Are frequent flyer programs dying?

by Grant Martin on

With all of the recent cutbacks in the airline industry, frequent flyer programs are taking a beating. While passenger loyalty rewards are a great perk to air travel, any freebies given away by the carriers cut into the bottom line — a mark that has fallen under intense scrutiny over the last six months.

To mitigate some of the loss from award mileage and ticket redemptions, airlines are making it harder and more expensive to use to earn and use your miles. Just last month, Delta Airlines instituted a fuel surcharge for booking an award flight; now in addition to taxes that you pay for that ticket you’ll have to pony up up to fifty dollars for the privilege of booking it. Others, like American Airlines, are increasing the number of miles that you have to redeem for certain tickets and charging an additional fee to upgrade your seats into a higher class.

All of these changes are provoking industry analysts to worry about the future of frequent flier programs. George Hobica, founder of Airfarewatchdog.com, points out that some alternative reward credit cards are now more beneficial then keeping a miles card. Others, like Clark Howard point to the devaluing mile and wonder if it’s even worth accruing miles at all, saying “Don’t waste any effort chasing frequent flyer miles, which are like fool’s gold.”

Is the situation really this dire?For the casual traveler, it may be. Those of you who only fly once in a while and slowly earn miles up to a free ticket every five or ten years may see their award programs changed or their miles devalued from under their feet — such is the nature of business in a tight, evolving industry.

But for the acute traveler, there are many many reasons to still keep banking miles. Elite status, the key to getting upgrades, better seats and more miles is still a huge part of any mileage program and is still worth attaining. And there are still many uses for your miles — even if those avenues are harder to approach. Patience, timing and strategy play a critical role in making the correct award booking and with the right perspective it’s still possible — if not easy — to find award tickets.

If you want to bore down into the nitty gritty of making your miles work for you, here’s a tip: think about how much you travel and think about how much time you want to devote to working the system. If mile accrual is an every-so-often occurrence and you’re having a hard enough time finding a chance to cook dinner, you might want to relax, have a couple of bottles of wine and ask your neighborhood geek to look into your miles situation.

Alternatively, if you’re a 150k mile/year earner with some time at the airport lounge, orient yourself with Flyertalk, Airfarewatchdog and your local airline’s website. You’ll quickly learn how to best apply your miles.

Just don’t stop plugging your frequent flyer number into your reservations — trust me, it’s worth it.

Delta institutes fuel surcharges on award flights — who is next?

by Grant Martin on

One of the perks of having a frequent flyer number used to be earning enough miles for a free ticket. Free being a relative term, because we still had to pay some taxes. Domestically, this was about five dollars, while internationally this could be up to fifty or a hundred. No big deal, I always had a few empty cans to return.

Not any more on Delta. Citing fuel costs, the Atlanta-based airline is now going to charge a 25$ fuel surcharge for domestic award bookings and 50$ for international itineraries.

“But Grant,” you say, isn’t an award ticket supposed to be FREE?

Yeah, that’s what I thought too.

These sort of shenanigans are what we in the community call “devaluation of miles” and are indirectly a product of downsizing in the industry. Airlines want you to use fewer of miles, so they make them harder and more frustrating to spend. Fewer award tickets = more revenue tickets = more cash on hand.

Devaluation is another reason that many passengers in the Delta/Northwest merger are a little concerned. While both CEOs claim that our miles and status are secure, neither will profess to if they’re secure in value as well. Sure, you have 100,000 miles, but our new Deltwest airline charges 150,000 miles per award ticket. With a 200$ fuel surcharge.

Expect more of the same petty fees to show up across other carriers as they scramble to raise extra cash — my guess is that this will be picked up by the other legacies pretty quick.

Delta’s fuel surcharges go into effect August 15th, so book your award travel before then.

Why you should never buy frequent flyer miles

by Grant Martin on

Perusing your favorite airline’s frequent flyer web pages, you may have noticed that many of them offer a service to sell and transfer miles among friends. Points.com is a website that specializes in this task, and many programs from Jetblue to Delta to American Airlines participate in their miles purchasing programs.

Take heed before you get your wallet out and buy miles though: it’s a horrible horrible deal. Take a look a these prices for buying miles taken from the Northwest Airlines website:

2,500 = $95
25,000 = $725
30,000 = $865

Now, if you recall from your frequent flyer mile handbook, a domestic ticket costs 25,000 miles — so this basically equates to buying a ticket for $725. Any ticket, domestically in the US, whether this is between New York and San Francisco or New York and Detroit even if you’re having the worst day of your life, shouldn’t cost $725. And if it does, you can pretty well be sure that the flight isn’t going to have award availability either.

Similarly transferring miles is also expensive:

5,000 = $75
25,000 = $300

With a $25 transaction fee. And the airline isn’t even selling miles — it’s just moving them from column A to B in their spreadsheet.

Why would anyone take up this deal? Well, the least irresponsible excuse for buying or transferring miles is because you need to top up your account. You’re just short of that 25k or 50k award and need another 5k miles to book your ticket as soon as possible. But it’s important to remember the amount of cash you’re dumping into your miles just to make them work. If you’re dumping $100 dollars into a ticket to get it over 25k and your miles are valued at $0.02/mile (a common market ratio), you’ve just lost $600 in equity on a ticket. Was the market value of the itinerary that much? Could you have bought the ticket for $200 cash?

