I received an interesting reader question after Alex posted about how Cathay Pacific’s First Class availability is scary good right now. The question centered on the current US Airways 100% bonus for purchased or gift miles and what to do with the miles pre and post-merger.
One thought is to wait to book awards after the US Airways Dividend Miles program merges with the American Airlines AAdvantage program. Imagine booking a First Class Cathay Pacific Award with US Airways miles. The challenge here is what if the programs don’t convert miles at a 1:1 ratio or what if the programs devalue immediately after the merger. No one can say for sure what will happen once the integration strategy and value drivers have been defined and implemented.
For this reason, one possible option is to hedge your airline award ticket booking bets and book awards now. Let us assume that you really want to book a OneWorld award in Cathay Pacific First Class. One option would be to top off your US Airways account by using the US Airways 100% bonus and then book a complex US Airways award. By complex I mean multiple segments with short layovers.
Why book a complicated award with multiple segments you ask? Because it may increase the likelihood of a schedule change.
Assume you book a US Airways award flight before the merger happens for a date of travel that is post-merger. This may give you a good position for two scenarios post-merger.
A Devaluation Or Unfavorable Conversion Rate Occurs
If a devaluation or unfavorable conversion rate occurs, you may simply hope for a schedule change on your complex award booking which may allow you to redeposit your miles.
But what if the schedule change never happens or the flight comes up before the merger occurs? Easy. Simply complete your existing US Airways award that was booked pre-merger.
A Devaluation Or Unfavorable Conversion Rate Doesn’t Occur
Same approach applies here. Hope for a schedule change. If one does occur, request that your miles be deposited back to your account so you can book your desired OneWorld award. If a schedule change doesn’t occur, evaluate the award change fee (if applicable) and change your flight or complete the booking as it exists.
Bottom Line
Carefully consider your options to use your American Airlines and US Airways miles pre and post merger. Things could look a lot different after the merger, or they could look about the same. But at least you’ll be prepared to maximize the value of your miles for flights that work for you.
What is your strategy to use US Airways Dividend Miles or American Airlines AAdvantage miles pre and post-merger?
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The Weekly Flyer writes about travel from a business traveler perspective. He travels the world every week accumulating points and miles along the way.
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From NY Times: “Mr. Parker said there would be a one-to-one transfer of miles (one Dividend mile will equal one AAdvantage mile)” Could still be devaluation though.
Hi Lee – Never say never 🙂
My sense is that they will do the same as when BA bought BMI – diamond club miles were converted into avios 1:1
The chances of the conversion not happening at 1:1 are very, very, very, very, very slim. Never say never in this game, but this is about as close as you can get to a sure thing.
Imagine how pissed flyers from US would be if their miles were transferred at a rate less than 1:1. The chance of it happening is zero.
while i agree 1:1 should stick, I like your idea of hedging an award this way. never underestimate how an idea could evolve into something else later.
I don’t understand this. Presumably if you canceled a ticket they’d redeposit the number of miles they originally deducted, not give you extra miles post-devaluation.
How far in advance can you purchase awards on cathay pacific. Say i wanted to use american miles and travel next june 10, 2014 when can I try and reserve?
I recently flew from SNA to MN on a United award ticket which put me through DCA to ORD. I was complaining to the US Airway employee at the ticket counter that I was being charged for the 1st bag even though I had a Case United Mileage Plus Explorer card. I confused who bought US Air and the ticket agent corrected me saying, Us Air bought American and we are not likely to be in the One World group in a few months; if so the connection with Cathay Pacific might be moot.