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The recent history of airline mile devaluations and who is next

by on Wed February 4, 2015 • No Comment


Late 2013 to mid 2014 was the most disruptive time in recent memory for award chart changes. It was painful, with a new round of surprises coming every month it seemed.

And with last week’s announcement by British Airways that it is raising most first and business class award prices substantially, many active mile collectors are on edge about more devaluations.

To help put it in perspective, we looked back at the last several years of award price changes to see just how often the programs change, and whether we should be worried about big cuts to come later this year or in 2016.

Here is a rough timeline of recent devaluations:

Alaska MileagePlan

January 2014: Select modest award price increases, no change to partner award prices.

July 2008: Launched 3 tier award chart with higher prices for peak periods, and coach saver increased to 25,000 from 20,000 miles

American AAdvantage

February 2014: Migrated to 5 award tiers, significantly increased highest possible award prices, partner prices unchanged

October 2008: Broad increases in award prices

British Airways Avios

April 2015: Premium class awards increase, introduction of peak / off peak

November 2011: Change to distance based awards, launched as Avios

Delta SkyMiles

November 2013: Increase of various award levels to match United

August 2013: Increased cost of international business class awards

September 2012: Fine tuning of mid and high tier awards

September 2008: Introduction of 3 tier award chart, broad price increases

Southwest Rapid Rewards

March 2014: Decrease in mile per point value, Wanna Get Away awards go to about 1.4 cents in value from 1.7 cents

March 2011: Rapid Rewards moves to fare based redemption

February 2006: Capacity controls added to awards

United MileagePlus

February 2014: Large increases in international first / business class awards, among others

June 2011: Alignment of the award chart of United and Continental

October 2006: Broad increases in prices

Looking at the changes that have taken place in recent years, you can see the airlines are really paying closest attention to two kinds of awards:

  • International business / first class
  • Last minute tickets at the mid and high tier prices

Those are also the awards that tend to give you the most dollar value per mile redeemed, so it makes sense they are the focus of price changes. But that doesn’t mean all high value awards are at risk.

For example, most of the cheapest economy class awards, which can often yield very high values per point (think $1,800 tickets to Europe for 60,000 miles) have been untouched by the big devaluations.

Most of you reading here have miles with several airline programs. So it’s a good idea to think ahead to have a sense of who is giving away too much value right now. Because if you have a lot of miles in a program that’s much more generous than others, it’s a good idea to use those miles up more quickly than others.

American AAdvantage is the most likely to change.

American’s awards are much cheaper than competitors for Asia and Australia for both Economy and First / Business Class. Just 100,000 miles roundtrip in Business Class to North Asia is a bargain, as is 50,000 miles in Coach.

Their 100,000 mile Business Class to Europe award is also less than Delta or United’s, but very few seats are available at that price on American’s own flights, and most other options involve British Airways fuel surcharges that make the awards much more expensive than the 100,000 mile price indicates.

Another AAdvantage award that’s much cheaper than competitors is its 62,500 mile roundtrip domestic 3 cabin First Class award.

That really only applies to select transcontinental flights like New York to Los Angeles and San Francisco, but compared to Delta at 80,000 miles minimum for just Business Class on those flights, it’s a price that may not be ripe for this world.

American and US Airways will combine their programs this spring, but we don’t expect an updated award chart until 2016, because wholesale changes during the most sensitive part of the American / US Airways merger are unlikely.

And if you are mostly an Economy Class flyer within the U.S. or to Europe you don’t have much to worry about.

But if you were saving up for one of the above awards, get moving on booking trips now and use the extra time the merger is affording you.

On the flip side, Delta SkyMiles could be the least likely to change. Delta has been the most aggressive at relaunching its program and reducing the number of miles it makes available. In turn, don’t expect major adjustments over the next year unless fare conditions change rapidly. The 5 tier award chart gives good flexibility for adjusting to changes in airfare without making large adjustments to award prices, with the exception of partners, which are only available at the lowest price level.

Even United is showing signs of softening. Since it’s going to start awarding miles based on how much you pay for flights rather than how far you fly, it’s going to be printing fewer miles. And it’s currently holding a quiet award sale, rolling back some of the price increases it imposed on international business class awards on partner airlines.

It’s a sign many mileage program members like you have reached a point where they won’t take any more price increases, and would rather sit on the miles rather than use them at prices that just don’t seem reasonable.

The good news is, even with recent price increases, mile prices have actually increased at rates below the rate of inflation of regular cash over the last 25 years, so no reason to panic, and the changes we’ve seen are consistent with what we’ve seen over many decades.


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