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I Won’t Add Any More Fuel to the Fire about the US Airways/American Airlines Devaluation, Except to Say These 2 Things:

You’ve no doubt seen the news on every other blog on the internet, but American Airlines announced some significant changes to their (and US Airways’) award charts and rules, specifically:

- US Airways’ 90k North Asia business class award is now 110k miles.
- You can no longer add on the “free one way” with a stopover at the domestic hub.
- There are now 3 tiers of redemption.
- Oneworld Explorer tickets (which were useful on round-the-world tickets) are no longer possible.

Those are the “highlights” – you can read the details in the linked articles above. People are pissed because there was no notice.

But here are the 2 things I wanted to say:

1) Remember yesterday when I said everyone should calm-the-hell-down about buying US Airways miles for 1.1 cents each and wait until they have a specific trip in mind to purchase them? This is another reason…

2) As a hedge against news that is going to make you angry, you should buy shares in each of the airlines you fly. That way, when they make decisions that will benefit shareholders while upsetting travelers, you’ve hedged yourself.

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  1. I am surprised at how many people are surprised, and am amused at the very American belief that companies will always try to do the best for their customers. My rule of thumb is: what is good for the company is rarely good for the consumer. In the pre-merger discussion between US and AA, I giggled at the numbers of cheerleading customers, who have clearly never considered this possibility.

    Moreover, the only people that are shocked and appalled about these changes are those who believe that miles accrued have an actual monetary value. They don’t, until you cash them in. Only then do they have a value.

    So – in my view, nothing has changed. For those who speculatively purchase miles, travel tens of thousands of miles unnecessarily, solely to get an occasional domestic upgrade, or those that truly believe that the company values their loyalty, this is armageddon.

    • Delta has been the most financially successful big carrier in recent years, and their frequent flyer program is universally derided. I know everyone gets all bent out of shape when airlines mess with their FF programs, but – as you point out – those points are not currency. They have no value until spent, and, obviously, it’s a highly risky move to buy points in advance when it’s a currency that ONLY declines.

  2. Not that I trust any of the airlines, but perhaps this is another reminder of the value of programs such as Chase, SPG, etc., where your points/miles aren’t tied to a specific airline .. and, as you’ve pointed out, Jared, the value of cash back cards.

  3. They also took away waiving the upgrade fee for preferred members. Highly underrated perk.

    http://www.usairways.com/en-US/dividendmiles/programdetails/upgrades/mileageupgrades.html

  4. I would also note that you can still fly to Europe, stopover, and then continue to China for a grand total of 60,000 miles. That’s a pretty sweet deal, no? Yes, you’ll have to do it in coach (gasp). All I know is that when I go to book rewards, there are almost always a zillion more coach seats available than biz class seats. It seems like these bloggers who extol the virtues of flying the world in free biz class seats don’t have this problem. It always strikes me as odd.

    • We’re contractually barred from talking about flying coach :)

      The biggest issue there is finding award flights without fuel surcharges to Europe on Oneworld. With Star there were lots of options – Oneworld, not so much. That’s the biggest story here…

  5. I thought of your advice immediately when I read about the unannounced devaluations!

    I wasn’t really tempted anyway because I’m already sitting on a big stack of both USAir and AA but it is always good to have company:)

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