I have been following this for a while and reading a lot of reports and I still don’t know what AA is thinking with these new moves. But, here we are at the end of 2019 and we have an airline shutting down accounts for credit card applications they feel violate their terms (airline shutting down accounts – not the card issuer) and that same airline is both making award rates go through the roof while also offering lower rates!
American Airlines Shutting Down Accounts and Raising Award Prices
American Airlines Shutting Down Accounts
When an airline, hotel, reward program goes on some kind of streak of shutting down accounts, clawing back miles/points, or similar, it can sometimes show us that they are trying to clear some of their awards off the books. Maybe they have some new partners coming to the table or maybe they have a new product and don’t want to lose a massive amount of money through customer acquisitions – hard to tell.
American Airlines has, for the last month or more, been systematically shutting down actual frequent flyer accounts of people they deem had violated their terms (remember, their terms and conditions always have some vague part that gives them cover when they feel like doing something like this). Apparently, it had something (largely due to this, at least) with members setting up multiple accounts and using mailers from AA credit cards (that bypassed the 48 month rule) to apply with the invitation and earn miles in their main accounts from that – in spite of the fact that they were not eligible under the 48 month rules).
In the past, we have seen banks claw back awards or shut down accounts due to activity/practices that they felt did not fit within their terms and conditions but this is the first time I have seen a US airline shut down multiple accounts in waves like this.
Tickets Being Cancelled
Possibly the worst part about these shutdowns is that people that were traveling on award tickets found that their return tickets were voided when these shutdowns occurred. Not only were they stranded but they were now facing having to get a new ticket with new miles from another airline account or paying cash – both costly measures.
If you have not tried to circumvent the credit card bonus rules, then you should not have anything to worry about. Most of us had likely not done anything worth shutting down accounts over – this is going to be mostly about those that were essentially minting miles through alternative methods of card applications.
Another Attempt to Fight Sales of Miles?
American Airlines has long been the most aggressive about auditing accounts of award tickets. AA miles have been popular with brokers (most likely since AA is the only major US airline that doesn’t have an award transfer partner from a bank) who will pay an AA member for their miles and then sell those miles as “business class tickets” to other travelers. AA will often check with that person at check-in to determine if they really know the person who paid for the ticket with miles. If they cannot show they have a relationship with the account holder, the ticket is voided.
It would appear that AA is trying to eliminate as much of this as possible and clear the decks of excess miles. Which makes the next part curious with the timing of it all…
American Airlines Raising Many Award Tickets
That brings us to the next thing that happened recently with AA – the implantation of Web Special tickets for premium class cabins and the somewhat obliteration of the award chart at the same time. I wrote last week about some awesome deals to/from Europe with AA in business class – as low as 84,000 miles roundtrip!
The downside is that those tickets are for extreme off-season travel. If you want to travel during the better season, you may find that the rates have gone up considerably from the Saver level amount of 115,000 miles roundtrip. While that happens for Anytime awards and other tiers, it is the Web Special pricing that has also gone whacky on this (since it is still giving a “discount” over the new, regular pricing).
This is a one-way flight from NYC to Paris in June!
This is how this will likely be playing out – AA premium awards will be loosely tied to revenue prices going forward. By this, we can expect cheaper business class awards during very low seasons and we will see the prices go way up during high seasons of travel or close-in booking timeframes.
Bottom Line
So, what is going on? If American Airlines was really worried about a ton of miles out there, I would totally expect them to hike award rates – like they did. That would seem like the “logical” airline way to get rid of the mileage amounts on their balance sheets.
But, at the same time, they are shutting down accounts that have accrued a lot of miles in a short amount of time. This is the first time they have done this and THEY are the ones doing it, not Citi. Remember the days when you could get a number of Citi Executive AAdvantage cards with the 100K mile bonus in a short time period? No award cost increases and no shutdowns.
So, what is AA doing? Any ideas? I understand going after people they feel violated the terms but it seems that there are quite a few shutdowns and not much in the way of warnings being issued. AA wants those miles back and those “earning” them to be out of their program. But, for the rest of us with AA accounts, we also have to pay these big prices now for awards that, not long ago, used to cost just 57,500 miles one way – instead of “Web Special” pricing at over 4 times that amount.
