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AAdvantage Account Shutdowns
December saw a slew of AAdvantage accounts locked, award flights cancelled, and subsequently a handful of passengers stranded. The main reason for this was the fact that the account holders had knowingly purchased and used generated mailer codes to get around Citi’s sign-up bonus restrictions on American Airlines credit cards.
What struck me though was that there were very few comments to the tune of “well damnit, they caught us…oh well” from those who engaged in the scheme, but many diatribes of self-justification as to why American Airlines OWED them the miles regardless of this obvious fraud. Personally, I passed on this scheme, but I don’t judge anyone who chose to engage. The justification from many of these individuals was that the mailer bypassed Citi’s restrictions, not AAs and thus it should be Citi shutting them down/reprimanding them as opposed to AA. That seems like a pretty lazy argument completely sidestepping the fact that the account holder engaged in what is at best a heavily dark gray-area scheme.
While this is now mostly behind us, I believe there are a couple of valuable take-aways. First, understand the risk certain behaviors in this hobby before acting. We all know that Chase is sensitive to cycling and Amex is sensitive to gift card purchases to hit SUBs. Thus, we avoid these behaviors or if we choose to act , we do so in a way that aligns with our level of risk tolerance. I’ve had my fair share of clawbacks and minor account shutdowns, but would never risk my larger, more important accounts. The second thought that somewhat nags me is whether or not AA laid this trap. Citi had been slowly closing loopholes in their application system, but this “hammer down” effort seems to be almost too perfect a way to snag those who chronically game the system. I have no proof of this and am certainly not trying to stir up anything, but we know the folks running these programs aren’t stupid, so it certainly begs the question. Regardless, understand the risk of your actions and always be ready to accept the consequences.
Hyatt Adds Properties for Award Stays, Changes WOH, and Rewards Globalists
Hyatt added 56 additional properties as part of its Small Luxury Hotels of the World partnership. This is obviously great news for members of World of Hyatt as the footprint of Hyatt is the programs largest deficiency. These 56 properties fall between category 3 and 8, costing from 12k to 40k points per night.
Marriott’s changes over the past two years have left a sour taste in customers’ mouths and when WOH announced program changes there were several aspects that sounded similar to the changes in the Bonvoy program. There is a bunch of good news though. First, free-night certificates will be tied to the hotel category, NOT point value, like Marriott. This means that even with peak pricing, a specific property will still honor the certificate. On the topic of peak pricing, unlike Marriott, individual hotels will not set these pricing dates, but it will be done centrally by Hyatt. So, don’t expect to see year-round peak pricing at certain high-demand properties, in the same way that certain Marriott hotels game the system.
For some Globalists members Christmas came a few weeks early this year as they were awarded complimentary Executive Platinum status with AA. This is no token award as there is major value to be had here. Perks of the status include complimentary upgrades, four systemwide upgrades, priority check-in and boarding, free checked bags, waived fees, Oneworld Emerald status, and more! If you were targeted, let us know and also let us know how you plan to use the status!
Two of my Favorite Tricks Vanish in 2020
So much of this hobby is exploiting favorable terms, finding ways to scale great deals, and crossing your fingers hoping that inevitable program changes don’t cut off your favorite plays. My luck has run out on two mini-plays that I always enjoyed. The first is Marriott removing the 10 night credit for booking your first meeting of the year. Up until a few years ago this was uncapped, meaning you could book 10 meetings and earn 100 nights. Then it changed to only allowing it on the first booked meeting of the year (which was reasonable), and now it is gone all together.
The value of Marriott status has continued to decline, but the ease of attaining it and the ability to get lifetime status made it at least partially compelling. While the ability to earn one elite night for every 20 rooms booked on a meeting contract still exists, that offer is far less compelling.
