Air rewards programs tilt to big spenders
Airlines are at it again, changing frequent-flier programs
Airlines continue to tinker with their frequent-flier programs, sometimes in ways that help business travelers but make it harder for occasional fliers to earn a free trip.
Frequent-flier programs started out simple: After flying enough trips or miles you earned a free flight, maybe to some exotic place. They built loyalty. But in the last few years, many airlines have changed their programs to reward high-spending customers.
“That’s going to come out of the hides of those travelers who are flying less frequently and flying on cheaper tickets,” says Tim Winship, editor of FrequentFlier.com. He says some travelers will need to ask themselves if it’s worth staying loyal to one airline just to earn miles.
Among the notable recent changes:
■United Airlines just changed MileagePlus program on Sunday to reward passengers based on spending. Elite-level frequent fliers will earn trips and upgrades even faster.
■Delta Air Lines, which shifted its SkyMiles program to a spending-based system in January, took away the charts showing the minimum number of points needed for various trips.
■Southwest Airlines, which went to a spending-based program in 2011, will change the number of points travelers need for some flights next month, but it’s not giving details.
“The airlines are getting a little bit brazen in watering down the programs and not even telling consumers how they will be affected,” says Brian Kelly, who writes about the programs as The Points Guy.
There are winners and losers in spending-based programs. At United, a passenger flying on the cheapest one-way fare from Los Angeles to New York used to earn the same miles as someone with a more expensive ticket.
Now, in one example from a United flight later this month, the bargain hunter who pays a base fare of $143.26 before taxes will score 716 miles while the traveler on a fully refundable ticket at a base fare of $971.16 before taxes gets 4,856 miles.
In the past, both received 2,475 miles — the distance between the two cities.
Delta upset some frequent fliers with its decision to remove award charts from its website. Experts say the change makes it harder for consumers to know upfront how far their miles will go.
With the charts, you knew that 60,000 miles for a round-trip ticket to Europe was a bargain, while 130,000 might be the price you had to pay in peak travel periods. Now it’s like going to the currency-exchange window at the airport and not knowing if you’re getting a fair rate for your dollars.
“It is indefensible. I was shocked,” Winship says. “Don’t (passengers) have the right to know going in what they can expect the range of award prices to be?”
Anthony Black, a spokesman for Delta, downplays the impact. He says that shopping for a reward flight will simply be like buying a regular ticket — plug in the days you want to travel and see how much it will cost.
Southwest gave little information to members of its Rapid Rewards program when it said it will change the price of some reward trips beginning April 17 “based on destination, time, day of travel, demand, fare class, and other factors.” A spokeswoman declined to say which flights would require more points or how many, saying that the airline can’t discuss pricing.
Summer Hull, who writes about family travel on her Mommy Points blog, thinks Southwest will raise the points-price on new international flights to Mexico and the Caribbean.
Changes that reduce the perceived value of the programs come as airlines face a huge liability for unused miles held by passengers — nearly $100 billion, according to PricewaterhouseCoopers. About 7 percent of all trips are taken using rewards, but with flights nearly full, it’s becoming harder for passengers to redeem their miles or points. That’s one reason that airlines are pushing passengers to redeem miles for other things, from flowers to cruises.
So what can customers do if they don’t like the changes? Those unhappy about Delta and United favoring big spenders could switch to American or Alaska Airlines, which still use miles as their currency. American, however, made its own concession to high-fare customers when it increased the miles earned with first-class and business-class seats in 2015.
Many business travelers will do better under spending-based programs.
But many occasional travelers will be losers. For them, “the smart move is simply to make your ticket purchases based on price, convenience, comfort,” Winship says, “and just let the frequent-flier chips fall where they may.”