American Airlines' new dynamic pricing system replaces traditional frequent flyer awards

AAdvantage, American Airlines' lucrative loyalty program, is getting rid of the traditional frequent flyer award chart, which was in place for many years to reward frequent flyers, as the airline moves towards dynamic pricing for mileage redemptions.

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Starting late on Wednesday, the carrier is expected to publish starting levels of how many frequent flyer miles are likely to be needed to redeem for a ticket in certain regions, such as 7,500 miles for a one-way ticket within the 48 contiguous U.S. states and Canada. It was previously shown that redemption levels were static on the chart, which is not accurate.

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As American announced at the end of December, it would get rid of its different redemption categories, including MileSAAver and AAnytime awards, which have mandatory minimum rates attached to them. The new redemption level will be called "Flight Awards" and the chart will be used as a reference tool to guide the redemption process.

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“These are going to float based on demand, just like cash tickets,” Chris Isaac, American Airlines' director of loyalty, said in an interview with flightglobal.com.

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In 2019, American Airlines introduced dynamic pricing for award tickets, which means that based on the supply and demand of a ticket, the number of miles needed to redeem it will fluctuate depending on the number of miles needed.

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"It has become the product that our members gravitate towards over the years," Isaac said. "The awards within that category were required to have the same number of miles or fewer miles than the awards set forth in the chart "up to 85% of the time over the past few years," American Airlines said in a statement.

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Depending on the time of year, award tickets can also vary depending on American Airlines and other airlines.

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In the high season, for example, a roundtrip ticket in standard economy costs 126,000 frequent flyer miles from New York to Rome between June 1 and June 8, and only 89,500 miles from Oct. 1 to Oct. 8 during the low-demand season between Sept. 1 and Sept. 8.

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"What I think is great about this is that it aligns the award chart with America's current standing. There is no longer any need to tell [travelers] that they will have to spend a certain number of miles to get a certain type of award ticket," said Henry Harteveldt, founder of Atmosphere Research Group, a consulting firm that specializes in the travel industry.