You Can Check Out Any Time You Like, But You Can Never Leave
With so many miles out there, the competition actually to redeem an award is fierce; folks who book flights way in advance (or who use double miles, as I noted in Airline Miles -- Useless? Part Two) seem to be able to make it happen, and folks who buy upgrades or magazines instead do okay (according to AA, after a domestic flight, the #2 use of award miles is a magazine subscription), but the average traveler finds it all but impossible to redeem miles. As a result, the same folks continue to rack up miles, but are far less likely to go out of their way (or pay more) to book on their program airline, or especially t o talk about things like "loyalty." In fact, the near-impossibility of redeeming award travel inside, say, a 10-day advance purchase, which is about when most travel purchases are made these days, has become a fairly serious public relations problem for the airlines.
Are there actually fewer free seats in play, or does it just seem that way because so many people with so many miles are scrambling for the same seats? According to The Economist, award travel accounted for about 9 percent of revenue passenger miles in 1999. In 2004, that number was down to 7.5 percent. The numbers tell the story. Add to that the sheer number of miles and account holders out there, and it is no wonder that it's tough to redeem your miles.
Follow the Money
So if travelers don't care much about loyalty in flight, and the public relations problems caused by the sheer competitiveness of redeeming an award is dragging on airlines already tarnished reputation, why keep them going?
I'll repeat a stat from above: the price credit card companies pay per mile to airlines ranges from 1 - 2 cents/mile. So every time you charge something to your credit card, the airline gets a percentage -- and they get it up front.
How To Use the Miles
I have found that the single most effective way actually to cash in miles, whether for award travel or more likely for upgrades, is to use a travel agent. Of course, since commissions have been reduced to pennies on the dollar, most travel agents now charge a fee for complex bookings of any kind; still, if you are traveling long distances, on complex itineraries, or are simply shut out of using miles when you call the awards desk, they may be able to cobble together a trip that actually works. And the travel agent doesn't get paid unless you purchase a ticket, so they are very motivated to find seats out of alternate airports, at slightly different times than you first request, and even on partner airlines.
I used this tactic on a trip to Japan last year -- I was facing 16 hours in the air each way, had heaps of idle frequent flier miles, yet no one at the airline could seem to make the twain meet -- and although it required one 4.5 hour layover, the agent booked me into mileage-upgraded seats for the entire trip. I learned that it was truly worth the effort (and $85 I paid the travel agent): each flight was almost a pleasant experience.
Find more tips for getting awards here -- scroll down to Tips for Getting Awards, natch.
As David Leonhart notes in the NY Times article linked above, the inspiration for American's groundbreaking frequent flier program was S&H Green Stamps - if you think about the last time you pasted green stamps into a book and drove off to a redemption center to pick your prize - heck, if you are even old enough to know what green stamps are - then you see the fate that frequent flier programs could be facing.
However, there's way too much in it for everyone involved for the programs simply to go away. The airlines are making too much money -- when United went into bankruptcy, the company said that the only piece of its business that was making money was the Mileage Plus program -- and travelers are still willing to rack up miles just in case they can get themselves a rare free seat or occasional upgrade - why not?
(As for expedited lines at security, as I wrote back in early 2002, it makes no sense to me whatsoever that someone with nothing more than an upgraded ticket should get preferential treatment when it comes to national security. At the time, several readers wrote in to say that, as frequent fliers, they were proven zero threat travelers, which is simply not true. It simply proves that they are frequent travelers. I will admit to having enjoyed the shorter and faster lines myself when traveling on upgraded tickets or as an elite-level program member, but that doesn't mean it felt right.)
So 25 years in, I take the programs for what they are -- marketing tactics only occasionally more useful than S&H green stamps -- enjoy the benefits when I can, and rarely worry about them otherwise. Except to say Happy Anniversary, Frequent Flier programs, been great to know you!
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The Independent Traveler