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Make AA a Citi ThankYou Transfer Partner: The Weekly Wish

by on August 7, 2014 · 9 comments

in Aadvantage, Citi, Credit Cards, ThankYou Points, TPG Contributors

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Today TPG Contributor Nick Ewen continues his series The Weekly Wish, looking at flaws, shortcomings, and room for improvement in the world of travel and loyalty programs. Today’s wish: add American Airlines to the list of Citi ThankYou Rewards transfer partners.

Last month Citibank announced a significant enhancement to their ThankYou Rewards program: the addition of eight airline transfer partners. Cardholders of the Citi Premier or Citi Prestige can now transfer ThankYou points to these airlines (along with their long-standing hotel transfer partner Hilton HHonors,). This adds incentive for cardholders of the Citi ThankYou Preferred and other ThankYou Rewards earning cards to consider upgrading, as points earned with this fee-free card become transferable when you also have the Premier, Prestige, or (now discontinued) Chairman card. However, as excited as I am about the new transfer possibilities, there remains a gaping hole in the program that brings us to today’s Weekly Wish: making Citi ThankYou points transferable to American Airlines.

Let me begin with a disclaimer. Given the rash of devaluations we’ve seen in the points & miles world over the last year or two (like Delta, United, Hyatt, etc.), it’s hard to look at a true enhancement and take issue with it. While this announcement from Citi was a big step in the right direction, this Weekly Wish series was designed to look at all sides of the travel industry, including how the bad can become good and the good can become better. Today’s post clearly fits into the latter category.

Citi currently issues all American Airlines co-branded credit cards, including the AAdvantage Executive World MasterCard.

Citi currently issues all American Airlines co-branded credit cards.

Why would I specifically wish for this change with American? Right off the bat, this seems like an obvious marriage. Citibank is the current issuer of all American Airlines co-branded credit cards, including the Executive AAdvantage card and the Platinum Select World MasterCard or Visa Signature. This isn’t going to change as the merger with US Airways is finalized; back in June of last year, AMR (the parent company of American Airlines) announced that they would be sticking with Citi as their preferred credit card issuer. Both AMR and Citi have vested interests in mutual success; Citi purchased $1 billion in miles back in 2009, and American undoubtedly would like Citi to continue to entice frequent and semi-frequent travelers to open and use co-branded credit cards.

In many ways, I see similarities between AA/Citi and Delta/American Express. Amex currently offers several cards co-branded with Delta (like the Gold, Platinum, and Reserve cards), and of course American Express has other credit cards that offer Membership Rewards points, like the Premier Rewards Gold and Amex Platinum. Given this symbiotic relationship (though I’m sure some would categorize it as “parasitic”), can you imagine Membership Rewards NOT including Delta as a partner? They even used to run frequent and VERY lucrative transfer bonuses to entice Delta travelers to transfer Membership Rewards points to their SkyMiles accounts! It sure seems like Citi and American Airlines could follow a similar game plan.

Eight ThankYou Rewards transfer partners, and none in North America!

In addition, should this wish be granted, it would fill a significant hole in the current list of transfer partners: adding a North American-based carrier. To recap, here are the current transfer partners:

  • Cathay Pacific (oneworld)
  • EVA Air
  • Etihad
  • Garuda Indonesia (SkyTeam)
  • Malaysia Airlines (oneworld)
  • Qatar Airways (oneworld)
  • Singapore Airlines (Star Alliance)
  • Thai Airways (Star Alliance)
  • Hilton HHonors

While this does cover all three major alliances, it doesn’t provide an obvious option for TPG readers based in the US or Canada. Compare that to the options provided by Membership Rewards, Ultimate Rewards, and Starwood Preferred Guest and you’ll see how far ThankYou Rewards still has to go.

For those of you keeping score at home, here’s how those programs break down percentage-wise in terms of North American coverage:

  • Membership Rewards: 7 of 17 transfer partners are North American (41%)
  • Chase Sapphire Preferred: 2 of 6 transfer partners are North American (33%)
  • Starwood Preferred Guest: 8 of 32 transfer partners are North American (25%)

If Citi were to add American as a ninth transfer partner, it would bring their percentage from 0% to 11% (1 of 9) – still nowhere near the levels of the other transferable points programs, but an obvious improvement.

Adding American to go from 8 to 9 transfer partners would make Citi ThankYou points a MUCH more valuable currency!

