Originally Posted by hillrider

A beginning it is not; AA miles have been devaluing constantly at a rate of at least 3-4% annually, without factoring in the huge devaluation from the introduction of the YQ on certain awards.

When I joined AA in 1984, I was promised that for 20,000 accumulated miles and no cash I would:

• fly roundrip on any US/CA flight as long as a single economy-class seat was available for absolutely free (they picked up all taxes/fees);
• sleep one night for free at a Marriott or similar;
• and drive a midsize car for free for 2 weekend days (IIRC).

In 2010:

• flying roundrip on any US/CA flight as long as a single economy-class seat is available costs 50,000 miles plus those taxes/fees that they no longer pay for;
• sleeping one hotel night at a Holiday Inn costs 31,250 miles and doesn't include "resort" charges;
• driving a midsize car rental for 2 days is 16,000 miles (extra charges unknown);

for a total of 97,205 miles plus cash to pay for taxes/fees and "resort" charges.

In other words, 1000 AA miles of 1984 are now worth less than 389 miles (less because I am not counting in the value of the cash co-pays).

That's an annual devaluation of the accrued miles of 3.58%

It's a safe bet to predict that our miles will continue to lose a similar, if not higher, amount per year in the future. As such, I would not be surprised in the least that AA's decision to invest its very scarce IT resources to develop the "dynamic air awards" system is to support this trend.