American AAdvantage Launches Cash & Miles Awards: Are They Worth It?

A couple of months ago, American AAdvantage announced plans to introduce cash and miles award redemptions in the near future. There’s now an update, as this feature will be rolled out over the coming weeks, and we have some more details about how it will work.

Book flights with AAdvantage miles & cash

American is introducing the ability to book tickets using a combination of cash and miles. AAdvantage members should progressively see this new redemption option rolled out in the coming weeks, both through aa.com and American’s app. This is initially expected to be live for AAdvantage members with accounts registered in the US, and for domestic US flights on American, excluding Alaska and Hawaii.

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Here’s how American describes the process for booking with a combination of cash and AAdvantage miles:

1. Once logged into the AAdvantage account, members will select their desired flights with cash
2. During checkout, members will be presented with an optional trip insurance offer
3. After making their trip insurance selection, available cash and miles options will be displayed; members can use a slider to choose the combination of cash and miles that best fits their preferences
4. Once a selection is made, the cost summary will automatically update to reflect the chosen combination
5. Members can then enter their payment information and complete their booking

Here’s how SVP of American AAdvantage, Scott Long, describes this:

“At American, we’re continually evolving the AAdvantage program to deliver more choice and flexibility for our members. The introduction of cash and miles is another step in our ongoing effort to provide AAdvantage members with more personalized ways to engage with the program and get more value from their membership.”

Is this a good use of American AAdvantage miles?

This AAdvantage miles and cash feature is rolling out over the coming weeks, so it’s hard to know for sure what the value of redemptions will look like. I asked American, and they weren’t willing to share the exact value members will get with this, or if the rate would be fixed.

American did share the below screenshot, but that doesn’t actually tell us how much of the cash fare is being replaced by the 11,100 AAdvantage miles being redeemed.

There is a precedent for these kinds of redemptions, so let’s talk about that, as I think it’s not too hard to figure out how this will 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 purpose of these redemptions is to enable people to use their points with 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, maybe with those having a co-branded credit card getting a better redemption rate. There are no signs of this yet, and even if there is a better redemption rate, I still doubt it’ll be terribly lucrative.

Bottom line

American AAdvantage is starting the rollout of cash and miles redemptions, giving members a new way to redeem their miles. This is now starting to go live, and should be available across accounts within the coming weeks. 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?