American Airlines is once again a Citi transfer partner. That presents a valuable new use of those points, increases the attractiveness of AAdvantage, but also will likely accelerate the next American Airlines devaluation.

New Citi Partnership Likely Signals An American Airlines AAdvantage Devaluation Is Coming

I wrote the post below in June 2021, during a brief window amid the pandemic during which Citi allowed ThankYou points to be transferred into AAdvantage. Thankfully, I was wrong then: we did not see a massive devaluation of partner awards or the end of award charts. Amazingly there still has not been a devluation of partner awards four years later, though AA awards are priced dynamically and have risen in price recently. Even though I was about as wrong as Doug “Nostradamus” Parker saying AA would never lose money again, I’m still betting on a devaluation…like an earthquake in California, now we are more overude than ever.

Folks, I fear there is a huge American Airlines AAdvantage devaluation coming on the redemption side. It’s just a matter of when. Of course, that is true for all loyalty programs, but for American Airlines in particular. Those who have stewarded AAdvantage have explicitly said they cannot understand why passengers like award charts, praised dynamic pricing, and therefore all but promised American Airlines will devalue its miles.

That means I’d take advantage of certain sweet spots now, including:

• First Class to Japan on JAL – 80K miles one-way
• Business Class to East Asia on JAL or Cathay Pacific – 60-70K miles one-way
• Business Class to Africa via Doha on Qatar – 75K miles one-way

I do not expect these to last. I expect most prices will rise, some will go down (sort of like AA’s current Web Special awards), but savvy customers who enjoy redeeming their miles for premium cabins on partner airlines will find their points worth far less than they currently are.

Which leads us to what may accelerate this devaluation: American Airlines is now a Citi transfer partner.

Transfer Citi ThankYou Points To American Airlines AAdvtange

If you have the following Citi cards, you can now send your points to AA on a 1:1 basis:

• Strata Elite
• Strata Premier
• Prestige

The trial from June – November 2021 proved to be a success for Citi and AA. With Barclays no longer dueling for influence as a competitive AA co-branded credit card, will this be a permanent option? How many points will be transferred over? What kind of redemptions will be made? Should this overwhelm the system, AA could always pull it back and restrict the new transfer option by devaluing it or blocking it completely, though this time around, there is no talk of this being a “temporary” promotion.

AA will also doubtlessly be watching closely to see how the ability to make flexible Citi ThankYou points transferable to American Airlines impacts its own portfolio of credit cards. A real concern must be whether users will stop signing up or spending on AA co-branded credit cards if they can use a flexible card instead.

But at least for now, the ability to top off your AA account with Citi points marks the golden opportunity to book AA awards.

CONCLUSION

On the one hand, I am excited about the re-established Citi transfer option to American Airlines AAdvantage and the additional doors it will open. On the other hand, I am cognizant of the likelihood this move will accelerate a devaluation at American Airlines. If you are eyeing an award book now: not only is there now a lot more competition for those seats, but the price may soon rise…potentially without any notice. I don’t mean to be alarmist, but I don’t see this as ending well.