writetorich

My view, IMHO, on AA miles.

I currently am sitting on 730,000 miles from when I "earned "1 million miles in less than 4 weeks just prior to the changeover from "all miles count" to MM Status to " only tushy in the seat miles counts". Personal circumstances had me traveling a lot less right after January 2012 or the fall of Saigon. I was a lowly gold with 1,005,000 lifetime miles and decided to jump for the 2 million.

I use to value a mile at 2.5 cents.-- maybe 3 cents I was never a "hoarder" , even with a million lifetime, My balance was very low. I always kept only enough for one spur of the moment premium cabin trip. ( I was single at the time) or an ultra expensive domestic on short notice for work ( was self employed) , even though its tax deductible a $2000 domestic fare was still a lot to pay.

I always viewed miles as redeem them while you can. "Smoke em if you got em"
My view unlike others mentalities , it was not a " Vacation Retirement RA" for future use. The mileage balance was at AA capricious unilateral rules subject to change at any time and could only go down.

Now my view has changed, I am bullish on the future value of AA miles. Its gotten so bad that I think a mile is currently 0.8 to 1.0 cents. And a penny is the upper end. more like 0.8 cents. I think the 0.8 cents is a rock bottom ratchet

However, given that AA has
1- surprisingly not allowed high annual fee affinity CITI cards with high annual spend to partially offset or eliminate the dollar revenue required for status ( maybe a pissing match or an "ambivalent" i.e. love hate relationship with Citi) , the ranks of Elites will thin. ( Barclays still does)

2- the elimination of mileage based accrual will reduce hard core FT'er hobbyist from achieving Exec plat and Plat for a pittance.

3- Earning miles ( other than lucrative sign up bonuses on a new credit card for a new card holder ) will no longer be easy.

4- Like any "currency" , once you reduce inflation and just printing the "money" ( miles) and putting it into circulation, and reduce macro circulation the value will rise.

I'm not expert , but my view is that people who fly a lot AND spend a lot will not be happy with the crazy award levels. Domestically, I never see Saaver , unless at 5 am with the rooster with a connection.

5- Unless AA changes and allows credit card spend to count toward the annual dollar spend requirements, I see a lot of thinning of elites.-- in the past , I got Hilton HHonors Diamond by spend on the Amex surpass card. I was in no way a "road warrior" I remember back when Delta ( who I hated) allowed TOP TIER via Amex spend on several cards because Amex kept sky team afloat and Delta in business during times of over capacity and weak economy,

As the circulation and massive distribution of miles by AA , dries up, they will have to reply to customer complaints that "I don't want to spend 80,000 round trip to fly to Florida in December".

Now that 80,000 miles represents, about $8000 in spend and a family of three , its $24,000 and a lot of time in a seat.

wishing everyone in our community a happy , healthy 2017

Since, I'm not that smart, what do others think??

I think that once AA successfully takes miles out of circulation via the high miles required , we'll see some positive changes on the REDEMPTION front.

Please opine.