Why are American Airlines rewards so expensive?

Today, I want to talk to you about why American Airlines rewards are so expensive.

As you may know, AAdvantage is one of the largest worldwide frequent flyer programs, with more than 100 million members, and American Airlines is its owner. This particular program enables the traveler to accrue miles whenever the individual flies with American Airlines or any of the partners, so that he or she can use these to get free flights and other gifts. However, it is the consensus of many AAdvantage members that many airline award redemptions reasonably took a much higher number of miles than other airline awards. So the question that begs an answer is: Why are American Airlines’ rewards so costly? Regarding this, several explanations can be pointed out:

which requires higher mileage to be earned for rewards.

Concerning American Airlines, the AAdvantage program has one of the highest redemption rates to get a free ticket in economy class among the US legacy airlines. For instance, a one-way economy redemption for an Economy Class ticket on a domestic carrier within the continental United States could cost as much as 30,000 AAdvantage miles. This is more expensive than Southwest, which only needs as few as 5,500 Rapid Rewards points for a similar one-way flight. It also means that even on international routes, American Airlines will want you to spend thousands of more AAdvantage miles than with other airlines.

This implies that while getting AAdvantage elite status gives members a lot more with American, they have to fly so much with the airline just to earn enough for the same flight rewards as programs like Delta SkyMiles or United MileagePlus. Of course, there are other avenues to getting miles through other purchases and other credit card-affiliated flights, but those miles are not as easily attained as through actually flying with American.

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Dynamic peak pricing was seen in 2016 when American Airlines unveiled the “AAnytime” awards, which are effectively dynamic awards that are available for AAdvantage bookings on some routes during popular travel seasons. This means that established routes that would ordinarily be priced, for example, New York to London, may now be priced at 100,000 miles or more for a round trip in the summer. Earlier, these types of seats were offered at this tariff only.

Offering a greater amount of award availability, AAnytime awards made the costs both, in miles and a large number of carrier-imposed surcharges. American argues that this is more accurate to represent the demand for more popular or higher O/D flights. However, critics argue that it undermines Advantage miles and erases people’s effort, time, and money they invested in earning those miles.

Initially, these changes came in the form of higher award availability for business and first-class seats.

This aspect was illustrated by the following information: Business-class flights on long-haul international routes on American Airlines already entail massive miles, such as 90,000 AAdvantage miles one way between North America and Europe. Occasionally, America increased the number of Business and First-class award seats by 5,000 to 10,000 for each direction. American says it gives the award pricing a much greater range, while critics say it penalizes frequent fliers who were expecting fairly reasonable value the next time they use up their mileage balances.

Taxes and surcharges on awards When it comes to higher taxes and charges, various aspects come into play when delivering awards.

Another little-discussed factor that goes towards the overall high redemption of American Airlines rewards as compared to some other airlines are the taxes and carrier surcharges. For instance, a round-trip award for travel between the USA and London is approximately $500.00 in taxes, charges, and surcharges that are charged by the airline, such as fuel charges. These fees add up to the overall direct cost burden on the traveler, even when using AAdvantage miles for redemption.

However, the majority of LCCs, such as Southwest, do not apply fuel surcharges to award tickets at all. And there are programs like Air Canada Aeroplan where the carrier-imposed fees are much lower than this standard for international reward flights that originate in North America. Thus, the overall cash paid is dramatically less for the same flights for their reward program participants.

As a result of these changes, it is clear that more miles are now required for upgrades.

Unlike in the past, the bonus programs of business class and first class are not as generous to American Advantage members as they used to be, as one has to use many more miles than before. Earlier, attaining higher elite tiers in the program gave the passenger the advantage of upgrade priority over the other passengers. Today, upgrades usually involve thousands of 500-mile Upgrade Credits that are collected when purchasing a more expensive ticket, or thousands of miles to confirm the upgrade at the moment of a ticket purchase. Either way, the retrieval of miles costs more than what it used to be in the past, which should suffice to give a clear picture of the situation.

In conclusion, it can be noted that, indeed, the rewards of American Airlines are more costly in comparison with many competitors due to several reasons. Award flight costs are significantly higher, with many tens of thousands more AAdvantage miles needed in most circumstances. It has now implemented dynamic peak pricing during these periods and there is an increase in the cost of mileage as well. Carrier-imposed surcharges and taxes are a few hundred dollars higher than the overall cash costs on international award flights. Lastly, upgrades necessitate significantly more miles or 500 500-mile upgrade Credits to validate.

Still, it has utility, but members of the AAdvantage program must set out strategies on how to earn many more miles in the long run, given the high rates needed for redemption. Or learn how to counter the higher costs by learning about the best bonuses and credit card rewards for earning more miles. Hence, to those who fly infrequently or change credit card companies sparingly, adding balances to their accounts might be quite a feat. This makes the costs of availing the rewards offered by American Airlines unaffordable for some.

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