Jan 7, 2020, 1:43 pm
Last edit by: Prospero
Dynamic Award Pricing means award “prices” in miles will present with pricing dependent in accordance with supply and demand driven cash prices rather than by displaying static award prices on a published chart. Delta and United Airlines, among others, already offer dynamically priced awards, rather than pricing static miles costs on a chart.
Dynamic Award Pricing was initially introduced with multi-tier AAnytime awards, and expanded with the Economy Web Special awards listings added to the standard award display at the end of October, 2018 and fully operational in 2019. This means an award can price as a a lower than usual Economy Award Special or an AAnytime award as high as >400,000 miles for a one way longhaul award.
Links
Link to Economy Web Special" Award (dynamic price, fewer miles, more restrictions Oct 2018) (FT, 29 Oct 2019)
Link to AAnytime award dynamic tiers: higher costs coming to S Pac "late" Sep 2016 (AAnytime to SoPac can price at 375,000 J and 420,000 miles F.)
Link to Anytime / AAnytime award / awards [master thread] (Discusses three tiers and hidden fourth tier for AAnytime Award Pricing)
Articles:
link to American Airlines Dynamic Award Pricing is Here (Alongside Regular Awards) by Gary Leff on April 18, 2019
link to American Airlines Says Dynamically Pricing Awards is Coming by Gary Leff on May 30, 2019
Link to American Airlines Confirms That Dynamic Award Pricing Is Coming by Darren Murph May 30, 2019
Dynamic Award Pricing was initially introduced with multi-tier AAnytime awards, and expanded with the Economy Web Special awards listings added to the standard award display at the end of October, 2018 and fully operational in 2019. This means an award can price as a a lower than usual Economy Award Special or an AAnytime award as high as >400,000 miles for a one way longhaul award.
AA effectively moved toward dynamic pricing with the roll out of Economy Web Specials in October, with JT Genter noting the following: “The appearance of ‘discounted’ awards costing 9,500, 10,000, 10,500 and even 13,500 miles on a route where the standard rate is just 7,500 miles is quite concerning. Hopefully this is just a bug in the rollout, and not the first step toward a revenue-based redemption program like what we’ve seen Delta transition to over the past few years.” - JT Genter, quoted in TPG - link
(On 30 May 2018) Senior Vice President of Revenue Management Don Casey said dynamic pricing of awards is a strategy they’re using to drive higher revenue from the loyalty program. More mileage redemptions means recognizing more deferred revenue, and redemptions at a higher mileage price does too. = G. Leff, see below for link
“We’ve said publicly we’re adding dynamic awards called web specials. Because we’ve received positive customer feedback so far and we will continue to roll out web specials. Some of the coverage we’re seeing now is pure speculation – more web specials only mean more web specials for now. No decision has been made on anything beyond that. That said, we love when customers redeem miles. If TPG readers are thinking about a big, fancy trip, we hope they take it. We’d love to serve them soon.” AA to TPG, 30 May 2019 (link below)
Link to Economy Web Special" Award (dynamic price, fewer miles, more restrictions Oct 2018) (FT, 29 Oct 2019)
Link to AAnytime award dynamic tiers: higher costs coming to S Pac "late" Sep 2016 (AAnytime to SoPac can price at 375,000 J and 420,000 miles F.)
Link to Anytime / AAnytime award / awards [master thread] (Discusses three tiers and hidden fourth tier for AAnytime Award Pricing)
AAnytime awards
With no blackout dates, you can use AAnytime awards for any seat on an American Airlines or American Eagle® flight for as low as 20,000 miles each way, plus any applicable taxes and carrier-imposed fees.
AAnytime award levels vary by date (including time of day) and region. There are select dates that require a higher number of miles (in addition to Level 1 and 2 awards, there is a hidden level 3 based on aspirational value and premium product and even some hidden level 4 award space released on Flagship transcontinental flights). When you search for awards while booking, you’ll see the applicable available award level.
With no blackout dates, you can use AAnytime awards for any seat on an American Airlines or American Eagle® flight for as low as 20,000 miles each way, plus any applicable taxes and carrier-imposed fees.
