American’s loyalty chief reveals the fate of AAdvantage award charts
The days of American Airlines' award charts are numbered.
Of the Big 3 U.S. carriers, AA is the only one to still publish award charts. In recent years, the other two big legacy carriers in the U.S. have ditched these charts in favor of dynamically priced awards tied to selling fares. Delta was first to lead the charge back in 2015, and United followed in 2019 when it removed award charts for its own flights, followed in early 2020 by flights operated by Star Alliance partners.
American Airlines, on the other hand, still posts its award charts — if there's saver award availability, the chart will tell you exactly how many miles you'll need.
But not for too much longer, as Rick Elieson, the president of American's AAdvantage loyalty program, explained in a meeting with TPG at the carrier's Skyview headquarters.
"What the team is actively working on is what can I give you that would be most useful to you," he said in response to whether AA's award charts are here to stay.
Elieson sees the value of an award chart — provide goalposts for flyers aspiring for a given award, while also keeping the airline accountable to a given mileage rate — but he thinks AA's current implementation falls short of delivering that value.
For one, the carrier is working to make miles more into a currency that replaces cash across the travel journey, not just for the flight itself. "Increasingly, I want you to redeem miles for more and more things, not just awards," he told TPG.
The current award charts list your mileage redemption options for flights only — there's no mention of using your miles for other ancillary purchases like extra-legroom seats, upgrades, and more.
Additionally, ever since introducing dynamically priced redemptions, or Web Specials as American calls them, the airline has quickly expanded the availability to include more cabins and additional routes. During the past year, Elieson noted that the carrier is seeing a higher proportion of Web Special redemptions since the cost of these awards has been lower than the price stated on the saver award chart.
That's an issue for Elieson. "I'm steering you towards a goal when the goal is actually more attainable. So in either direction, I feel like it's misleading," he said.
To compensate for these two fundamental problems with AA's current award charts, Elieson has the team working on a replacement. He didn't get into specifics, but he outlined what to expect: "I always want to provide... goalposts and some expectations" around how much awards should cost.
Related: TPG's interview with Rick Elieson about AAdvantage improvements you'll see in 2021
How American will convey those expectations will look different in the future.
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.
For an airline, that'd likely materialize as a website where you enter your origin and destination, and the algorithm spits out a range of historical award prices, as well as what travelers are paying nowadays.
If that concept sounds familiar, it's nearly identical to what Air Canada's Aeroplan program did with its relaunch in August 2020. The airline still publishes an award chart, but instead of offering fixed pricing, the chart lists ranges for Air Canada flights.
There's a big asterisk though. Aeroplan's website notes that "you can expect your reward flight to fall into the range displayed during normal times. If you're looking to travel in a high-demand period, such as a popular time to go to a destination, the cost of the trip in points might fall above the range."
Of course, time will tell how American decides to revamp its award charts, especially regarding redemptions on partner airlines, but it's definitely something the airline is working on.
Does this mean an AAdvantage devaluation is coming?
For many TPG readers, removing award charts is a codeword for an upcoming devaluation. After all, both Delta and United quickly raised the price of awards after scrapping their charts. If — or when — American does drop its award chart, that would leave Alaska Airlines as the biggest remaining U.S. carrier to still publish an award chart.
Elieson, however, insisted that he isn't trying to pull a bait-and-switch in such a change. "Don't be," he said when asked if flyers should be afraid of an upcoming devaluation. "I certainly have no intention of that."
Related: American makes it easier to earn status, extends loyalty benefits
In his explanation, Elieson said that since paid fares are low right now, so too are awards. "If fares continue to be lower than historical norms, then so will awards."
Of course, the flip side is that as fares rise once again — a trend we're seeing domestically as leisure travel quickly recovers — awards will also go up in price under the new model.
Elieson doesn't think that fares, and mileage pricing, are going to rise so fast, especially for aspirational awards. "I think we're a long way off from fares being higher... long-haul international, what do you think fares are going to do?" he asked. Long-haul international flights typically offer the best redemption value for awards, and with a slew of travel restrictions and low demand, paid fares — and award prices — are still much lower than historical averages.
Either way, it's seemingly only a matter of time until award charts as we know them are a relic of the past. In Elieson's mind, that's not bad news. "I think people are going to have lots of opportunities to get good value on miles for the foreseeable future," he concluded.
We'll have to wait to see what happens, but one thing is for certain – as airfares rise, expect award pricing to creep up as well, especially once American ditches its current award charts.
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