20 May Flying the Not So Friendly Skies
It’s become harder to both accumulate and cash in on frequent flier miles. But it’s not impossible—it just takes some work. Here are some tips on maximizing your miles and dollars.
Figuring out how to transform frequent flier miles into those elusive free tickets has long been a frustrating process. Travelers have had to sort through a tangle of blackout dates, limited availability, fuel surcharges, and increased fees for bookings. Given how hard it is to find a seat you want on the date and flight you’re after, it’s not surprising that frequent fliers worldwide are sitting on trillions of unused miles.
Recently, using your miles has gotten even more complicated. Previously, calculating your miles was straightforward: the more miles you flew, the more miles you earned. Not so anymore. In 2015, Delta and United will begin doling out five to 11 “miles” for every dollar passengers spend on airfare, depending on their reward status level. Delta’s changes went into effect on January 1, and United’s changes will take place on March 1. For example, last year, a $400 cross-country flight on Delta from New York’s John F. Kennedy International Airport to Los Angeles International Airport would have netted 4,950 miles based on distance flown. Now that same ticket will only earn nonelite status SkyMiles members 2,000 miles, based on dollars spent.
Other carriers, including Southwest Airlines, JetBlue Airways, and Virgin America, already use a points-per-dollar model for their reward programs. This leaves American Airlines as the only major US carrier that still bases its frequent flier miles and elite status tiers on actual miles flown. However, it too changed the award structure of its AAdvantage program this year, upping the redemption rates during peak travel seasons. Some analysts predict that American will begin linking ticket price to awards points after its merger with US Airways is fully ironed out.
That’s not the only way in which accruing and using mileage points have become more challenging. In 2014, United and Delta added minimum spending amounts to their elite status requirements. For example, United MileagePlus and Delta SkyMiles program members now must spend $2,500 annually and fly 25,000 qualifying miles (or 30 nonstop flights on Delta) to gain silver status, the lowest level. The top levels of the four-tiered systems require much more.
With frequent flier miles being devalued across the board, what should savvy travelers do to maximize their rewards? “Don’t hoard your miles,” says Hilary Stockton, founder of TravelSort, a luxury travel site and award-booking service that specializes in first and business class international travel and luxury hotel bookings with VIP perks. All frequent flier programs are subject to periodic devaluations. These changes often mean an increase in the number of miles or points required for awards. “For example, United devalued its award chart earlier this year, which increased the cost of some partner awards by 86 percent,” says Stockton. “Earn in the programs that best fit your travel goals, and steadily redeem them.”
Kathleen O’Connell, an agent for the international travel agency FROSCH, gives this advice to travelers: seek out the lowest available fare, regardless of frequent flier points. “Travel industry and nontravel industry valuation ranges anywhere from 2.8 cents per mile to as little as half of a cent per mile,” says O’Connell. “You then have to ask yourself how much cash you spent to reach a certain miles goal.Plainly put, frequent flier points should not be considered as a financial value, but as a peripheral bonus with very little value unless you reach the upper echelons of mileage accrual.”
To get the most out of the points you do have, put them toward upgrades and front-of-cabin airfare (premium economy, business, first), not economy class tickets. “On a points-to-dollar conversion assessment, these transactions yield the best value,” says O’Connell.
It’s this conversion rate that motivates Stockton and her clients to stay on top of their frequent flier miles. “We tend to redeem them for international first class and business class for flights that would otherwise cost as much as $25,000 or more,” she says. “That’s a nominal redemption value of 18 cents per mile, not to mention the joy of looking forward to a long, restful, and pleasant flight rather than dreading it.”
Mike Cargian, cofounder of UPGRD.com, a travel website and booking service for optimizing frequent flier miles, agrees.
“Always use your miles for international first or business class. One hundred
thousand American AAdvantage miles will get you a business class ticket to Europe, which often sells for $4,000 to $6,000. Contrast that with redeeming four 25,000-mile economy tickets within the US, which have a much smaller value of $200 to $400 per ticket.”
Go for status
Despite the addition of minimum spending amounts to elite status requirements, the benefit of reaching status is worth the chase for many fliers. “Points accrued toward actual awards [free tickets, merchandise, etc.] result in the lowest yield,” says O’Connell. “There is actually more value in gaining high-level status—baggage fees are waived, upgrades are awarded, and nontangible benefits, such as early boarding and eligibility for TSA precheck access, reap greater satisfaction.”
At the lowest elite level (usually earned for flying 25,000 miles per year), upgrades may be hard to come by, but, as Cargian points out, the other perks make flying much less stressful. “If you know you can board early and stow your bag, it makes the rest of the trip much easier.”
And, if your company is paying for business class or first class flights, you will be ahead of the game. “The elite ranks will thin at Delta and United since many fliers can’t meet the minimum spending requirements,” says Cargian. “So you will be part of a smaller group competing for upgrades in the following years.” That said, Cargian believes that the best elite status program right now is American Airlines’ AAdvantage program, since it is still based on how many miles you fly regardless of how much you spend.
New credit card bonus
By far the best way to earn frequent flier miles without flying—at least for United States residents with no high interest debt and excellent credit scores—is by applying for travel rewards credit cards that offer lucrative sign-up bonuses, says Stockton.
“The bonus miles that are awarded with a new credit card are higher than ever,” says Cargian. “The fiscally responsible traveler can take advantage of these card bonuses to travel in first and business class worldwide.” Many cards come with at least 40,000 points (enough for a free round-trip domestic flight) and occaisionally cards have bonuses up to 100,000 miles.
Cargian recommends staying away from a generic “points” card not associated with an airline. “Often points cards, like Capital One, simply offer you a rebate,” he says. “For example, 100,000 Capital One points will get you $1,000 off your next airfare. Whereas 100,000 American AAdvantage points will get you a business class ticket to Europe, which is conservatively valued at $4,000 or more.”
When to book
When should you book? The jury is still out. O’Connell and Stockton both recommend planning far in advance—a full year out, if possible, says Stockton. Airlines often hike up the price of last-minute tickets, even in mileage form. Cargian recommends the opposite: “The best deal is in the immediate few weeks before a flight, even the last week. Airlines often open up unsold inventory for award bookings in the week leading up to the flight.” Both are right some of the time. Frequent flier programs and fares are unpredictable, so check airfares often.
Be flexible with your dates and routes as well. “Awards are available most of the year if you are flexible on your dates, stopovers, and connecting cities,” says Cargian. If you’re traveling as a family, consider taking two separate flights to maximize your chance of finding award space. Frequent flier miles may be decreasing in value, but if you put in a little work, you can still make them go the distance. DW
Journalist April Kilcrease flies frequently, but she only obsesses about miles on RunKeeper.