Earlier I wrote about major American AAdvantage program changes coming in 2023. There’s one matter I didn’t address in the previous post, as I wanted to write about it separately, given that it potentially has major implications.
American’s award pricing will go fully dynamic
On the page outlining the AAdvantage program changes, American announced a (theoretically) major change to award pricing:
Introducing fully dynamic mileage awards
In 2023, award travel on American becomes fully dynamic with a new, simplified award chart.
As you can see, the details here are very limited. Here’s all we know as of now:
- These changes are happening at some point in 2023, though we don’t know when
- This only impacts award redemptions for travel on American, and not for travel on partner airlines
- American pricing will be “fully dynamic”
- American will have a “simplified award chart”
- American will eliminate the concept of MileSAAver and AAnytime award levels
- American will continue to offer last seat availability on awards
What could this look like? Should we panic?
Some might be surprised to hear this, but I’m not instantly panicking, and am not necessarily assuming this is going to be terrible. Don’t get me wrong, it’s probably not good, but I’m not convinced that a lot will change either?
First of all, the good news is that these changes only apply to travel on American, and not to travel on partner airlines. The best way to redeem American miles is on partner airlines, and that award pricing isn’t going fully dynamic. So unlike Delta SkyMiles, there’s no indication that American AAdvantage is going to be punitive with partner awards just for giggles.
I find it interesting how American says that award pricing will be going “fully dynamic,” and at the same time says that there will be a “simplified award chart.” As much as I’d love to clutch my pearls and claim that American eliminating MileSAAver and AAnytime award pricing is bad news… have you seen the current state of American’s award pricing?
The reality is that the AAdvantage award chart for travel on American doesn’t really tell you a whole lot about how much you’ll pay when redeeming miles on American. That’s because a vast majority of American awards are already priced dynamically, either below or above current award pricing.
For example, below is American’s economy class award chart for travel originating in the United States.
Then below is the calendar showing the actual pricing between Miami and Los Angeles. As you can see, in most cases at least one flight each day is cheaper than the lowest price listed.
As another example, below is American’s business class award chart for travel originating in the United States
Then below is the calendar showing the actual nonstop pricing between New York and Tel Aviv. While the highest AAnytime Level 2 cost is 155,000 miles, award pricing in this market for many months is 180,000-300,000 miles, which no signs of even the highest published award cost.
If the award chart has no resemblance to actual award pricing and what you can expect to pay, then is there even a point to the award chart? I’d argue not.
There are two ways American could go with these changes in 2023:
- American could essentially just be more transparent in the sense that it will no longer have an award chart that doesn’t reflect what people are currently paying, since award pricing is already dynamic
- American could be going the direction of Delta SkyMiles, and essentially pegging each mile to one cent toward the cost of a ticket
Personally I think the former is more likely than the latter, but only time will tell. Why do I believe that? Because if pricing were strictly tied to the revenue cost of a ticket, American wouldn’t even bother with having a “simplified award chart.”
American AAdvantage is expected to introduce “fully dynamic” award pricing in 2023, and will also introduce a “simplified award chart.” While that sounds scary, American already has dynamic award pricing, and the award chart doesn’t actually reflect how much most people pay for award tickets.
I tend to think that for all practical purposes, American already has dynamic award pricing and doesn’t actually have a useful award chart for travel on its own flights, so I don’t necessarily view this as a huge deal. Only time will tell how this plays out.
What do you make of these AAdvantage changes?