Originally Posted by
imapilotaz
I understand what the OP is trying to argue. In the past accruing 300k RDMs for about $4k was easy. Today to get 300k RDMs would cost $27,200. So while before you could literally spend airline miles like funny money (and many, many people did), it would make sense to evaluate does it make sense at that XYZ redemption to use miles, or to pay cash. Before, outside of very minor instances it was almost always better to use miles (cash is king). How many of us were flying to Asia for $500 and then getting 35k RDMs for it? So spending 25k miles on a $300 ticket wasn't absurd.
Today, unless you MS the vast majority on here will earn fewer RDMs, which in a sense make the miles accrued "more valuable", since the ability to replenish our supply of them went up in price. So while "hoarding" makes no sense, the ability to easily earn 400k RDMs a year is gone for many of us, and so the willingness and ability to spend in large amounts diminishes.
In theory over the long haul, this should help increase the availability of awards as people earn fewer miles and ultimately use more than they are earning each year.
I think it's actually the inverse, each mile costs more to acquire therefore the value of each mile is shrunk. If a mile costs 1 cent to acquire, but you get 2 cents of redemption it's a good value. If that mile now costs 3 cents to acquire and you can only get the same 2 cents value out of it, it has become less valuable.
Basically AA realized that giving out miles to mileage runners was a loss on the balance sheet. Allowing someone to eat a non-profitable seat, and then turn that into further non-profit award seats harms the bottom line. AA ultimately will do what companies in capitalist economies do, attempt to maximize revenue and profits to reward shareholders and increase value. In the age of internet fares and lowered competition the days of courting customer and loyalty has little value. It's all about increasing profitability above all.
As businesses shift travel priorities to reducing or eliminating travel spend the airlines will only continue to push the envelope to make customers that were not profitable either profitable through fees and add-ons, or they will be happy to let them walk to a competitor.