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American Airlines and US Airways are currently offering huge bonuses on transfers from SPG Starpoints. Until July 31, 2014, you can transfer 20,000 Starpoints to 30,000 miles in either program.
American Airlines and Citi are still offering 100,000 miles on the American Airlines Executive Card, a deal which has been around since January, though presumably is on life support since the landing page is now gone.
US Airways and Barclaycard upped the public bonus on The US Airways® Premier World MasterCard® to 40,000 bonus miles after first purchase this year, its highest level in my memory.
All this is great news, or is it?
- Why do I feel like American Airlines and US Airways are scamming us?
- Why doesn’t it bother me?
Right Now
The bottom line is that it has never been easier to earn US Airways and American Airlines miles.
The Near Future
Early next year, the AAdvantage and Dividend Miles programs will combine as part of the integration of the New American Airlines. We will get a single award chart for the new program, and I expect it to be worse than either of the current American Airlines or US Airways charts.
The Scam
I don’t think this binge of giving miles away and the upcoming devaluation are coincidental.
I think the planners at American Airlines and US Airways know they’ll be offering us a much worse award chart in early 2015 even if every specific award price hasn’t been chosen.
To offer us seemingly huge mileage bonuses before the devaluation without noting the devaluation is deceptive in my opinion.
Readers of this blog know the drill. Take the big bonuses, but plan to redeem by early 2015 for travel through early 2016 at current prices. You can redeem both types of miles for travel up to about 11 months in the future.
Joe Schmo, who doesn’t read this blog, is about to have the value of his miles slashed completely unexpectedly after loading up on American Airlines and US Airways miles through the various offers.
To me what US Airways and American Airlines are doing is akin to a government saying, “Convert your currency to ours and invest in our bonds.” And then a few months later, devaluing its currency overnight once you’re locked into those bonds. If the New American’s chart requires 30% more miles for redemptions, American currently expects such a devaluation, and American is extra-aggressively trying to get you to earn more miles now, doesn’t the analogy hold? Is there any difference besides scale between the two examples?
Hopefully I’m totally wrong, and the New American’s chart is identical to American’s (or even better, US Airways’) chart, and American and US Airways aren’t actively trying to scam us right now by offering bigger-than-normal bonuses while knowing that they plan to snatch back most of those miles through a devaluation that’s only 6-8 months away.
Raise your hand if you think no devaluation in 2015 from the New American is likely.
Raise your hand if you think US Airways and American know a devaluation is coming and are more-actively-than-usual encouraging us to load up on miles that will become worth less very soon without disclosing that a devaluation is coming.
Why I’m Not Upset
Just because I think they’re trying to scam us doesn’t mean I’m upset.
I actually love American and US Airways’ strategy of enticing us to collect miles. I’ve been sufficiently enticed!
- I just got the Citi Executive American Airlines card last month and hope to get its 100,000 mile bonus soon.
- I have gotten The US Airways® Premier World MasterCard®‘s 40,000 mile bonus twice.
- I expect to transfer Starpoints to US Airways miles this month to take advantage of the 20k-points-to-30k-miles transfer bonus.
But I am collecting all these miles knowing that they have a soft expiration date. If I don’t redeem them by early 2015 for travel by early 2016, I’ll probably get a lot less value, in the realm of 20%, 30%, or 40% less value.
Who Did a Devaluation Better?
When United and Delta announced big devaluations of their charts in 2013, they didn’t precede those with huge promotions to lure us into collecting more of their miles.
We didn’t see 100,000 mile sign up bonuses on their credit cards or transfer bonuses from Membership Rewards or Ultimate Rewards.
Worst Case Scenario
I am confident I can beat the New American’s devaluation, but my confidence is only 100% if award-chart changes are announced with some notice.
United did a great job of this. It told us on October 31, 2013 that award prices were going up for redemptions beginning February 1, 2014. We had four full months to redeem at the old prices for travel through early 2015. I still have an upcoming Lufthansa First Class award at the old prices.
Delta did a mixed job of this, telling us in August 2013 that travel after June 1, 2014 would cost more miles effective immediately. Then in November 2013, it made some of those changes effective February 1, 2014 without notice. Delta may have learned its lesson though since its newest award chart for awards booked starting January 1, 2015 was announced with tons of notice.
