American AAdvantage has announced a couple of updates today. I’ve already covered how changes are coming to complimentary upgrades on flights within North America, and in this post I’d like to talk about what I consider to be the other biggest announcement, regarding the introduction of cash and miles redemptions. However, as of now, all we can do is speculate…
In this post:
Coming soon: book flights with AAdvantage miles & cash
American has revealed that in the near future, it’ll introduce the ability to book tickets using a combination of cash and miles. Here are all the details we have so far:
Enjoy greater flexibility when planning your next trip. Coming soon, U.S. AAdvantage members can use a combination of cash and miles to book domestic U.S. flights on American (excluding Alaska and Hawaii), with more routes to come.
Will this be a good use of American AAdvantage miles?
All we can do as of now is speculate as to what AAdvantage miles and cash redemptions will look like. However, there’s a precedent here, so let’s talk about that, as I think it’s not too hard to figure out how this will likely play out.
Looking at the “big four” US carriers, Delta SkyMiles, Southwest Rapid Rewards, and United MileagePlus, all already offer some sort of cash and points redemptions. The biggest selling point of these kinds of redemptions is that you can redeem a smaller quantity of points toward the cost of a ticket.
For example, maybe you have 5,000 points in your account, which wouldn’t be enough for a full ticket, but would be enough to get the cost of a ticket reduced.
The catch, not surprisingly, is that the cent per point value on these kinds of redemptions typically isn’t great. After all, the point of these redemptions is to enable people to use their points with ease and minimal effort, rather than to offer the highest cent per point value.
As a general rule of thumb, you’ll get at most one cent per point with these kinds of redemptions, and in some cases, even significantly less value than that.
I think one big question is whether we’ll see this somehow tied to co-branded American AAdvantage cards, whereby this redemption option is either a perk of having a card, or maybe those with a card get an advantageous redemption rate. Anyway, we’ll mark this as “developing” for now.
Bottom line
In the near future, American AAdvantage plans to introduce cash and miles redemptions, giving members a new way to redeem their miles. While exact details remain to be seen, I’d view this more as an easy way to redeem miles, rather than some way to get great value.
This will likely enable members to redeem a small number of miles to get a discount on a ticket, but I wouldn’t expect this to give you over a cent of value per mile.
What do you make of American introducing cash and miles redemptions?
None of these cash and points combinations represent a fair return whether hotels or credit cards or airlines so don't be too hopeful...
With airline programs in the US, for cash+points redemptions, it's a cash ticket that can be reduced using points (usually at poor value). With European/Canadian programs (Flying Blue/Avios/Aeroplan) it's an award ticket that can be reduced in miles required by using cash (usually allowing you to top up points needed at $0.011-0.013 per mile)
Not necessarily the case. Delta offers both cash+miles (effectively buying half the miles of an award ticket at a price that's greater than the typical value of a SkyMile) and pay with miles (only for credit card holders and only on routings entirely on DL metal: redeem 5000 miles for a $50 discount on cash airfare, with the discount applicable arbitrarily many times): the former is in line with your EU/CA characterization and the latter...
Not necessarily the case. Delta offers both cash+miles (effectively buying half the miles of an award ticket at a price that's greater than the typical value of a SkyMile) and pay with miles (only for credit card holders and only on routings entirely on DL metal: redeem 5000 miles for a $50 discount on cash airfare, with the discount applicable arbitrarily many times): the former is in line with your EU/CA characterization and the latter in line with the US characterization. Since DL generally bases award fares on cash fares (when they have a revenue fare filed), there's not much difference between the two; when only revenue fares earned elite credit, the pay with miles option had the advantage of earning elite credit.
Not necessarily the case. Delta offers both cash+miles (effectively buying half the miles of an award ticket at a price that's greater than the typical value of a SkyMile) and pay with miles (only for credit card holders and only on routings entirely on DL metal: redeem 5000 miles for a $50 discount on cash airfare, with the discount applicable arbitrarily many times): the former is in line with your EU/CA characterization and the latter...
Not necessarily the case. Delta offers both cash+miles (effectively buying half the miles of an award ticket at a price that's greater than the typical value of a SkyMile) and pay with miles (only for credit card holders and only on routings entirely on DL metal: redeem 5000 miles for a $50 discount on cash airfare, with the discount applicable arbitrarily many times): the former is in line with your EU/CA characterization and the latter in line with the US characterization. Since DL generally bases award fares on cash fares (when they have a revenue fare filed), there's not much difference between the two; when only revenue fares earned elite credit, the pay with miles option had the advantage of earning elite credit.
The second boost seems like a bummer. This seems to follow more of Delta's model; at least that free upgrade I never used can be used for snacks?
I knew this was coming when all of the big SUBs for the AA-CITI cards were elevated end of last year and beginning of this year, on top of them announcing transfer partner with Citi. Good way for them to get some of their miles back I guess for those who don’t know better.
No.
I say, yes to your ‘no,’ as-in, I totally agree, no, this will likely not be a good deal. (Now, I’m a little confused.)
On the plus side this will be really good for people who don't really live in this miles and points space and just want to burn an odd number of miles on a trip they were going to take anyway