AAnytime award levels vary by date (including time of day) and region. There are select dates that require a higher number of miles (in addition to Level 1 and 2 awards, there is a hidden level 3 based on aspirational value and premium product and even some hidden level 4 award space released on Flagship transcontinental flights). When you search for awards while booking, you’ll see the applicable available award level.
link to American Airlines Dynamic Award Pricing is Here (Alongside Regular Awards) by Gary Leff on April 18, 2019
link to American Airlines Says Dynamically Pricing Awards is Coming by Gary Leff on May 30, 2019
Link to American Airlines Confirms That Dynamic Award Pricing Is Coming by Darren Murph May 30, 2019
Dynamic AAdvantage Award / Drastically High Pricing (master thread)
May 30, 2019, 11:44 pm
#16
Suspended
Join Date: Dec 2009
Location: En Route
Programs: Many
Posts: 6,798
May 31, 2019, 4:21 am
#17
Join Date: Jun 2013
Location: Roswell, GA
Programs: AA EXP 2.8m,Lifetime PLT, Hilton Diamond, IHG PlLT, SPG Gold
Posts: 3,191
I have come across it already on the AA site when looking for certain mileage awards..did a lot of searches.. I think it was the awards to Asia..
May 31, 2019, 9:56 am
#18
Moderator: American AAdvantage
Join Date: May 2000
Location: NorCal - SMF area
Programs: AA LT Plat; HH LT Diamond, Maître-plongeur des Muccis
Posts: 62,948
What makes you think it’ll be that cheap? South Pacific awards have been as high as 375,000 miles one way Business and 420,000 one way First since September 2016. (Current chart cost are 40,000 Y, 80,000 J, 110,000 F for MileSAAver, to compare.) It might be that st times, but when demand is high, I’d expect higher costs.
May 31, 2019, 10:33 am
#19
Join Date: Mar 2016
Location: SAN
Programs: AA CK, Hyatt Globalist
Posts: 839
What makes you think it’ll be that cheap? South Pacific awards have been as high as 375,000 miles one way Business and 420,000 one way First since September 2016. (Current chart cost are 40,000 Y, 80,000 J, 110,000 F for MileSAAver, to compare.) It might be that st times, but when demand is high, I’d expect higher costs.
May 31, 2019, 11:31 am
#20
Join Date: Jan 2008
Posts: 464
What makes you think it’ll be that cheap? South Pacific awards have been as high as 375,000 miles one way Business and 420,000 one way First since September 2016. (Current chart cost are 40,000 Y, 80,000 J, 110,000 F for MileSAAver, to compare.) It might be that st times, but when demand is high, I’d expect higher costs.
May 31, 2019, 11:40 am
#21
Join Date: Mar 2015
Location: Austin, TX - AUS
Programs: AA Platinum, Hilton, Hyatt, IHG, Marriott
Posts: 1,625
Once DL and UA pulled their award charts, and moved to dynamic award pricing, it was only a matter of time until AA followed suit.
Don't see that happening. For every customer who leaves AA, there are others who leave DL or UA.
Don't see that happening. For every customer who leaves AA, there are others who leave DL or UA.
May 31, 2019, 11:47 am
#22
Join Date: Dec 2009
Location: Los Angeles& Telluride
Programs: UA1K, 1MM,AA Exec. Platinum, Global Entry, Nexus
Posts: 731
Its a game of the blind leading the blind. AA is following in the footsteps of the other legacy carriers. It amazes me that AA devoted flyers are always amazed at this. They have a poor business model. they made billions selling miles to credit card companies. We, the flyer, bought into accumulating miles hook line and sinker, more than the airlines ever imagined. Now that they realize that, they are redefining the terms of the game. So we all need to pivot and figure out what works best for us. For me, I use my miles to get tickets for kids. As always if it's important for me to ride up front, I am willing to pay for it. That allows me to look at these things and chuckle. AA will always have the last laugh. For those that leave to other carriers, they have their stink as well.
May 31, 2019, 11:50 am
#23
Join Date: Dec 2004
Posts: 5,629
Since AA does not have to release any awards at all, it is hard to complain about them releasing an award at a high price. Well, those of us who joined AAdvantage when awards were not capacity-controlled might be wistful for those days; but an award at any price is better than no award inventory (or at least, they are the same if you're not going to take the offer, i.e. it's not any worse).
As I understand it, flights go out rather full these days. If the economy slows down, hopefully there will be more availability at lower prices. This assumes, of course, that awards are released and priced rationally. Some airlines, such as QR, prefer to fly out with empty seats rather than release awards. AA might also put a low priority on releasing award inventory, or vastly overprice awards, just to be mean to its customers. That would be bad, but not surprising. But dynamic award pricing, in and of itself, is not necessarily something bad.
