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Dynamic AAdvantage Award / Drastically High Pricing (master thread)

Dynamic AAdvantage Award / Drastically High Pricing (master thread)

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Old Feb 5, 20, 12:11 pm   -   Wikipost
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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.

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)
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)

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.
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






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Old May 30, 19, 6:13 pm
  #1  
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Dynamic AAdvantage Award / Drastically High Pricing (master thread)

per gary leff:



The@AmericanAir SVP Revenue Management Don Casey just said dynamic pricing of awards is coming while speaking at the Bernstein 35th Annual Strategic Decisions Conference.


need to dump all my aa miles from the barclays and citi cards.

Last edited by aztimm; May 30, 19 at 6:48 pm Reason: Rule 7: Linking to external content
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Old May 30, 19, 6:29 pm
  #2  
 
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Don't know that was a secret. Dynamic pricing on domestic awards may not be the worst thing in the world. If they leave the partner awards alone, it might work out ok. Of course, I tend to be an optimist .....

Safe Travels
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Old May 30, 19, 6:40 pm
  #3  
 
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If that happens to partner awards I am going to delta. Might as well fly an airline with a decent operation if the miles are going to be “worthless”
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Old May 30, 19, 6:45 pm
  #4  
 
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Meh I have mixed feelings. I'd much rather have Europe-US J availability 70k than no availability at 57.5k. Pick your poison I guess.
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Old May 30, 19, 6:51 pm
  #5  
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Old May 30, 19, 8:03 pm
  #6  
 
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Am hoping all these AA customers follow through & leave for Delta/UA, freeing up seats for the rest of us, driving down demand & allegedly dynamic prices
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Old May 31, 19, 12:44 am
  #7  
 
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Originally Posted by no1cub17 View Post
Meh I have mixed feelings. I'd much rather have Europe-US J availability 70k than no availability at 57.5k. Pick your poison I guess.
Instead you'll have no availability at 70k except BA flights with $900 in charges.
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Old May 31, 19, 5:21 am
  #8  
 
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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..
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Old May 31, 19, 10:56 am
  #9  
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Originally Posted by no1cub17 View Post
Meh I have mixed feelings. I'd much rather have Europe-US J availability 70k than no availability at 57.5k. Pick your poison I guess.
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.
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Old May 31, 19, 11:33 am
  #10  
 
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Originally Posted by JDiver View Post
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.
Exactly. One only need look at the DL award pricing to get a feel of the terrain.
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Old May 31, 19, 12:31 pm
  #11  
 
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Originally Posted by JDiver View Post
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.
I would hope for a happy medium between an award priced for last seat availability during peak travel season, versus virtually no availability whatsoever. Maybe something along the lines of "I" inventory for Biz awards. But, alas, I just don't see that coming.
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Old May 31, 19, 12:40 pm
  #12  
 
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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.

Originally Posted by joeyE View Post
Am hoping all these AA customers follow through & leave for Delta/UA, freeing up seats for the rest of us, driving down demand & allegedly dynamic prices
Don't see that happening. For every customer who leaves AA, there are others who leave DL or UA.
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Old May 31, 19, 12:47 pm
  #13  
 
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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.
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Old May 31, 19, 12:50 pm
  #14  
 
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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.

Last edited by SeeBuyFly; May 31, 19 at 1:04 pm
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Old May 31, 19, 12:56 pm
  #15  
 
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Originally Posted by SeeBuyFly View Post
... But dynamic award pricing, in and of itself, is not necessarily something bad.
if you havent tried to book anything with DL miles you may want to check on DL board before drawing such conclusion...
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