TravelingForMiles.com may receive commission from card issuers. Some or all of the card offers that appear on TravelingForMiles.com are from advertisers and may impact how and where card products appear on the site. TravelingForMiles.com does not include all card companies or all available card offers.
Other links to products and travel providers on this website will earn Traveling For Miles a commission that helps contribute to the running of the site. Opinions, reviews, analyses & recommendations are the author’s alone and have not been reviewed, endorsed, or approved by any of these entities. Terms apply to all credit card welcome offers, earning rates and benefits and some credit card benefits will require enrollment. For more details please see the disclosures found at the bottom of every page.
A few years ago, there was a small window of time during which Citi ThankYou points could be transferred across to American Airlines in a 1:1 ratio and since then, we’ve been wondering if Citi would ever make a American Airlines a full-time transfer partner.
Well, the answer to that question started to drip feed out over the weekend when holders of the new Citi Strata Elite card were the first to see American Airlines as a 1:1 transfer option, and things moved quickly from there to the point where holders of the Citi Strata Premier card and the legacy Citi Prestige card can now transfer their point across to American Airlines in a 1:1 ratio as well.
Interestingly, reports appear to confirm that while holders of these three cards can transfer points across to American Airlines in a 1:1 ratio, there is no option for holders of any of the other Citi cards to do the same (not even at a worse transfer ratio).
The good
Up until now, American Airlines miles have been one of the harder currencies to collect in significant numbers if you weren’t interested in (or able to make the most of) the various welcome bonuses that Citi’s American Airlines credit card portfolio has been offering.
This was down to two key things:
- Until now and unlike most other major airlines, American Airlines has never been a full-time transfer partner with any of the major banks (Chase, Amex, Citi and Capital One).
- The American Airlines co-branded credit cards are not very generous with their spending category bonuses, so racking up miles through everyday credit card spending has been tough (and mostly unrewarding).
Citi making American Airlines a full-time transfer partner with a 1:1 transfer ratio changes all of that.
Citi ThankYou points are relatively easy to earn thanks to the good earning rates offered by the Citi Strata Premier card (which comes with an annual fee of just $95), so with the transfer ratio set at 1:1, Premier card holders can now, effectively, earn 3 American Airlines AAdvantage miles per dollar for spending made at grocery stores, at restaurants and at gas/EV stations as well as on airfare and hotel spending (includes airfare and hotels booked through travel agencies).
If a holder of the Citi Strata Premier card also holds the Citi Double Cash card, they will also be able to, effectively, earn 2 American Airlines AAdvantage miles per dollar on spending in all other categories.
What this means is that American Airlines AAdvantage miles have just become considerably easier to earn, and that will probably please quite a few people.
The bad
Partly because I’m rapidly developing into grumpy old man, and partly because I have some serious concerns about this news, I’m not happy with this development.
I’m not a fan of American Airlines and I’m not really a fan of the AAdvantage program, but I am a fan of some of the AAdvantage program’s better redemption options because they’re among the best in the miles and points world.
As things stand these are just some of the Business Class sweet spots in the AAdvantage Award chart:
- Middle East to/from Asia in Business Class: 40,000 Miles
- Europe to/from Middle East in Business Class: 42,500 Miles
- Europe to/from Indian Sub-Continent in Business Class: 42,500 Miles
- Hawaii to/from Europe in Business Class: 80,000 Miles
- Europe to/from South Pacific in Business Class: 85,000 Miles
And here are a few First Class sweet spots:
- Middle East to/from Asia in First Class: 50,000 Miles
- Europe to/from Middle East in First Class: 62,500 Miles
- Europe to/from Indian Sub-Continent in First Class: 62,500 Miles
- Europe to/from South Pacific in First Class: 115,000 Miles
Sure, some of these awards can be quite hard to find, but I’ve booked them all at one time or another and given the quality of the airlines you can book with these awards (Qatar Airlines, Etihad, JAL, Cathay Pacific, etc…), they represent superb value.
These award options have been around for a long time and while American Airlines has devalued just about every other aspect of its AAdvantage program in the past decade, these awards have remained untouched. But for how much longer?