The more painful loss for me came from Plastiq. While still a fantastic service, offering the ability to pay any bill with a credit or debit card, as of January 1 Plastiq will no longer allow the use of prepaid debit cards. This had been a boon for me for years as I would load up on fee-free or fee-negative gift cards earning me 5x Chase Ultimate Reward points and then liquidate those cards paying my monthly bills such as mortgages, utilities, etc. With frequent promos and offers, it was fairly easy to get the Plastiq fees down to 1%, netting 4% profit if one only values URs at 1 penny each.
While the Marriott change is more of the same and stings a little, the Plastiq change is much more of a punch in the gut.
Boeing 737-MAX Updates
In mid-December Boeing announced that it would be suspending production of the 737-MAX production line in January. Up until now Boeing had been continuing production but with a backlog of roughly 400 orders and no where for them to go, Boeing had to shut of the spigot. Also of note is that it roughly the same number of planes will need to go back to Boeing to implement and test whatever fixes are deemed necessary.
Passengers won’t feel any impact from this new development, but there will be ripple effects in the airplane manufacturing industry as upstream suppliers and related vendors goods and services will not be needed until production resumes.
Southwest has extended its grounding of the 737-MAX and anticipates an April return as of now. We have seen similar grounding extensions from other US based carriers and the potential for further extensions is not out of the question.
New Qantas Partnerships, Edible Cups on Air New Zealand, LATAM’s new Codeshares, and Korean’s Awful Award Chart Changes
Qantas (a Oneworld airline) announced a partnership with Flying Blue, the frequent flyer program of Air France and KLM (SkyTeam). Qantas members will now have access to 60 new destinations and will earn Qantas points and tier benefits when when flying with Air France and KLM. There continue to be more of these cross-alliance partnerships and they open up the door for more interesting award bookings and indirectly increase the value of transferable points that partner with the affected airlines.
While it doesn’t provide for more award space like its Oceanic neighbor, Air New Zealand has rolled out edible coffee cups in its lounges and on its planes. Touting sustainability, Air New Zealand partnered with “twiice” to create these cups and estimate they will help prevent roughly 15 million cups from going to landfills each year. The cups have proven to be popular with customers and have also been used as dessert cups by twiice in other applications. I don’t know what the budget impact is of the switch will be, but I have to assume these cost significantly more than cheap plastic or styrofoam cups. Regardless, it is always great to see sustainable innovation in an industry that is known for the opposite.
As we discussed in prior posts, LATAM will be leaving Oneworld in October of 2020, but will begin codesharing with Delta early in 2020, dropping American Airlines at the same time. This is a major blow to the Oneworld route network of South America and conversely a major win for Delta. We are still waiting to see how Oneworld responds – while Star Alliance has been recently sniffing around various airlines in the region as well.
Korean Air used to be one of the best transfer partners Ultimate Rewards offered, but when that relationship was cut off back in 2018, many forgot about the carrier as other transfer options were less valuable. Despite this, the value of their redemptions were still great – with the ability to nab North America to Asia in first class for only 80,000 points.
In April of 2021, Korean will be moving to a distance-based chart which is a massive devaluation. While the economy redemptions on international routes will mostly decrease (64 will require fewer miles, 12 will remain the same, and 49 will increase mileage cost), the premium and first class charts are devalued significantly.
- A distance of 500-999 miles costs 37,500 miles
- A distance of 1,000-1,499 miles costs 45,000 miles
- A distance of 1,500-1,999 miles costs 52,500 miles
- A distance of 2,000-2,999 miles costs 67,500 miles
- A distance of 3,000-3,999 miles costs 82,000 miles
- A distance of 4,000-4,999 miles costs 97,500 miles
- A distance of 5,000-6,499 miles costs 120,000 miles
- A distance of 6,500-9,999 miles costs 135,000 miles
I always appreciate some heads up from a company regarding a change and the ~1.5 year heads is pretty good. So, if you were like me and pro-actively moved miles to Korean prior to the severing of ties with Chase, it would be wise to start coming up with a plan to use them!