European Economic Slowdown Affecting Our Ability to Redeem For International Awards

Less capacity is both a blessing and a curse.  Every time the airlines shrink capacity it gets harder to redeem awards, but it does mean they’re thinking about the bottom line and how to be sustainable (at least I like to believe so).

A number of airlines are reporting reductions in capacity this winter to cities like Rome.  Now, in and of itself, this isn’t earth-shattering news.  A city like Rome is a lot more fun during the spring and summer.  I can’t speak for United, US Airways or Delta, but AA has typically reduced service in the off-season in the past.

The difference now is (again) both good and bad.  Now that AA has a much stronger partnerships with British Airways (BA) and Iberia (IB), customers of AA have alternatives with these airlines in terms of redemption based on the tighter alliance between these 3 carriers since they started operating under a joint business agreement.  The downside to this for traveling on BA (which normally means any LHR routings) are hefty fuel surcharges on those awards.  Iberia does charge fuel surcharges as well, though at a much smaller level.  The BA product is better, but you’re likely to pay much more for it.

AA has been shrinking it’s international capacity quite a bit this year and I think there’s at least a decent chance they don’t bring back the full capacity next spring, relying more heavily on the joint business agreement to move passengers.  While that might not affect Rome service, it’s possible a route like JFK-MXP (Milan) that might end up being something served by IB or BA with connecting service, which would be a downer for EXPs trying to use systemwide upgrades.