(Update: awards on Alaska metal devalued as well) Alaska Mileage Plan: AA awards to begin dynamic pricing starting 3/1.

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Update: Loyalty Lobby reports that Alaska has now posted notice of increased top-end prices for awards on Alaska metal as well.  The increases affect flights that are longer than 1400 miles and will be 17%-37%, depending on length.  The top end of redemptions for flights longer than 2100 miles will be 95,000 Alaska miles (up from 70-80,000).  Alaska had previousely mentioned that members would be given 90 days notice of any award change.  They are violating that here, posting it for March 1st, the same day the AA changes take effect.

Alaska Airlines announced the this week that, starting March 1st, dynamic pricing will apply for award travel on American Airlines.  There aren’t any additional details that Alaska has revealed and the note on the website makes it sound as though it’s limited to flights within the US and Canada.  There has been wide-spread speculation that Alaska will devalue it’s traditionally generous award chart now that it’s joining One World.  Is this the beginning of the end of Mileage Plan or much ado about nothing?

Scared of Devaluation
Is the long-feared Mileage Plan devaluation starting?

American Dynamism

Alaska Mileage Plan has been one of my favorite airline programs for years.  A combination of free stopovers on one-way tickets and incredible redemption rates (on many partners) combined with the ability to accrue based on actual miles flown as opposed to spend makes them on of the more valuable currencies out there.  But since joining One World, there is almost universal apprehension that a devaluation shoe is about to drop…right on top of Mileage Plan.

Over the weekend, the following note appeared on Alaska’s website under the award charts for domestic travel:

There are no further details beyond what’s posted and it doesn’t say that the award charts are going away, simply that they can vary based on demand (which already happens with Aer Lingus, Iberia and Qatar).

Lucky at One Mile at a Time makes some very good points about why this might actually be a good change:

  • Alaska might now have access to additional levels of AA award space moving forward as opposed to just saver awards.
  • It’s possible that Alaska could have access to AA “Web Special” awards, where awards are cheaper than the regular saver award prices.
  • Alaska already has this “dynamic” award pricing on partners like Aer Lingus and Qatar. Alaska has a regular published award chart for when a partner airline has saver award availability and then much higher pricing for other flights that don’t have available saver awards.

These all could be true and be part of erasing some of the disparity between redemption rates across AA and Alaska.  How Alaska has handled recent partner additions gives me pause, however.

From Best to Worst

Carrie will rightly tell you that Cathay First Class is one of Alaska’s sweetest sweet spots.

Alaska has historically had a non-traditonal award chart where each partner has invidividually negotiated redemption rates.  Once Alaska joined One World, there were questions over how new OW partners would be integrated.  Would they continue to have generous redemption rates like current OW partners Cathay Pacific, JAL and Qantas?  Or would they devalue everything for a unified One World chart more in line with their partners?  So far it’s been the worst of both worlds.

Alaska added both Royal Air Maroc and Royal Jordanian within the last two months.  Both airlines have quirky products and some interesting routes that are fun to explore, as well as good transatlantic availability.  So, great additions to the program, right?  Not so fast. Here’s the award chart for Africa (including Morocco):

Gulp.

In a word, these are putrid.  Pricing is far cheaper on AAdvantage where you can redeem 75,000 AAdvantage miles for one-way business class between the United States and Africa, 25k better than Mileage Plan.  And if you think those are bad, look at Europe:

These are roundtrip prices, right? Nope.

These prices are almost beyond belief. 100,000 miles for a one-way business class ticket from JFK to Casablanca when AA charges 57,500? And if you want to use the free stopover and then take a short flight to Europe, it’s 120,000 miles one-way!?  Again, the same flight using AA miles would be 57,500 without the stopover.  There’s no getting around the fact that these are effectively non-starters and they’d be laughably bad if they weren’t actually published on a commercial website.

As to the hope that dynamic AA pricing might lead to less expensive or more useful availability, let’s take a look at two recent partners that they’ve rolled out dynamic pricing with.  First, Qatar Airways:

130k for an economy seat to Doha

Is 42.5k for economy or 85k for business particularly good?  Not really, but it’s not out of step with other OW programs.  But, once saver goes away: 130k. For economy. Non-saver business goes up to 200k one-way.  All dynamic pricing gives us is access to awards at a 250-300% premium.  How about Aer Lingus?

I didn’t prices could get this bad.

Sorry if I just made you spit out your coffee.  While the economy non-saver pricing is “just” double the saver, take a look at those business prices.  280K one-way from the US to Europe. Even worse, in my experience, approximately 90% of all business availability on Aer Lingus is at the “non-saver” rate.  Available all the time, but you’re gonna pay for it.

Quick Thoughts

Before going further, let me say that I am an Alaska Airlines fanboy.  I’ve flown them for years.  Their customer service is exceptional, the companion fare is one of the great unsung heroes of points and miles and we’ve been able to fly premium cabin Cathay and JAL numerous times at great redemption rates.

I have a significant stash of Alaska miles and I’d love to be able to get on board with Lucky and say that AA going to dynamic pricing could be a good thing.  But since joining One World, Alaska has given us no reason to be hopeful.  Their new partner award pricing has been a complete trainwreck and it’s hard to believe the AA change won’t follow suit. Like the proverbial frog in the pot of water, we might already be in the midst of the devaluation before we realize that the water’s getting mighty warm.

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MYRflyer

I’m not seeing a change yet, with the searches I’m performing.