Adding American as the ninth transfer partner would make Citi ThankYou points MUCH more valuable!

In addition, adding (soon-to-be) the world’s largest airline to their list of transfer partners would send a significant message to both American Express and Chase (since SPG is a hotel loyalty program that also happens to offer significant value in point transfers, I’m removing them from the discussion here to make this an apples to apples comparison). Neither Amex nor Chase currently has American as a transfer partner, and if Citi were to ink a partnership along these lines, it would signal the ThankYou program’s intentions to give Membership Rewards and Ultimate Rewards a run for their money. Just this week, Citi announced some additional positive changes to the Citi Prestige card, and fulfilling this Weekly Wish would be yet another step toward making ThankYou points a true competitor in the transferable points world.

20,000 each way for off-season flights from Miami to Buenos Aires. Not a bad deal!

20,000 each way for off-season flights from Miami to Buenos Aires. Not a bad deal!

Finally, adding American would enable cardholders to take advantage of some redemption offers that are specific to the AAdvantage program. Sure, there are three other carriers from the Oneworld alliance among the current eight airline transfer partners, but that doesn’t mean that they have access to the same inventory (or redemption rates) offered by American. For example, AAdvantage offers “MileSAAver” off-peak awards for economy trips during off-peak travel times. Round-trip flights to Hawaii are just 35,000 miles (a 10,000-mile discount), while flights to Europe and southern South America price out at just 40,000 miles.

In addition, those who have an AAdvantage co-branded credit card enjoy a 10% mileage refund on award tickets (up to 10,000 miles every calendar year), and access to reduced mileage awards to select destinations (see this link for a current list). None of these options would be available if you transferred your ThankYou points to Cathay Pacific, Malaysia, or Qatar.

Loyalty Program Merger Updates: 2015 It Is!

Loyalty Program Merger Updates: 2015 It Is!

Personally, I don’t see this happening until the merger is finalized. We’ve already seen that the US Airways MasterCard (issued by Barclays) will be sticking around for a while longer (though some benefits are changing in 2015), and it will likely be well into next year (if not 2016) before US Airways and American are fully integrated into a single airline. The American Airlines management clearly has their hands full with these details, so I’d be willing to bet that adding this option is FAR down their to-do list.

That said, while researching the new benefits for the Citi Prestige card, TPG asked one of his Citi contacts whether more transfer partners were coming, and received the cryptic response “stay tuned.” To me that implies more partners are coming, but who and when is anyone’s guess.

What do you think? Would adding American Airlines as a ninth transfer partner push you towards opening a card in the Citi ThankYou program? Please comment below with your thoughts and/or questions!

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • Diamond Vargas

    Add AA, Avianca, and a usable SkyTeam partner (Alitalia? AeroMexico? Semi-usable would be a start…) and Citi would have a stronger program than Chase or Amex.

  • Andrew

    If they added AA do you think they would scale back the 3x points on dinning and entertainment on the Premier? Would make it very valuable

  • Cory Davis

    I’ll be picking up the Prestige if this ever comes to fruition.

  • Nick Ewen

    Good call. I think we will see more partners added going forwards. Like you said, the existing ones aren’t exactly the most useable mileage currencies.

  • Nick Ewen

    The 3x points on the Premier is only on airlines, hotels, and travel agencies. Entertainment is being added as another 2x category to go along with dining. Either way, I doubt they would drop this, especially since they just announced many of these changes.

  • Nick Ewen

    Agreed. It certainly becomes a much more intriguing value proposition. Even if it’s not AA, other more readily useable currencies (as Diamond mentions above) would be a significant improvement as well.

  • Brian C. Lee

    Wrong. The Premier gets 3X on dining and entertainment. See here: https://www.citi.com/credit-cards/credit-card-details/detail.do?ID=citi-thankyou-premier-credit-card&category=reward-credit-cards

    You must be thinking of the Prestige.

  • Nick Ewen

    You’re absolutely right. The Prestige has been on my mind because of the recent changes. My mistake.

    I still don’t think that they would change that earning structure. With a $125 annual fee, dropping those bonus categories would be really hard to justify.

  • Andrew G

    Yes, definitely. I’m just starting out in the rewards game, but Southern South America is the area of the world I have the most interest in. 40,000 points from North American to Buenos Aires, or 40,000 from SFO to Salvador, Bahia, an absolute steal of a deal.

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