AA, US Airways merger: what it means if you

AA, US Airways merger: what it means if you

With American Airlines and US Airways merging their frequent flyer programs as of next year, what does this mean if you've bought miles on either airline to use for 'free' redemption flights on Oneworld partners such as Qantas, Cathay Pacific and British Airways?

Mileage balances held in US Airways' Dividend Miles scheme will be converted to American's AAdvantage miles on a 1:1 basis in the second quarter of next year.

Until then, you’re still free to redeem those miles through US Airways at the current US Airways award rates, while any existing miles sitting in your AA account aren’t affected by these changes.

If you’ve taken Australian Business Traveller’s advice to buy miles in previous months, but you’ve instead decided to save them for a rainy day, their value may actually increase once they’re moved across to AA.

That’s because the number of miles needed to book an award flight varies between the schemes, with AAdvantage commanding fewer miles than Dividend Miles on certain routes to book the same seat on the same flight.

Whether you’re looking to travel sooner or later, here’s what it means for your secret stash of US Airways Dividend Miles.

Redeeming miles for flights to Asia

When flying from Australia to destinations across Asia such as Singapore, Hong Kong, Shanghai and Tokyo, travellers need to fork out 90,000 Dividend Miles for a round-trip journey in business class, or 120,000 miles in first class.

On the other hand, it takes just 70,000 AAdvantage miles to make the same business class booking to most Asian destinations, and 90,000 AA miles in first class.

From the second quarter of next year, your existing balance – that may be enough to get you somewhere in business class – will instead get you to that same destination in first class where it’s available, such as on British Airways from Sydney to Singapore.

British Airways first class, Sydney-Singapore: 120k US miles, or 90k AA miles

The only exceptions are Japan and South Korea, where the 90,000/120,000-mile rates also apply in AAdvantage.

Redeeming miles for flights to the Middle East

Qantas flights from Sydney and Melbourne to Dubai, along with Qatar Airways’ services from Melbourne and Perth to Doha, will also need fewer miles to book following the changeover.

US Air currently commands 120,000 miles in business class and 150,000 miles in first class (where available) on a return journey, although AA charges just 90,000 miles in business class and 120,000 miles in first on the same flights.

Again, the number of miles needed to book a business class flight today will actually land you a first class sojourn on the Qantas A380 from next year.

Redeeming miles for flights to South Africa

Also winners of the shake-up are travellers heading to South Africa on Qantas’ Sydney-Johannesburg flights.

Round-trip business class costs dip from 130,000 to 100,000 miles once your balance resides with AA, while economy journeys enjoy a similar drop from 100,000 miles to 75,000 miles.

As is the trend, business class flights will be available from next year using the same number of miles that economy flights demand today.

Redeeming miles for flights to Europe, the Americas

London bound? There’s no difference between redeeming AA and US miles between Australia and Heathrow, although first class does increase by a mere 5,000 miles in each direction.

Rest easy: those business class flights to London won't cost more miles

Between home soil and American cities such as Los Angeles, Dallas/Fort Worth and New York, business class rises slightly from 110,000 to 125,000 miles, with first class moving from 140,000 under Dividend Miles to 145,000 miles under AAdvantage.

That said, these particular flights are usually in high commercial demand and have very few award seats available, so if a trip to the Land of the Free is on the horizon, book as soon as you can – firstly before the ‘cost’ increases, and secondly before your preferred award seat disappears.

The number of miles needed to fly between Australia and South America, such as on Qantas’ Sydney-Santiago flights or LAN’s Sydney-Auckland-Santiago services, is unchanged.

All things considered, the changes brought about by the merger of American Airlines AAdvantage and US Airways Dividend Miles are generally of great benefit to existing customers.

These travellers now have the confidence that their Dividend Miles balance won’t simply disappear – but will even become more valuable – when the airlines flick the switch in 2015.

More on AAdvantage and Dividend Miles:

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Chris Chamberlin
Chris Chamberlin is a senior journalist with Australian Business Traveller and lives by the motto that a journey of a thousand miles begins with a single step, a great latte, a theatre ticket and a glass of wine!
 

7 comments

  • RealKid

    RealKid

    3 Nov, 2014 11:28 am

    Another thing to note may be the additional partners which open up as US miles convert to AAdvantage miles. 

    While US Airways partners with Air NZ, Air China, Jet Airways, Hawaiian, and TAP Portugal, in practice it is difficult to book these awards as they cannot be combined with Oneworld partners.

    On AAdvantage, there is no such rule and you can combine the non-OneWorld partners and Oneworld partners (as well as AA and US flights) to your heart's content.

    In terms of flying to the middle east, AAdvantage also partners with Etihad, Gulf Air, and El Al.  Along with Royal Jordanian (OneWorld partner), you can ostensibly get to any Middle East destination on any airline that flies there except Emirates if you book with Aadvantage miles.

    Aadvantage also has an expanded partnership with Hawaiian compared to US Airways, as well as a partnership with Air Tahiti Nui (who fly to NZ) for South Pacific travel.  They also partner with Westjet for domestic travel within Canada and Alaksa for domestic travel in the US northwest.

    The only downside to the merger from Dividend Miles holder perspectives is that American Airlines has strict routing rules and does not allow stopovers.  For instance, you cannot book a ticket from Australia to Europe which transits in the Middle East (although I believe QF 1, QF 9, and some Qatar airways flights are excepted from this rule).

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  • jrfsp

    jrfsp

    3 Nov, 2014 01:02 pm

    From early next year, you will be able to merge accounts if you have both AAdvantage and Dividend miles....So it may be worth buying miles on both and combining them next year 

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  • TheRealBabushka

    TheRealBabushka

    3 Nov, 2014 01:33 pm

    Thanks AUSBT for writing articles about Aadvantage. It's important for Australia domiciled Oneworld fans and loyal customers to know there are options out there besides Qantas. 

    Come on BA Executive Club, get your act together! 

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  • gumshoe

    gumshoe

    3 Nov, 2014 04:53 pm

    Excellent article well done. Have been buying up US miles from various airlines for some time, nothing like a good J or F flight for so little money, and finding the award flights before calling to book is so much fun.

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  • eminere

    eminere

    3 Nov, 2014 01:36 pm

    I spy a beautiful GE90 engine.

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  • andrew84

    andrew84

    8 Nov, 2014 12:54 pm

    which is all well and good, until the award redemption chart changes undoubtedly will occur... 

    No member give thanks

  • Reg

    Reg

    9 Nov, 2014 12:09 pm

    I'm keen to see what availability of award flights is like under Oneworld. Star Alliance was particularly good between Australia and Europe, with Thai having plenty of First availability. There was an excellent search engine for Star Alliance Awards (beta.awardtravelr) - subsequently closed down due to lack of funding / external pressure). 

    The current bonus points being awarded under Dividend Miles are not as generous as previously - now 50k bonus with 80k purchase vs. 1 for 1 previously. Aadvantage allows max of 100k point purchases pa - Dividend miles had no limit.

    Good however to see where we will be scoring on the mileage charts! Our success with award seats in the past has relied on bookings close to a year in advance - worth it if you can get First / business with the buying power of the AA / USAirways points and low taxes & surcharges!

    Thanks for the article, Chris.

    No member give thanks

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22 Jul, 2019 06:25 pm

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