This is a great offer by American
If you cant already tell, I'm a huge fan of this, both for American and for customers. It is not often that airlines actually offer good economy redemption deals, which is why most people end up saving their points to earn a large enough sum for business class. But these rates are not only reasonable but have great value, and are commonly available. Delta and United, which tie their awards to revenue, have average rates of around 12k for the domestic and 40k for the long haul.
Another reason this promotion is so great is because American isn't requiring customers to use large sums of points to seek great value. The average person may only travel maybe 2 times a year, which, as you know, will not give them enough points to purchase anything. Customers with lower budgets will now be able to use their AAdvantage miles.
Finally, for those who do have alot of miles and spend them regularly, you know any number under 20k is normally useless. And once we get into numbers under 10k, there is rarely ever any place to use them, even if you try. Now those points you thought were wortheless, can actually have some value.
For American this is a great business decision. It invites more customers to utilize miles that were previously useless. Pulling in customers of all demographics: heavy spenders, low spenders, and also customers who dont use AA as often. This could be the most important group. Frequent fliers who dont use AA as much as other airlines are more incentivized to take advatage of this promotion, which allows AA to make a play at their future loyalty.
Final Thoughts
Until May 28th, American Airlines is offering main cabin domestic award redemptions for 5k and transatlantic for 15k. These are great value, and I love how it makes it a lot more realistic for the average traveler to use their miles.
People (including myself) love chasing the 65k JAL business class awards, and other luxury redemptions, but for some customers they just don't have that many miles. This not only offers those customers a chance to redeem the miles, but also others who would normally let the small sum of miles go to waste. In turn, American gets more customers interacting within their AAdvantage program, and for every airline, loyalty=$$$.