Good news, bad news: American Airlines keeps expanding dynamic award pricing

Oct 21, 2019

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

With almost any frequent flyer program change, there are winners and losers. When U.S.-based airlines switched to revenue-based mileage earnings, high-spending business travelers began earning a lot more miles. Meanwhile, those of us that flew cheap economy mileage runs lost the ability to generate tons of miles from flying.

Similarly, airlines changing from static award chart pricing to dynamic award pricing, some travelers are winning and others are losing.

Later in October, we will reach the one year mark since American Airlines implemented “Economy Web Specials.” What was billed as a “discount program” has turned out to be AA’s way of implementing dynamic award pricing. While it started out as a limited program on just six routes, American Airlines has since expended the program across the U.S., to Europe, the Caribbean and most recently Australia.

Let’s look at why this program is both good news and bad news by taking a look at Economy Web Specials on routes to Australia.

When dynamic award pricing is a good thing

According to the American Airlines award chart, the cheapest economy awards between the U.S. and South Pacific region — which includes Australia — are 40,000 miles each way. Now, with Economy Web Specials implemented, awards have now dropped as low as 27,500 miles each way between New York City and Sydney (SYD):

Even nonstop awards — which AA typically prices at a premium — are now available as cheap as 27,500 miles each way between Los Angeles (LAX) and Sydney:

This means that — if you’re flexible on dates — you can fly to Australia for fewer AAdvantage miles than perhaps ever before. However, this implementation comes with a dark side.

When dynamic award pricing is bad news

As discussed above, American Airlines is using Economy Web Specials to implement dynamic award pricing while still (kinda) having an award chart.

For the past year, Economy Web Specials have focused mainly on domestic itineraries. On the positive side, we’ve seen awards as cheap as 5,000 miles each way. But, they can be much, much higher than that on other dates and routes.

When available, Economy Web Specials pricing will always be less than the MileSAAver or AAnytime award pricing available for that date. However, that doesn’t mean that it will be cheap.

For example, consider the following week in mid-December on the route between New York City and Sydney. While some dates cost “just” 75,500 miles each way, Economy Web Special pricing starts at a whopping 131,500 miles one-way on Dec. 18:

131,500 miles is an extraordinary amount to pay for a one-way economy flight. At current TPG valuations, that’s $1,841 worth of miles for flying just one direction. Even buying a one-way international cash ticket with a reasonable layover on the same date is cheaper than that:

For what it’s worth, that 131,500-mile Economy Web Special price is cheaper that the economy AAnytime award pricing of 150,000 miles each way:

If you think 150,000 miles seems extreme for an economy award, you’re right. It’s literally off the American Airlines award chart. The highest stated level (AAnytime Level 2) is 90,000 miles each way.

Technically, American Airlines has had off-the-chart AAnytime Level 4 award pricing for years, but it wasn’t expanded to U.S.-South Pacific business- and first-class awards until August 2016. At the time, AA confirmed economy awards would max out at 120,000 miles each way, but that’s clearly changed.

While a “special” price of 131,500 miles each way sounds awful, it actually gets worse. American Airlines is pricing awards between Atlanta (ATL) and Sydney as high as 149,000 miles each way through Economy Web Specials. And this particular award option requires a 13+ hour layover in Los Angeles to save 1,000 miles off the current maximum AAnytime Level 4 price of 150,000 miles each way.

What more AA dynamic award pricing means

American Airlines management has been clear to investors that the airline is moving toward dynamic award pricing. And in a statement to TPG in May, an American Airlines spokesperson confirmed that the airline is continuing to add “dynamic awards called web specials.” So, the expansion of dynamic pricing/Economy Web Specials to more routes shouldn’t be a surprise.

As we point out above, it’s not all negative. From just one credit card sign-up bonus, you can now generate enough AAdvantage miles to fly nonstop between the U.S. and Australia. The Citi® / AAdvantage® Executive World Elite Mastercard® is currently offering 50,000 bonus AAdvantage miles for spending $5,000 on purchases in the first three months of account opening.

Combining the 50,000-mile bonus with the 5,000+ miles you’ll earn from meeting the minimum spending, you now have enough miles to fly round-trip between Los Angeles and Sydney:

Alternately, small-business owners could consider the increased offer on the CitiBusiness® / AAdvantage® Platinum Select® Mastercard®. You’ll earn 65,000 American Airlines AAdvantage® bonus miles after spending $4,000 in purchases within the first 4 months of account opening — more than enough for a round-trip flight to Australia, with miles left over for another trip.

The information for the CitiBusiness AAdvantage Platinum card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

However, dynamic award pricing generally is bad news for those looking to travel during peak travel periods and at the last minute.

Featured photo by Patrick T. Fallon/Bloomberg via Getty Images.

Delta SkyMiles® Platinum American Express Card

Earn 90,000 bonus miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new card in the first three months of card membership. Offer ends 11/10/2021.

With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.

Apply Now
More Things to Know
  • Limited Time Offer: Earn 90,000 Bonus Miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new Card in your first 3 months. Offer expires 11/10/2021.
  • Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
  • Earn 3X Miles on Delta purchases and purchases made directly with hotels.
  • Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
  • Earn 1X Miles on all other eligible purchases.
  • Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
  • Enjoy your first checked bag free on Delta flights.
  • Fee Credit for Global Entry or TSA Pre✓®.
  • Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
  • No Foreign Transaction Fees.
  • $250 Annual Fee.
  • Terms Apply.
  • See Rates & Fees
Regular APR
15.74%-24.74% Variable
Annual Fee
Balance Transfer Fee
Recommended Credit
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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.