Citi and AA are in cahoots.
BofA and alaska did the same a few years ago. All these fycktards getting shutdown are locusts. They swarm something of value and leave it dead. They can’t effing take some and leave some for others.
The BOA/Alaska shutdowns were in response to people following the advice of a fairly prominent blogger who often wore a bow tie. The blogger instructed people how to get up to a half dozen Alaska cards on the same day with a single credit pull. BOA was a tad upset as a consequence and changed the rules thereafter.
All of that had come from Dans Deals who had told people not to publish that trick when they attended his seminar. It wasn’t just MMS and FM who published it – at least one other blogger (who I was actually surprised about) wrote about it as well.
While I don’t like that they closed it, I don’t have a problem with the changing of the rules. I just don’t like it when an entity makes changes with existing rules in place (when those changes go against what the rules state).
Since you mentioned the other two, any objection to saying who the third blogger is?
I can’t find the post I remember reading so I didn’t want to mention this blogger unless I could find it. That’s why I hadn’t mentioned it.
The final nail in the coffin was the BoA MLB card. Some got one from every team. And word got out on reddit.
https://www.reddit.com/r/churning/comments/52qr9q/541320_from_24_cards/
How about 435,000 miles LAS -LHR -CAI round trip in Oct 2020? I asked 3 times if that was the correct numbers of miles. Yes.
Insane!
@Christian, although I am no fan of the bow-tie guy, I believe it was the FM who opened 7 Alaska BofA accounts in 1 day. Regardless, it leaves the rest of us holding the bag.
FM did and blogged about it, but IIRC the bow-tie guy blogged about it first. I remember reading elsewhere (I just don’t remember where after all this time) that BOA specifically changed the rules as a result of the bow-tie guy. That information may have been wrong, but it seems plausible.
you’re late to this. Others have already reported all the accounts shut down were people creating aadvantage accounts for people that did not exist (their pets, etc) and using those signup bonus miles to book flights. Thats fraud pure and simple, and AA is well within their right to claw those back and shut down those burner accounts. I think i read a report on flyertalk where one person had 15 aadvantage accounts in associated with one address.
I am not “late” to this as I was not trying to be first in the shutdowns. I said I have been following it for a while and this post is a musing as to why AA is choosing this time to go after these accounts while also requiring so many more miles for awards that were much cheaper a couple of weeks ago. It would normally be one or the other.
I have no problem with AA shutting down accounts engaged in fraudulent behavior. I am glad that they are getting rid of those accounts that do things like that, but why the timing with when they also punish the rest of us with such high prices?
That’s not true at all – many of the shutdown accounts did not engage in creating fake AAdvantage accounts. It’s not just “burner accounts” being shut down.
I’m guessing they’re doing this because they are relatively sure you have no choice now. As we have allowed the airlines to merge down to basically just 3 major US carriers, your options are quite limited. With the other 2 both embracing dynamic award pricing AA has nothing to lose. Without more competition this trend will continue because they know they can get away with it.
This is why I have been using my Chase points for travel directly more and more lately. I will miss the great value of last minute bookings for sure! Also, at least we still have other (foreign) programs that have decent charts!
alot of people have been shut down who had received 15+ bonuses over the last two years and made many fake accounts. but what about the many who had NO fake accounts? and those, many of them received only 3 AA sign up bonuses in 2019, which is alot but not some isnanely excessive amount. there is a point where AA is being reasonable, and there is a point where they are over reaching, and frankly treading in murky legal waters
[…] made it apparent to me that the whole thing went bust is when American Airlines started canceling trips booked with AA miles based on a flimsy claim that multiple sign up bonus are considered “gaming”. They did […]
[…] Who needs RATs like the ones at Amex (RAT=Rewards Abuse Team) when American Airlines can go at it alone huh? What is American Airlines Thinking? Account Shutdowns Meet Sky-High Award Prices. […]
I didn’t create any fake AA accounts , buy any mailers, sell any mailers, or sell any miles ever, but I did open accounts that they said I could open and abided by the terms. Account shut down today and a high 6 figure mileage balance destroyed. This is ridiculous!!! Small claims court is looking good.