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With American Airlines’ recent switched to a revenue-based system for awarding redeemable miles, many travelers will be seeing lower rewards balances. However, as TPG Contributor JT Genter explains, using Citi ThankYou points to book certain flights could be a good option, as AA seems to be awarding miles for these bookings according to a different earning chart.
Missing the old mileage-based AAdvantage program? For better or worse, a version of it still exists for some “special” flights. In some situations, this means you’ll end up earning less miles than you might expect on an upcoming flight, but — if you use it right — you could earn many more miles than if you book with cash.
A report surfaced Monday from an American Airlines Executive Platinum member who flew this past weekend. The traveler had booked AA flights with Citi ThankYou points for airfare costing $214, so — under the new revenue system — the traveler expected to receive around 2,000 award miles (11x base fare). However, only 472 award miles posted for the round-trip. A fellow FlyerTalk user figured out that American Airlines used a “special” award chart for this Citi ThankYou point redemption.
Types of Bookings Affected
Most flights marketed by American Airlines follow the new revenue-based earning program. To calculate award mileage earnings under this system, you add the base fare and any mandatory carrier-imposed fees (i.e., fuel surcharges). This total is then multiplied by an earning rate depending on your elite status:
- 5 miles/US dollar — AAdvantage member
- 7 miles/US dollar — Gold
- 8 miles/US dollar — Platinum
- 11 miles/US dollar — Executive Platinum
However, there are some situations where the flight cost isn’t easy to determine. For example, say you book a flight and hotel package to Curacao through AA Vacations in order to get the lucrative 30,000-mile bonus available through the end of the month. There’s no clear indication at purchase of how much of the price you paid was for the flight. While you could look at the cost of a sample flight-only itinerary, there are some flight+hotel packages that are actually cheaper than just booking the flight.
American Airlines lists specific examples of these type of special fares:
- Bulk fares
- Cruise fares
- Consolidator fares
- Discounted or inclusive tour packages
- Vacation packages, including American Airlines Vacations® (AAV) packages
- Other tickets where the fare isn’t disclosed, excluding bookings made through priceline.com or hotwire.com where the carrier isn’t disclosed before buying
In these cases, American Airlines needs a way of determining the award mileage earnings using something other than cost. So, it has a modified mileage-based system.
Award Chart for Special Fares
If your flight falls under the Special Fares chart, you’ll earn between 50-150% of the flight miles as award miles, 100-300% of flight miles as Elite Qualifying Miles (EQMs) and — starting in 2017 — between 10-30% of flight miles as Elite Qualifying Dollars (EQDs). American Airlines elite members will earn another 40-120% bonus on top of the base award miles.
Take a New York (JFK) to Rome (FCO) AA Vacations business class flight+hotel booking. No matter how cheap or expensive the package is, you’ll earn award and elite miles based on the flight miles of 4,277 each way. Each traveler — regardless of elite status — will earn 17,108 EQMs. After the various bonuses are applied, award mileage earnings would be:
- AAdvantage member: 12,831 miles
- Gold: 16,253 miles
- Platinum: 17,963 miles
- Executive Platinum: 23,096 miles
In 2017, the Elite Qualifying Dollar (EQD) earnings would be 4,277 flight miles x 2 for round-trip x 30% = 2,566 EQDs. This is an excellent earning rate if you’re able to book this flight+hotel booking through AA Vacations for just $1,847 total!
Impact on ThankYou Point Redemptions
Since you redeem Citi ThankYou points at a set rate for airfare, it doesn’t seem that these redemptions should fall under the Special Fares chart. After all, you’re simply paying for the flight — not a vacation or cruise package — with ThankYou points instead of cash. This is why this week’s report is surprising. While there’s some speculation that the Special Fares chart might only apply to ThankYou point redemptions on certain routes, there are no data points yet of ThankYou point redemption flights posting under the new AA revenue-based system.
Assuming that the Special Fares chart applies to all ThankYou redemptions, let’s dig into what that means for your flights and when you should consider purchasing a cash fare instead of using ThankYou points.
Short but expensive flights
The report from this week reveals one of the poorer examples for using ThankYou points under this system. The traveler redeemed ThankYou points for airfare costing $214. Looking at a sample itinerary on this route, there are ~$42 in taxes. Under the revenue-based system, travelers earn between 860 (general members) and 1,892 (Executive Platinum members) award miles from this itinerary.
However, since this flight is just 234 flight miles each way, the mileage earnings for this flight under the Special Fares chart is just 234 (general members) to 515 (Executive Platinum members) — or about 1/4 of the award miles earned under the revenue-based system.
So, for short but expensive flights, you’ll earn many more award miles by using cash to purchase the flight rather than ThankYou points.
Long routes with high taxes
Upcoming flights from Chicago (ORD) to London (LHR) are running $837 round-trip. If all of this spending counted toward the revenue-based mileage system, travelers would earn 4,185 to 9,207 award miles depending on status. However, due to the UK’s high airport taxes, $212 of this price is taxes. This means a cash fare would only net travelers 3,125 to 6,875 miles. If the same flights are booked with ThankYou points, the earnings are better: 3,953 to 8,697 miles.
Make sure to factor in taxes when determining whether to use cash or ThankYou points. For long-haul flights to or through high-tax airports, it might be better to use ThankYou points.
Cheap long-haul economy flights
This is where the news gets good. For cheap long-haul flights, using ThankYou points will earn you more award miles than under the revenue system. Let’s take the above flights — ignoring that they’re from before August 1 — that my wife booked with ThankYou points. You have the choice to pay $688 or redeem 42,997 ThankYou points (assuming you have the Citi Prestige card).
Even before subtracting taxes, the revenue-based earnings would be just 3,440 to 7,568 award miles. However, under the Special Fares chart, travelers redeeming ThankYou points for this itinerary would earn 10,283 to 22,622 award miles — triple the revenue-based earnings.
Ever since August 1, travelers redeeming ThankYou points for American Airlines flights have reported earning miles based on the American Airlines Special Fares chart. While it’s unconfirmed that this chart will be used for all ThankYou point redemptions, make sure to figure out what the flight’s earnings would be under the Special Fares chart when debating whether or not to redeem Citi ThankYou points for a flight.
For cheap long-haul flights, it’s an especially good idea to redeem ThankYou points. For short but expensive flights, consider purchasing the fare with cash instead.
H/T: Rapid Travel Chai
Have you had a similar experience when redeeming Citi ThankYou points for an American flight?
Citi® / AAdvantage® Platinum Select® MasterCard®
|Intro APR||Regular APR||Annual Fee||Foreign Transaction Fee||Credit Rating|
|N/A||14.24% - 22.24%* (Variable)||$95, waived for first 12 months*||3.00%||Excellent/Good|