[…] I think we have been on a multi year slide towards these rewards programs just becoming a forgettable minimum discount program as the path to have everything become revenue based marches on. (Update: awards on Alaska metal devalued as well) Alaska Mileage Plan: AA awards to begin dynamic pri…. […]

paul5795

I have been down on Alaska Mileageplan for awhile now. The problem is that while you can still get great Mileageplan deals on Asia based carriers, not so much on any other airlines. Trying to find some decent redemptions on flights to Europe, North Africa, the Middle East, or South America using Mileageplan miles is, well, extremely hard. We researched and booked multiple award flights for the summer of 2022 into 2023 using different miles, but we were only able to use our horde of Mileageplan miles on one of them: a flight to Vancouver. Whoopdeedoo.

Jorge

Wow, do you’ll travel to Africa and Asia during Covid rollercoaster?
How do you manage?

I had to cancel, involuntarily, my first class trip to Japan. Quarantine is never an acceptable option to me.
Some countries restrict to nationals only. Testing positive oversees is a nightmare I think, you can’t come back until a negative test is provided.

rj123456

Alaska in the canary in the coalmine. I suspect American is going to get rid of those nice 75K business class redemptions to Asia, so welcome to AApesos.

Dick Bupkiss

BOHICA,

MYRflyer

I’ve been sitting on 55k Alaska miles. The original plan was to use r/t to STT on American. Months!! I’ve been looking for ANY availability ….. once in a blue moon you’ll see a 12-20 hour itinerary pop up but even that is rare. Pre covid these 55k would be used for Biz on Cathay but too much trouble to use now. I look forward to this change so I can burn these miles and move on.

Mick Dodge

Friends don’t let friends use Alaska Air miles on American

YoniPDX

Friends don’t let friends fly on AA metal…. Period.

Hadn’t flown AA in 20 years – All the flights cancelled cancelled since March 2020 (COVID) AA is the only one the screwed me over.

Lrdx

While I agree this pricing sucks hard, if the previous situation was that these flights were unavailable, and the value of your miles was a big nothing, then it’s still kind of an improvement…

People seem to always forget that your miles worth nothing if the airline doesn’t allow redemption for a flight where (and when) you want to go.

There is no devaluation until the price of previously available flights (e.g. flights on Alaska metal) go up.

Lrdx

aaaand it’s gone.

Scott

For reference US-Casablanca on RAM is 88k etihad ROUNDTRIP. So it’s less miles numerically, it’s RT not one way, and the miles are way easier to get as they transfer 1-1 from amex.

Jorge

How about going yo Spain and then to Morocco on Iberia?
shorter flights, more availability.

Larry K

I didn’t read Lucky’s piece, so sorry if he gets into it. But I wonder what is going when Alaska offers dynamic pricing for an award on a partner. My hunch is that I don’t think it’s a partner “award” at all. In other words, maybe what’s going on here is not that Qatar has some class of inventory that they will make available to partners at a higher mileage price. But instead Alaska is simply willing to buy a ticket on a partner airline and then take your miles to do so. I imagine this sounds like the same thing — and maybe it is to some extent — but at least that would start to give us a sense of how it’s doing the valuation if we’re trying read tea leaves for the future.

I would guess the price that Alaska pays or partners is not actually the retail price but instead is some kind of inter-alliance negotiated rate. If all that is right there is at least some reason here to be hopeful about using Alaska miles or American. You would think in theory that any agreement about how to price non saver awards between the two airlines would be reciprocal. Both benefit from the relationship. While I’m sure that Qatar would like to include segments for Alaska in some of its awards, I doubt this is really a big thing. Wheras I would expect that there is much more of a reciprocal arrangement between Alaska and American.

loungeabuser

Time to sell the blog.

Frank

I would wager that it is extremely unlikely to be good news. Far more likely is very bad news.

Dick Bupkiss

The Alaska devaluation that you see rolling out here is actually just a minor side-show. It presages the upcoming major American Airlines devaluation, which is going to look a lot worse.

brandon

wait, AA can get even worse?

Darin

Isn’t this conflating two issues though?

RJ & RAM saver award pricing is awful, so even if saver award space is available, it’s not a good redemption. Ok agreed.

But your data points are showing that when standard awards are available for partners that also offer dynamic pricing, they’re still available at those lower redemptions (30k Y redemptions on EI, 42.5kY/85kJ on QR). So yeah, you would never want to book those EI/QR dynamic awards, but when standard is available it’s not outrageous.

Which should mean that for AA, nothing really changes except that where you currently see no availability, you may see awards available for astronomical pricing. It doesn’t prove that standard will suddenly go up. So what’s the concern with dynamic being offered, other than offending us with ridiculous prices that savvy customers will never choose (but others might).

Darin

The point about better pricing was that AA sometimes has dynamic awards priced lower than their standard pricing. So it’s not uncommon at all on AA to find domestic awards priced less than the 12.5kY/25kJ standard award price. But no one yet knows whether AS will be able to show these or if those are truly AA-only web specials. In the former case, we would see award prices actually come down, in the latter it’s just status quo, with additional sky-high options added in.

The EI/QR examples just don’t really tell us that much, as we don’t know how AS/AA will handle cross-partner dynamic availability. But it’s entirely reasonable to speculate that it COULD lead to lower pricing and also that it’s unlikely to lead to higher standard pricing in the short term.

Of course, AA sucks at making premium inventory available, so what will show up on AS to most people’s eyes is that all of AA’s premium award prices are ridiculous, when in reality they’ve just gone from not available to not affordable.