A few months back, American AAdvantage revealed intentions to implement cash and miles award redemptions soon. There’s an update now, as this feature will be launched in the upcoming weeks, and we have additional details on its functionality.
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Book flights using AAdvantage miles & cash
American is rolling out the option to book tickets using a mix of cash and miles. AAdvantage members will gradually see this new redemption choice made available in the following weeks, both via aa.com and American’s app. Initially, this is expected to be accessible for AAdvantage members with accounts based in the US, for domestic US flights on American, excluding Alaska and Hawaii.
Here’s how American outlines the process for booking with a combination of cash and AAdvantage miles:
1. After logging into the AAdvantage account, members will choose their desired flights with cash.
2. At checkout, members will receive an optional trip insurance offer.
3. Upon selecting their trip insurance, available cash and miles options will appear; members can manipulate a slider to choose the mix of cash and miles that best suits their desires.
4. After a selection is made, the cost summary will automatically refresh to reflect the selected combination.
5. Members can then input their payment details and finalize their booking.
Here’s how SVP of American AAdvantage, Scott Long, articulates this:
“At American, we’re continuously enhancing the AAdvantage program to provide more options and flexibility for our members. The introduction of cash and miles represents another step in our persistent endeavor to offer AAdvantage members more personalized methods to interact with the program and derive greater value from their membership.”
American AAdvantage is implementing cash and miles awards
Is this an effective use of American AAdvantage miles?
This AAdvantage miles and cash feature is being rolled out over the next few weeks, so it’s challenging to determine precisely what the value of redemptions will be. I inquired with American, but they weren’t inclined to disclose the specific value members would receive with this option, or if the rates would be set.
American did provide the screenshot below, yet it doesn’t clarify how much of the cash fare is substituted by the 11,100 AAdvantage miles being redeemed.
American AAdvantage cash and miles award
There is a history for such redemptions, so let’s address that, as I believe it’s not overly difficult to predict how this will unfold.
Examining the “big four” US airlines, Delta SkyMiles, Southwest Rapid Rewards, and United MileagePlus, all currently provide some form of cash and points redemptions. The main allure of these types of redemptions is that you can use a smaller amount of points toward the price of a ticket.
For instance, you might have 5,000 points in your account, which wouldn’t suffice for a full ticket, but could effectively reduce the cost of a ticket.
The drawback, unsurprisingly, is that the cent per point value for these types of redemptions is usually not exceptional. After all, the aim of these redemptions is to allow individuals to utilize their points with minimal hassle, rather than to offer the highest cent per point value.
As a general guideline, you’ll receive at most one cent per point with these types of redemptions, and in some instances, even considerably less value than that.
A significant question is whether we’ll see this somehow linked to co-branded American AAdvantage cards, perhaps with those possessing a co-branded credit card receiving a better redemption rate. There are no indications of this yet, and even if there is an improved redemption rate, I still doubt it’ll be particularly profitable.
Anticipate this to emphasize the convenience of using miles, rather than their value.
Bottom line
American AAdvantage is initiating the rollout of cash and miles redemptions, offering members a new avenue to redeem their miles. This is beginning to go live now, and should be accessible across accounts in the upcoming weeks. I’d view this more as a straightforward method to redeem miles, instead of a means to achieve exceptional value.
This will likely allow members to redeem a limited number of miles for a discount on a ticket, but I wouldn’t expect it to yield over a cent of value per mile.
What are your thoughts on American launching cash and miles redemptions?