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Frequent flyer miles may not be worth the trouble

usa airline miles controversial changes delta guttings first-class hikes perks

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#1 Hum

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Posted 14 April 2014 - 20:28

Despite the fact that collecting coveted airline miles has never been easier, the frequent flyer game is only getting more difficult for the little man.

American Airlines (AAL) irked customers recently when it announced major changes to its frequent flyer program that would make reward miles less valuable.

Among the controversial changes, one-way domestic flights that once cost 25,000 miles are now broken up into three tiers (20,000 miles, 30,000 miles and a third level American hasn't quantified yet) for some loyalty members, depending on the time of year and destination demand. For example, a one-way domestic Thanksgiving flight might have cost 25,000 miles before and will now likely cost well over 30,000 miles. On the flipside, an off-peak flight could become slightly more affordable.

“What’s crazy about American is they didn’t give anybody any warning,” says George Hobica, founder of Airfarewatchdog.com. “People are pretty outraged.

There’s an entire forum on Flyertalk.com dedicated to travelers simultaenously venting and trying to decipher frequent flyer policy changes. American’s new award program rules are now applicable to all travel after June 1, even if you book in advance.

But American isn’t the first and certainly won’t be the last airline to devalue frequent flyer miles. In November, Delta (DAL) announced that in 2015 it would start awarding miles based on the price of a passenger’s ticket, rather than the distance of their flight. With the change, Delta followed in the footsteps of Virgin America, British Airways and Southwest Air.

If you fly Delta today, you could take a 2,000-mile trip from Atlanta to Los Angeles and have 2,000 miles in the bank to apply to your next airfare. But when the airline’s new rules take effect next year, the actual distance of the flight will mean nothing. If the ticket costs $400, you’re only getting 400 miles.

As of February, United Airlines revamped its frequent flyer program in what BoardingArea.com called “one of the worst guttings of a frequent flyer award chart” to date. The miles needed to buy first-class one-way tickets jumped as much as 86% higher in some cases.

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#2 -Razorfold

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Posted 14 April 2014 - 20:35

Part of it could be due to the rampant and frankly pathetic abuse of airline credit cards. A lot of them come with sign up bonuses like "50,000 miles when you use your card and spend $1000 in 3 months"

Those are awesome right? But here's the problem, tons and tons of people would sign up for the card...spend that $1000 and then leave the card sitting in a drawer until the end of time. They got their 50,000 miles and so they don't need that card anymore. Banks and Airlines didn't like this because they earn next to nothing from that card (most of them have 0% APR for 12 months or so) but they gave out 50k miles.

American Express used to have pretty nice Membership reward points sign up bonuses (with some going as high as 50k), but starting in April they changed that. Now the signup bonus is once per lifetime not once per card signup.
 

If you fly Delta today, you could take a 2,000-mile trip from Atlanta to Los Angeles and have 2,000 miles in the bank to apply to your next airfare. But when the airline’s new rules take effect next year, the actual distance of the flight will mean nothing. If the ticket costs $400, you’re only getting 400 miles.

Er no someone needs to do 2mins of research.

Miles are based upon your current status as well as the price of the ticket.

If you are a general member it's 5 miles for each dollar. So a ticket that costs $400 will give you 2000 miles.
Silver medallion it's 7 miles for each dollar. So $400 will give you 2800
Gold is 8 miles / $ etc etc

#3 Jason S.

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Posted 17 April 2014 - 18:19

I have over 150k United miles stored up w/ nowhere to go. Most of the time when i try to book a 'free' flight, either: 1. the routes suck or 2. the 1 leg costs 50k miles plus $125

 

on top of this, they claim that round trip flights start at 25k miles, but those only exist to fly from cleveland to like Chicago. that's a one hour flight.

 

that being said, when i did sign up for United's credit card, they gave me the 50k free miles, and i was able to use it w/ my wife for two round trip tickets to Colombia for free. that's savings of over $2k.



#4 -Razorfold

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Posted 20 April 2014 - 19:09

1 leg costs 50k miles plus $125


The extra $125 is usually due to Federal taxes and fees that the Airline usually passes onto you.

For example say I transfer membership reward points (AMEX) to Delta, theres a small federal fee involved that Amex has to pay. Amex will, of course, pass on that fee to me.

#5 +LogicalApex

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Posted 20 April 2014 - 19:47

Part of it could be due to the rampant and frankly pathetic abuse of airline credit cards. A lot of them come with sign up bonuses like "50,000 miles when you use your card and spend $1000 in 3 months"

Those are awesome right? But here's the problem, tons and tons of people would sign up for the card...spend that $1000 and then leave the card sitting in a drawer until the end of time. They got their 50,000 miles and so they don't need that card anymore. Banks and Airlines didn't like this because they earn next to nothing from that card (most of them have 0% APR for 12 months or so) but they gave out 50k miles.

American Express used to have pretty nice Membership reward points sign up bonuses (with some going as high as 50k), but starting in April they changed that. Now the signup bonus is once per lifetime not once per card signup.

This has nothing to do with it... The cost of "churning" is borne by the credit card issuer not the airline. The airline sells the miles to the credit card issuer at a certain rate and then the card issuer hopes to recoup that cost from winning the card member. This is no different than people who churn cashback cards who cash out only to leave the issuer or sock drawer the card.

 

The gutting of frequent flyer programs are the result of consolidation. The airlines have less competition and, as a result, less incentive to try and earn customer business. If this reality changes in the future then we'll see these programs return and get as liberal again. In certain markets, they are already feeling pressure. In the North East Corridor, for instance, Amtrak is taking large amounts of business from the airlines due in some part to the TSA and in others the skyrocketing price of air travel.



#6 Toki Toki

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Posted 20 April 2014 - 20:35

I have over 150k United miles stored up w/ nowhere to go. Most of the time when i try to book a 'free' flight, either: 1. the routes suck or 2. the 1 leg costs 50k miles plus $125

 

on top of this, they claim that round trip flights start at 25k miles, but those only exist to fly from cleveland to like Chicago. that's a one hour flight.

I don't know where you were looking to fly, but for domestic/Canadian flights with United Airlines, Saver Economy flights are 10k/12.5k and Standard Economy are 25k for each leg, with only a $2.50 9/11 security fee per USA airport. The saver economy flights exist for coast to coast flights (LAX, SFO, SAN to NYC for example) so you definitely can fly long distance round trip only 25k. Finding the tickets that match your schedule is another issue though.