American and US Airways generally seemed trustworthy to me, but they made 17 changes in April with no notice including eliminating stopovers on American Airlines awards, eliminating American Airlines (RTW) Explorer Awards, and raising the price of a popular US Airways award.
If American handles its new award chart like that with no notice, that will make it much more difficult for me to beat the devaluation. Ideally the new award chart would be announced with a few months notice, so we’d all have time to redeem at the current prices.
Bottom Line
I know American Airlines and US Airways are being more aggressive than usual in trying to get us to collect their miles through mega bonuses.
I think they know they will start offering a far worse award chart in 6-9 months from now, which will effectively devalue the miles we get right now.
I think this is extremely deceptive, bordering on a scam.
I won’t be hurt by any of this–far from it! I’m taking the extra miles and planning to redeem them before any award-chart price increases. I’d advocate the same, or steering clear of the big bonuses.
- American Airlines and US Airways are currently offering huge bonuses on transfers from SPG Starpoints. Until July 31, 2014, you can transfer 20,000 Starpoints to 30,000 miles in either program.
- American Airlines and Citi are still offering 100,000 miles on the American Airlines Executive Card, a deal which has been around since January, though presumably is on life support since the landing page is now gone.
- US Airways and Barclaycard upped the public bonus on The US Airways® Premier World MasterCard® to 40,000 bonus miles after first purchase this year, its highest level in my memory.
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you are not wrong on this one. the previous twos set the precedent for the coming change. the question now is who is a better value at the end of the day or to be the same among all.
AA has become the most untrustworthy Airlines in the world (no notice changes to stopover and Explorer awards and more categories of higher mileage requirements after reducing Saver award availability).
Your plan it good unless AA does the “sneaky” thing by reducing the Saver awards more between now to 2015 and you are stuck with their Zimbabwean currency/AA miles.
Don’t give them any revenue ticket $$. Just burn miles even if it is Merchandise before their merger..
Scott the title of this post may be incomplete since it lacks Citi. It’s possible this is a collusion among AA, US Airways and Citi in the case of the 100K AA offer. In other words, Citi has already paid for the miles so I guess they either have direct knowledge of the upcoming devaluation or they just assume it will be a bloodbath and are dumping their stash now.
My primary hope is that the lifetime AA status that many of us enjoy will continue past the devaluation. Whether that deval happens in 2014 or 2015 remains to be seen.
Just before United upped their miles I booked several International trips even though I knew I would not be able to use them for those itineraries. I have sense re-booked them several times and found the fares are based on the miles before the devaluation. I plan on doing that with American as well. Hopefully it will work out the same
Of course it helped that I am a platinum member on United and can make changes with out it costing me anything.
Does any one know what American’s policy is on re booking award travel?
The devaluation has already been calculated and the numbers finalized with changes (increases) between 50% – 100% ++ especially for first class, long haul partners. It’s not if the changes are made … It’s when the changes are announced (new award chart already finalized).
You know the saying “it’s not over till the fat lady sings” … well she’s clearing her throat right now. Of course there’ll be at least two other sites (whose authors are simply mouth pieces of Suzie) that will be “shocked” but if they don’t already know this, then they’re just stupid.
Fuel costs are almost always on the Up. CEO’s always are trying to Up the bottom-line. Citi, strangely (imo), has allowed many MS’ers to accrue 500k+ Adv miles w/ their Exec. Barclays, as the post notes, highest bonus yet. Quite frankly, I feel like a sucker for doing legit spends on my sole, Citi Exec. for the 110k.
I’ll be curious to see what kind of availability we shall see before the looming, inevitable devaluation.
American is much more restrictive than United on some types of changes. With AA, you can change your dates of travel on an existing award. But if you want to change your destination or class of service with AA, you must cancel the existing award and re-book a new award from scratch. (I’ve also heard that, if you want to change between an AA-only award and an award that includes partners, you must cancel and re-book from scratch.)
Personally, I value my UA miles substantially higher than my AA miles because UA/Star award availability is generally much better than AA/OneWorld availability domestically and to Europe. (There are exceptions – for example, AA availability to Europe last April for 20,000 miles one way was excellent.)