I suspect (I can’t be sure), that one of the main reasons American Airlines hasn’t felt the need to bump up the cost of these awards is because it hasn’t been issuing AAdvantage Miles in the same numbers as a lot of other airlines have been issuing their currencies.
While it was only really possible to earn AAdvantage miles though co-branded credit card spending (which is weak), through co-branded credit card welcome offers (only so many of these you can keep getting), and though shopping portals, American Airlines was one of the most restricted airline currencies in the US miles and points game.
Building up significant AAdvantage balances took time and concerted effort.
Now, that’s no longer the case.
Not only will the newly updated Citi ThankYou/AAdvantage partnership ensure that a lot more AAdvantage miles will suddenly be created, but it will also ensure that a lot more people will now have access to AAdvantage miles even if they never set foot on an American Airlines aircraft and even if they never take out an AAdvantage co-branded credit card.
I cannot imagine a scenario in which tens of millions of new AAdvantage Miles are created and we don’t see a devaluation.
The more a currency is publicly available (created), the less that currency is worth and the more it costs to buy things with that currency. It’s called inflation, and this is what will lead to the last remaining sweets spots of the AAdvantage program disappearing forever.
I hope I’m wrong, but I don’t think I am, so it’s not a matter of if, but a matter of when this inflation will hit and the long run of great American Airlines partner redemptions finally ends.
Bottom line
The Citi/American Airlines partnership has evolved and American Airlines is now a Citi ThankYou Rewards transfer partner.
Holders of the Citi Strata Elite card, the Citi Strata Premier card, and the legacy Citi Prestige card can now all transfer their point across to American Airlines in a 1:1 ratio.
Some will herald this as a long-awaited great move while others, like me, will see this as the beginning of the end of the last great redemption options in the American Airlines award chart and, perhaps, eventually, even the end of the award charts themselves.
How do you feel about this development? Are you as happy as can be or as miserable about it as I am? 🙂
Your concerns are most likely valid. However, I have a bit of a different take. It’s hard to argue with the statement that AA miles have not been the easiest to get in meaningful amounts. And, as you note, there are lots of sweet spots to “mine”. My thought, however, goes as follows: Assume (prior to yesterday), I had to engage/invest X amount of effort/dollars to earn 25,000 AA miles and those miles would get me from Point A to Point B. Also assume that now the same amount of effort/dollars will generate 50,000 AA miles and those miles will only get me from Point A to Point B as well. In such cases, is anything different? Only time will tell the extent actuality varies from the example. I am hopeful (perhaps naively) that, now, 85-90% (or less) of my old effort/dollars will secure that A to B trip. If, in the future, the same amount of effort/dollars will not get me from A to B at all, AA fans will be losers, although the biggest loser might be AA with the inevitable reduction of flying customers.
That’s an interesting and valid argument. In your scenario, any miles earned going forward (“easy miles to earn”) wouldn’t really “suffer” for the reason you outline, but existing mileage balances (earned “the hard way”) would be considerably worse off (assuming a steep devaluation)
With AAdvantage being a US based program, I would actually think that many of the sweet spots you mention might not be devalued too much, since they don’t touch the continental US, and most members will not know of them or use them in significant volume. The 60k/80k in J/F to Japan, or 57.5k/85k to Europe, or 80k/110k to Australia, however, might very well go away.
I really hope that you’re right, but history tells us that devaluations aren’t usually route specific, so if the cost of flying on one route goes up, the cost of flying on most routes goes up.
Case in point, as much as Delta issues SkyPesos, there are still some solid redemptions on partner awards that don’t touch North America. Europe-Middle East is 42.5k in J, Europe-Asia is 80k, Europe-Australia 100k, East Asia-South East Asia at 40k, etc.
The devaluation has already happened. The partner award seats have disappeared and/or have been switched to dynamic pricing, over the past 2 years or so. The redemptions on Japan Airlines, British Airways, Etihad, Qatar, Fiji Airlines all got affected, in my experience. The domestic awards are not really advantageous either.
IIRC, American Airlines took a huge loan they guaranteed with Aadvantage, which, apparently, is the (only?) source of profit for AA.
AA follows in the footsteps of UAL and DL.