As I understand it, flights go out rather full these days. If the economy slows down, hopefully there will be more availability at lower prices. This assumes, of course, that awards are released and priced rationally. Some airlines, such as QR, prefer to fly out with empty seats rather than release awards. AA might also put a low priority on releasing award inventory, or vastly overprice awards, just to be mean to its customers. That would be bad, but not surprising. But dynamic award pricing, in and of itself, is not necessarily something bad.
Last edited by SeeBuyFly; May 31, 2019 at 12:04 pm
May 31, 2019, 12:15 pm
#25
Join Date: Nov 2013
Location: PHX, SEA
Programs: DL Silver, Avis President's Club, Hertz President's Circle, Global Entry (Former AA Plt/Gold)
Posts: 4,420
We get the fun double whammy of still having YQ when flying BA, so now instead of 55k pts + $450, it might be 105k+$450, or 200k+$450, etc. etc. "At least" Skypesos come with $5.50 taxes/surcharges.
May 31, 2019, 12:35 pm
#26
Join Date: Dec 2004
Posts: 5,629
All that is 'new' under so-called dynamic pricing is that saaver award pricing can vary. But not releasing any saaver awards, and pricing aanytime awards dynamically, is effectively the same thing.
May 31, 2019, 6:30 pm
#27
FlyerTalk Evangelist
Join Date: Dec 2002
Location: Danville, CA, USA;
Programs: UA 1MM, WN CP, Marriott LT Plat, Hilton Gold, IC Plat
Posts: 15,709
Not a shocker that AA is devaluing its program after UA/DL. But let's face it - for a long time now it has been better to accumulate transferable points from Chase/Amex/Citi etc rather than having miles locked into a single program. It will be interesting to see if bank customers are smart enough to grasp the effects of the devaluation and shift their business. The Amex experience with DL cardholders suggests that won't be the case. However at some point cash back cards start to look far more attractive, particularly if partner saver awards start to disappear.
Of course the real losers here are the elites who earn miles through actual flying. Those miles are effectively devalued, and your choices are limited in terms of other programs for crediting your flights. Plus you need to credit EQM to AA if you want to keep your elite perks. I don't fly AA much so not an issue for me. But I do plan to explore options for my UA flights.
At this point the only remaining US-based program that has not massively devalued (or is using a fixed conversion rate like WN or B6) is AS.
Of course the real losers here are the elites who earn miles through actual flying. Those miles are effectively devalued, and your choices are limited in terms of other programs for crediting your flights. Plus you need to credit EQM to AA if you want to keep your elite perks. I don't fly AA much so not an issue for me. But I do plan to explore options for my UA flights.
At this point the only remaining US-based program that has not massively devalued (or is using a fixed conversion rate like WN or B6) is AS.
May 31, 2019, 7:16 pm
#28
Join Date: Nov 2014
Posts: 255
There's no question that airlines should have been forced to honor the implications of their advertising, by making awards available at saaver levels on every flight. But that battle was lost a long time ago. Now awards are released only to fill seats that would go empty; and AA does not need to make saaver awards available in order to fill seats. That's how it is.
All that is 'new' under so-called dynamic pricing is that saaver award pricing can vary. But not releasing any saaver awards, and pricing aanytime awards dynamically, is effectively the same thing.
All that is 'new' under so-called dynamic pricing is that saaver award pricing can vary. But not releasing any saaver awards, and pricing aanytime awards dynamically, is effectively the same thing.
May 31, 2019, 7:24 pm
#29
Join Date: Aug 2005
Posts: 386
saunders111
May 31, 2019, 9:22 pm
#30
FlyerTalk Evangelist
Join Date: Apr 2001
Location: NYC
Posts: 27,220
Now clearly an intercontinental J trip that’s pricing at $8k rt would be 615k miles @1.3c (though in reality it’s probably a little less) which is probably more than 2x AA’s AAnytime. So definitely a devaluation.
Bottom line is that this is bad for those of us who hoard miles for int’l Premium cabins, but good for usage on domestic flights in coach. With a relatively fixed value, you don’t have to hunt around for arbitrage opportunities. That said, DL does have mileage “sales” on US-Europe from time to time, where availability is decent and prices are not terrible (I want to say as low as ~130k r/t but I can’t remember exactly).