If you do find yourself in the above situation, try the following solution: take a deep breath, take your wallet out, hide it under the couch and take a good sharp look at your travel plans and finances for the next six months. There may be a time that you’re traveling in the near future during which you can accrue a few more miles and balance out that account.

Or you’re short on time and out of money, consider checking Gadlings guide to topping off your frequent flyer account.

Gadling’s guide to topping off your frequent flyer account

by Grant Martin on

After 17 long years of flying America’s skies, you’ve done it. You’ve almost saved up enough frequent flyer miles for a free ticket to anywhere you want to go in the United States. Nice work. Most people who remember to put their frequent flyer number into the box before departure forget about their miles and let them expire.

But you’re just a couple of miles short. And you really really want to go see Aunt Ximena in Palm Springs over Labor Day. Distressed, you check the airline website and see that you can buy two thousand miles for sixty bucks. And you’re so excited about In-n-Out and Aunt Ximena’s Uruguyan Barbeque that you’re just about to cough it up. But you shouldn’t.

Hold on fellow passenger! There are ways to accrue those miles without wasting money straight from your pocketbook. At the very least you can use your money practically and earn the miles on the side. Here are a few great ways to do that.

  • Check the website for promotions. Several carriers host small promos for new program members to indoctronate educate newbies on the advantages of their specific product. These change every so often, so it’s helpful to go back and make sure that you’ve qualified for all of your excitement.
  • Go shopping. Many airline programs have deals with an online (or in air) mall that let you purchase goods from a regular retailer (GAP, Home Depot, etc) and earn miles per each dollar spent. So if you needed to buy dog food for Fido or flowers for your mother anyway, you can get 5 miles / dollar online at petsmart or 10 miles / dollar at FTD.com. Not all of them mark up goods either — most gateways go directly to the vendor website.
  • Go out to eat. Sites like Dining for Miles let you enroll your favorite credit card or visa/MC debit card in a program that earns miles per dollar spent at a restaurant. You can peruse about to see if any of the restaurants are near you, then next time you’re out to lunch with co-workers, pick up the bill and take cash from everyone else.
  • Transfer miles from another program. Points.com gives you a pretty serious shaft when transferring miles among programs (I equate them to the TravelEx money exchange in the airport), but they’re good if you’re in a pinch and haven’t got a ton of spare cash. There are too many participants to list them all, so check the website and see if your favorite points program is listed.
  • Take some surveys. Several online sites let you accrue points by taking surveys that you can cash in for miles. E-rewards has worked well for me a few times, although I no longer have the time to take their somewhat elaborate surveys.
  • Get a credit card. This is a little more risk-involved, but if you were prepared to get some plastic anyway, it might be worth looking into a signature or platinum card that gives you 25k miles or a free ticket upon enrollment. You’ll have to pay an annual fee of course, but that should be significantly less than a round trip ticket.
  • Beg. Yes, airlines do give away coupons for free miles that do (illegally) get circulated around the internet. If you’re ready to live a life of sin, check ebay, flyertalk or your local craigslist for people giving away or selling miles. Don’t tell them I sent you though.
  • Go on a mileage run. I know it sounds crazy, but if you need a few extra miles, it may be cost effective to actually fly somewhere just to reap the miles from the trip. Check out Gadling’s Guide to Mileage Running for more info on that.

Finally, the best thing to remember is to be patient. Award availability does dry up pretty quickly and I’ll admit, if you’ve found an itinerary that works, you want to book it as soon as possible. But you don’t need to do anything brash to get tickets before the end of the day. Have some juice, think about your options and find a good workaround. Your miles and your pocketbook will thank you.

MSNBC’s Chris Elliot judges you and your Platinum Card

by Grant Martin on

One of our favorite airline columnists over at MSNBC.com and from Elliott.org published an interesting article today on the separation between coach and first class called “Frequent Criers: Elite Fliers are Ruining Air Travel”. In it, he points to the increasingly childlike behavior among top tier passengers that has recently been giving first class passengers a bad name — and asks whether this is a function of the passengers themselves or the airlines catering to an unbalanced class of service.

As an elite member myself, I have thought about this topic several times and part of it is true — Elliott points out a variety of instances in which first class passengers have acted unruly and entitled. But I don’t think that it’s limited exclusively to first class passengers — in fact, there are idiots in all classes of service and modes of transportation.

It doesn’t take much effort to be an obnoxious jerk when you’re in cramped quarters and have been traveling all day. In the same way that the taxi cuts you off when you’re merging into traffic or the guy on the stairs walks down the left side instead of the right side, some people just don’t make common courtesy a high priority. Yeah, it sucks. But it’s okay. They’re in the minority that think differently, but we’ll get over it and we’ll continue to do the nice, right thing.

There are good frequent fliers out there. I’m sure Chris Elliott flies all over the world and like myself and many frequent travelers on Gadling is professional and courteous. Don’t lose faith, fellow passenger — first and coach passengers are all stuck in this aluminum tube together. We can’t let articles like this tear us apart.