American Airlines ended the era of airline loyalty programs on Wednesday. It became the final major US carrier as it move towards dynamic pricing for mileage redemptions.
Beginning late on Wednesday, the airline will reveal the minimum amount of frequent flyer miles that are anticipated to be necessary to buy a plane ticket in a specific area; for instance, 7,500 miles for a one-way ticket inside the contiguous 48 U.S. states as well as Canada. The graph earlier displayed redemption rates that were constant.
In December, American stated that it was going to eliminate two redemption classes with minimum rates: MileSAAver and AAnytime awards. The graph will act as a reference and the newest redemption category will be known as “Flight Awards”.
“Just like cash tickets, these are going to float based on demand,” Chris Isaac, America’s director of loyalty, said in an interview.
The amount of miles needed to qualify for an award ticket now varies based on demand and supply because of an innovative feature America implemented in 2019.
“This product has become the product that our members have gravitated to,” Isaac said. That category required the same number or fewer miles than the awards that were set in the chart “up to 85% of the time over the last few years,” American said.
The period of the year also can impact the price of award tickets on American as well as other airlines.
For instance, a roundtrip ticket in basic economy on American from New York to Rome cost 126,000 miles for frequent travellers between June 1 and June 8 during the peak travel period, but just 89,500 miles between October 1 and October 8 during the less busy period.
“What I think is good about this, it aligns the award chart where American is today. To tell [travelers] that an award ticket is going to cost them a certain number of miles is no longer accurate,” said Henry Harteveldt, founder of Atmosphere Research Group, a travel industry consulting firm.
Although it might amaze you, the majority of your fellow travellers are unlikely to notice much of a difference from these AAdvantage modifications.
The issue with this is that Online Specials are now so popular, and America isn’t announcing saver award accessibility like it used to.
Isaac said that American will keep releasing tickets into the price buckets that were previously allocated for MileSAAver and partner-issued rewards, and he even speculates that the flight may provide partners more seats than it did in the past.
“It gives our revenue management team more flexibility because now those inventories are not multipurpose,” he said, but it’s unclear — and unlikely — that this scenario would ever come to fruition.
Obviously, it will be fascinating to see how, or even if, American’s reward pricing algorithms change over time, but for the time being, you may not be as impacted by this adjustment as one might expect.