I'm worried about an American AAdvantage devaluation: Here's what I'm doing about it
Back in June, TPG's Zach Griff spoke to American Airlines' loyalty chief, Rick Elieson, about the fate of AAdvantage award charts. And although at the time, Elieson said American loyalists shouldn't be afraid of an upcoming devaluation, it's clear that American Airlines AAdvantage awards are moving further toward dynamic pricing.
Elieson told Griff, "if fares continue to be lower than historical norms, then so will awards."
But, ever since that interview, I've been nervous about what will happen to the value of American Airlines miles. And my fears are personal. Despite redeeming almost two million AAdvantage miles since 2016, my husband and I are still sitting on over two million American AAdvantage miles.
Today I'll discuss why I'm worried about a potential devaluation and what we're doing to hedge against this potential threat.
Why I'm worried
AAdvantage initially moved toward dynamic pricing when it rolled out Web Special awards in 2018.
Web Special awards cost less than the standard award chart option but don't allow changes. In particular, when there's MileSAAver award space, you may see Web Special awards that cost less than the award chart for MileSAAver. And if there's only AAnytime space, you may be able to book a Web Special for more than a MileSAAver award but less than an AAnytime award.
AAdvantage currently uses award charts for MileSAAver and AAnytime awards.
But, if AAdvantage removes its award charts, as United and Delta have done, we could see award rates skyrocket past the current AAnytime rates during peak travel times. And if we see award rates become more closely tied to cash fares, it may become increasingly challenging to get outsized value from your miles.
AAdvantage will continue to provide "goalposts and some expectations" regarding award pricing, according to Griff's interview with Elieson.
However, Griff notes that "Elieson compared the next iteration of AA's award charts to a real estate website that shows you how many people have bought a property in a given area and for what price range, as well as a ticker for how many people are looking at a specific property right now."
Depending on how AAdvantage implements upcoming changes, there could be room for savvy travelers to find good deals. But, especially if AAdvantage's calendar search tool isn't improved, I expect the changes will result in AAdvantage loyalists getting less value from their miles on the whole.
What really concerns me is the potential that AAdvantage may devalue -- or even remove -- its partner award charts (either for all partners or its joint venture partners). After all, frequent TPG readers know that my favorite AAdvantage sweet spot is to fly Qatar Qsuites from the U.S. to South Africa for 75,000 miles and $16. Plus, there are several other products operated by partner airlines that I'm hoping to redeem American Airlines miles to fly at more or less current rates.
Since we have over two million AAdvantage miles and we'll both hold at least Platinum Pro elite status through Jan. 31, 2023, my husband and I are tied to the AAdvantage program for the short to medium term. I'm hopeful that when AAdvantage changes (or removes) its award charts, the change is only for American-operated awards. Even so, I'm guarding against devaluation now in case American significantly devalues partner awards too.
Related: Maximizing redemptions with American Airlines AAdvantage
What I'm booking now
In a recent article about how TPG staffers would spend one million American Airlines AAdvantage miles, I mentioned how my husband and I had just over one million American Airlines miles tied to outstanding awards. In particular, we've used American Airlines miles to book upcoming various domestic awards as well as:
- 313,000 miles plus $133.82: Round-trip business class for two from the U.S. to India on American's new route from Seattle to Bangalore.
- 150,000 miles plus $119.10: One-way business class for two from Johannesburg to the U.S. via Doha in Qatar Qsuites.
- 144,000 miles plus $22.40: One-way Flagship First for two from Los Angeles to London via Miami.
- 144,000 miles plus $11.20: One-way Flagship First for two from New York to London via Los Angeles.
- 140,000 miles plus $96.35: Round-trip business class for one from the U.S. to Male, Maldives, via Doha in Qatar Qsuites.
- 40,000 miles plus $103.15: Round-trip economy class for one from the U.S. to Buenos Aires, Argentina.
But, we looked at our accounts and found we still had a lot of American Airlines miles unassigned. So, similar to how I booked a lot of IHG Rewards award stays earlier this year to guard against a potential devaluation, my initial instinct was to book as many American Airlines awards as possible.
We did book several more awards within the last few days.
For example, we booked Japan Airlines business class from Hanada to Dallas for 60,000 miles plus $55.05 each. And we booked a trip from Europe to Kathmandu and then back to the U.S. in Qatar Airlines business class for 112,500 miles plus $112.15 each. We also booked Cathay Pacific business class from San Francisco to Bali via Hong Kong for 70,000 miles plus $33.30 each. Finally, we booked some new domestic awards since I expect American Airlines-operated awards are the most at risk of devaluation.
Unlike hotels where availability often isn't an issue, it takes a lot of time and effort to find availability and dates that work for each flight award you want to book. We can continue to rebook awards and cash fares to destinations that still aren't accepting vaccinated tourists without a quarantine, but our calendar for the next year is filling up.
Although we've snagged some awards and set up ExpertFlyer alerts (ExpertFlyer is owned by TPG's parent company, Red Ventures) for some other awards we'd like to book, we still have a significant chunk of American Airlines miles in our accounts that we haven't yet redeemed.
Related: How to redeem miles with the American Airlines AAdvantage program
Bottom line
Whether this month or next year, devaluations are coming to travel loyalty programs. In fact, they've already started.
Points and miles are a bad long-term investment, as they almost always lose value over time as high-value redemptions are removed or devalued. In turn, Elieson's comments to Griff, along with the reality that airlines often play "follow the leader" makes me think that an American Airlines AAdvantage devaluation is coming sooner rather than later.
While my hunch could be wrong, if you have American Airlines miles, it's worth looking through your upcoming travel plans to see if you should book any new American Airlines awards. If you've had your eye on a specific AAdvantage sweet spot, now is a great time to search for availability and book if you find something that works for you.
After all, if you later decide not to travel, you can cancel your award, redeposit your miles and get the taxes and fees refunded to your credit card without any fees. You're effectively trading the time it takes to find availability and book for the opportunity to lock in a high-value redemption that may not stick around forever.
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| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
| 2X | Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Intro offer
Annual Fee
Recommended Credit
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
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- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
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Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.
Rewards Rate
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
| 2X | Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Intro Offer
You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
$325Recommended Credit
Credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.Excellent to Good
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.