What the US Airways/American merger means for your miles

Many of our members are bracing themselves for the day the US Airways Dividend Miles and American Airlines AAdvantage programs merge next month. Dividend Miles has been a very popular program amongst our members, largely due to the ability to buy cheap miles to use in premium cabins on oneworld airlines. Next month, however, the program will cease to exist. All previously earned or purchased Dividend miles will be converted to AAdvantage miles at a rate of 1:1, before the programs officially merge and take on the rules of the AAdvantage program.

There were numerous advantages to the Dividend Miles program that our members are lamenting the loss of. Firstly, AAdvantage does not allow en-route stopovers, and has more restrictive rules regarding possible routings on flight redemptions. Secondly, their bonus mile promotions are often not as generous, and there is a limit to the number of miles that can be purchased each year. Thirdly, with just a few exceptions, redemption costs under AAdvantage will be higher.

Generally speaking, AAdvantage routing rules are more restrictive than US Dividend Miles. Flying between two non-adjacent regions in AA can only be done via a given set of regions, which is not defined on AA’s website (but has been documented on other FF websites). A major one of note is that flying between South West Pacific and Europe can only be achieved via some select Asian ports (Singapore, Bangkok, Tokyo, Hong Kong… possibly a couple more). You cannot route via the Middle East (well, you can, but you’ll pay for two awards rather than one).

Most prices in points will go up, only a few choice ones will go down. AA currently have a cap on the number of points annually that can be purchased.

While many will be mourning the loss of some of the quirks of the Dividend Miles program, there are some advantages to AAdvantage. American Airlines does offer one-way redemptions, making one-way travel and open jaw itineraries easier. Many redemptions can also be booked online, eliminating the need to call up. And although flights on some oneworld airlines still cannot be booked online, American Airlines did recently announce it would waive the phone booking fee for customers booking itineraries on these airlines.

Most importantly, there is still good value to be found. While not quite as good as the 100% bonus mile promotions US Airways offered in the past, American regularly offers up to a 40% bonus on purchased miles. And the cost of redeeming miles is not more expensive in all cases.

AA is cheaper than USDM to Asia, Middle East, Africa and South America. It’s the same cost to Europe albeit routing is more restrictive.

Business class travel within Australia and New Zealand is slightly more expensive under AAdvantage, but still extraordinary value on routes like Perth to Auckland.

Is still not that bad … cost of a return business fare within Oz /NZ will increase from 30k to 35k … compare that with the 32k (MEL/SYD), 72k (PER/SYD or BNE/AKL) & 96k (PER/AKL) points that Qantas frequent flyer would charge.

At least the changes aren’t a big surprise.

It’s been gunna happen for over 18 months … buy while you can has been the motto …

Following on from the merger, there is some concern that AAdvantage miles may eventually be devalued. American is yet to follow the lead of most major US airlines, who have recently devalued their frequent flyer programs significantly, and some fear it’s only a matter of time before American follows suit. Only time will tell…

Do you have a stockpile of Dividend miles? Will you be spending them frantically before the merger or waiting and seeing? Follow the discussion HERE.

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Matt Graham
The editor of Australian Frequent Flyer, Matt's passion for travel has taken him to over 60 countries… with the help of frequent flyer points, of course!
Matt's favourite destinations (so far) are Germany, Brazil, New Zealand & Kazakhstan. His interests include economics, aviation & foreign languages, and he has a soft spot for good food and red wine.

You can contact Matt at [email protected]