced spending miles at a penny apiece to pay the difference in price between your coach ticket and a higher cabin.

Instead of, say, 25,000 and a $550 co-pay to upgrade a transatlantic flight, the difference in price might be $1500… or 150,000 miles.

That’s not a future for AAdvantage that I think any of us want to be a part of. However airline executives usually think that Delta managers are smarter than they are. And it’s difficult to buck the trend, the safe path is to do what everyone else does and both Delta and United have eliminated award charts.

American has been the financial laggard so it’s difficult for them to chart their own path. Besides legacy America West management at US Airways were prepared to eliminate award charts even before Delta did six years ago. They were distracted from doing so by the merger with American.

However the American AAdvantage program has generated more cobrand credit card charge volume than Delta’s program or United’s program for a reason. Eliminating award charts, diminishing trust in the AAdvantage program, puts that at risk. And investors in American’s AAdvantage-backed $10 billion in debt should be on notice.

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, 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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  1. Do you have any clue when this might happen, next month, three months, next year? I remember their last devaluation and I remember correctly they said this would never happen again.

  2. Spot on Gary! AA has had it so good with two credit card issuers. They have not paid the price for their absence of clear strategy (and ability to articulate same), the lack of a board with any level of industry experience (except for financial engineering — and the old guy from Hilton). I do believe that within the next several years the pigeons will be coming home to roost, particularly if the current management remains in place. For so much time in the industry, they do not perform like competent executive managers. In their view, their customers are not their passengers, yet they want to monetize AAdvantage as if they were. What dopes. This cannot last forever.

  3. Right up there with it’s only a cold sore and I’ll respect you in the morning.

  4. Rick Elieson, who manages AAdvantage at American Airlines, described using miles as a currency. Suppose Delta Airlines paid Rick 100 Million Delta SkyMiles valued at one cent each as a signup bonus. Would Rick Elieson accept the currency equivalent worth one million dollars, make the switch to Delta Airlines, screw up the Delta SkyMiles frequent flyer program and leave the American Airlines AAdvantage program intact?

  5. “And it’s difficult to buck the trend, the safe path is to do what everyone else does and both Delta and United have eliminated award charts.

    American has been the financial laggard so it’s difficult for them to chart their own path.”

    Isn’t the time to take a risk exactly when you are lagging? Try the onside kick, pull the goalie, pick Sarah Palin – AA needs a game changer. It may or may not work, but you gotta try. If your costs are higher, you route network worse, your operational performance behind, won’t copying the other just guarantee that you continue to lag?

  6. @ Gary — Unless AS or AA do something drastic to change our minds, we will be crediting all of our 2021 OW flights to AS. We generally don’t utilize complimentary elite upgrades, so there really isn’t much difference between LT Plat and EXP. I’d rather earn and burn under the AS system, and perhaps their Gold Guest Upgrades will again become useful.

    Even if AA destroys the value of its awards and AS continues with its traditional earn and burn model, I don’t think there will be a stampede from AA to AS. After all, the AS fleet and route network are pretty weak, so the vast majority of travelers will just continue with what they already know. I bet most East coast residents have never even flown Alaska. If I am correct, these things should allow Mileage Plan to continue as-is for another couple years. Time will tell.

  7. Gary – it is inevitable so live w it. All the bitching and whining in the world won’t change anything.

    Of course airlines and hotels will devalue their points. They have since the 80s. Now w all the sign on bonuses that you abd other blogs continue to shill that just leads to more devaluation. Too many points/miles in circulation so price goes up (like inflation)

    So you complain but what will you do? All programs are doing it. Accept the way it is, make the best of it and move along. Being upset or mad doesn’t hurt anyone but yourself.

  8. Why AA just survey its own customers and ask them what they want to use their miles for, how they would react to eliminating award charts, and so on?
    Instead of guessing, smart management would ask users first, then decide what to do with a 10 billion dollar golden egg. But seems AA managers are paid to fail. American should pay them in miles, sothey make them more valuable, not less. That would be thecorrect insentive…

  9. @AC wrote: “All the bitching and whining in the world won’t change anything.”
    You should stop whining about what Gary writes about. It is his blog. People like you are so annoying and arrogant telling Gary what to do. Stop reading his blog if you don’t like it, or skip articles like this.

  10. This should be illegal. They sell a ton of miles and have us build up our stacks and then as soon as travel comes back they do a bait and switch. Congress needs to get involved. WE as taxpayers loaned them money based on the AADVANTAGE program, and now it will be worthless.

  11. Any rational person would understand that these folks have little incentive to tell the truth. I wouldn’t believe one word coming from this guy’s mouth. It’s what they do, not what they say.

  12. @swag – “Isn’t the time to take a risk exactly when you are lagging?” if you’re an entrepreneur, sure, but most people aren’t – they don’t stick their necks out, they protect their jobs

  13. Spot on Gary. I have 6 flights booked on AA metal this summer and wouldn’t have chosen AA if I knew they were eliminating their AAward charts. I’ll be crediting these trips to my Mileage Plan account towards elite status on AS.

  14. As my mother taught me; “If you want to learn the truth about people, ignore what they say and watch what they do.”

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