American Airlines is being evaluated.
The American Airlines miles were being posted from their Simply Miles promo yesterday. It was touch and go for a minute with miles showing up in the account and then disappearing a few hours later. There will be a lot of new millionaires out there in the coming days. I think one saying may be true, old money will not like the new money. At least when it comes to American Airlines millionaires. It has to lead to an American Airlines devaluation because you can't have a promo giving miles at 75% off and then just keep things as normal.
What does the future bring?
I would be a real millionaire if I could tell you that I wouldn't be here. When something is too good to be true, a hammer must fall somewhere. Logic doesn't always play a part in this case.
People used to sign up for Citi AAdvantage Executive World Elite cards at a rate of 100K a pop. The $450 annual fee was the reason why some were canceling them immediately after the 100K. It took a long time for that to happen. Maybe it was because Citi was eating some of that cost.
A few years later, the same thing happened with credit card mailers. American did not allow the mint to get off the ground. They took back their nest eggs after shutting down accounts.
There were two instances that were outside of the lines where the offer was posted. I don't think they can bring the claws out like they did last year, I think they have to be more nuanced.
What will happen this time?
American Airlines is in the red. Is this a money grab and then they cut the value of the program? The AAdvantage program is their most valuable asset, but they can devalue it with the program. Isn't it crazy how that works?
Think of the people who bought the most miles. You know the mileage brokers were jumping. They will be able to make a lot of money off those miles. Will American sit by and allow others to make a mint of their back?
American Airlines has not been afraid of the devaluation. They were thought of as the best airline loyalty program a few years ago. They seem to be in a hurry to get to Delta.
The final thoughts on the potential American Airlines Devaluation.
If I were a betting man, I would think that American would change something to make up for the new liability they have taken on. They may have had to honor the deal legally, not because they wanted to. There is nothing that can be done to stop them from getting even after the fact. Is it a loyalty program devaluation or a deep dive of accounts? Someone has to pay for those miles. The charity isn't going to be carrying the water this time, and there is no Citibank to help. Do you think American Airlines will take it on the chin? I know I don't.
What do you think the future holds? Is it a devaluation or a loss on the chin? Let me know in the comments.
Disclosure: CardRatings is a partner of Miles to Memories. Card issuers may give a commission to Miles to Memories and Card Ratings.
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The opinions, reviews, analyses, and recommendations are the author's alone and have not been reviewed, endorsed or approved by any of these entities.
