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American Airlines announced some negative changes yesterday regarding checked baggage fees and only offering miles and Loyalty Points on direct bookings (in most cases).
They made one further change, this time relating to the cost of transferring miles to another AAdvantage member. Surprisingly, the change is a positive one that could mean it’ll make sense to transfer miles in the future rather than buy them.
You can access the miles transfer portal here. There’s a minimum transfer amount of 1,000 AAdvantage miles, while it maxes out at 200,000 miles. You’re allowed to transfer up to 200,000 miles per year or receive up to that amount per year.
Transfers used to cost 1.5cpp (cents per point) which represented very poor value because buying miles doesn’t tend to cost much more than that. Paying that high fee to transfer existing miles therefore made very little sense.
The change that American Airlines has made is that the fee has been slashed to 0.5cpp – a reduction of two-thirds. While that’s more than some other airline loyalty programs that offer family pooling for free (e.g. British Airways Avios), it does mean that transferring existing miles from one account to another could be worth it in some circumstances rather than buying miles.
With the other changes that were announced yesterday, I speculated that Delta and United might follow American’s lead in increasing checked baggage fees and only awarding miles to those who book directly in the future. Both those airlines charge similar fees to what American Airlines used to charge; Delta charges 1cpp plus a $30 fee to transfer, while United charges 1.5cpp plus a $30 fee. While it would be nice to think that they’ll follow American’s lead with reduced transfer costs, I doubt they’ll feel as much pressure to make a change such as this. That’s because I imagine that frequent flyers looking to transfer their miles are far less numerous than the number of people who check bags or book their flights through OTAs. I’d be more than happy to be proven wrong though.
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I understand why this is viewed as
a “positive “ change. AA didn’t do this to help out its fliers though. It’s a positive change for AA because it costs them nothing to transfer points. Few people did it because they already paid for those points in one way or another and resented being charged to move them. Now the price is lower, more folks will do this, increasing AA revenues through volume rather than higher prices.
Yes, some customers will benefit, but to be clear, that was never the impetus for this program “enhancement”.
The cost of nothing is not fully true I’d say. While the transfer is just an entry in a database, this change makes it more likely that the miles actually get used, instead of “dying” as a profit to AA (as every mile is a mini liability in their books)
This is pretty great for people who infrequently travel on cash fares with their children. It becomes reasonable to set up an AAdvantage account for a young child, bank some miles, then transfer to a parent’s account before the 24 month expiration.
Won’t ever be a lot of miles but if the 24 month expiration is a concern for a child’s account (as it is for my own!), this is legitimately awesome.
It’s also a cheaper way to “top off” any award miles from a P2->P1 rather than buy the miles outright.
If only AA would go back to being a Citi TYP transfer partner now…
It now makes sense for recovering AA points of a deceased loved one. The Delta and United points effectively die with them.
If it’s a meaningful number of miles, and you know the account credentials, you could just book awards from their account.
UA and AA also both generally allow the transfer of the miles upon death for no fee. See Flyertalk.
This change, however, makes it worthwhile creating AA accounts when buying tickets for family/friends who don’t fly much and don’t have any interest in playing the game as you can then later receive some value from their meager earnings by transferring the miles to your own account for a small fee.