I’ve written in the past about the general state of miles & points, and about how it’s the best of times, and the worst of times. Big picture, things are better than ever before when it comes to all the ways we can earn points, while they’re worse than ever before when it comes to the ability to efficiently redeem them.
All the time we see airlines devalue their award pricing, limit who can redeem for awards, etc. It’s super frustrating, of course, especially for those of us who still remember “the good old days.” The most recent thing we’ve seen is that Flying Blue has devalued award pricing, which is of course bad news.
I’m frustrated when I see negative program changes, but I’d also like to take a bigger picture look at what goes into these decisions. This is just a general reflection of what I’ve witnessed over the past couple of decades, and it’s also based on endless conversations I’ve had with program executives, etc.
In this post:
We all want great value redemptions using points!
To state the obvious, we all love when loyalty programs offer lots of premium cabin award seats at reasonable costs, both in terms of the number of points required, and the surcharges. Trust me, I’m 100% in that camp, and as someone who constantly looks at award availability and who is obsessed with getting good deals on redemptions, the changes over time have been really, really rough.
There are three things that complicate this even further:
- Travel loyalty programs have gone really mainstream, so demand is higher than it has ever been before; an increasing number of people are chasing a decreasing number of good value award seats
- We’ve seen increased automation with searching for award availability, so it’s no longer the person who studies the most who gets the best deal, but instead, it’s largely the person who sets the most award alerts, or whatever
- Loyalty programs have evolved from cost centers to absolutely massive profit centers, so the way they’ve been monetized has completely changed
The internal politics & math on points redemptions
Understandably, most of us don’t get a clear picture of the internal workings of airlines. Every airline is different in terms of its structure, who various executives report to, how close loyalty and revenue management work together, etc.
At many airlines, you have the loyalty and revenue management departments constantly going back and forth when it comes to mileage redemptions. Releasing award seats isn’t as easy as someone in revenue management just saying “oh, those seats will probably go out empty, let’s just make them available, no biggie.”
Nope, quite to the contrary, the loyalty program has to “pay” revenue management for each award seat. Obviously this is primarily an internal accounting exercise, and the calculations differ greatly depending on the airline. But you have two departments that are typically at odds with one another, since they have different metrics for success:
- Revenue management wants to show as much revenue for each flight as possible, as it’s all about the bottom line
- The loyalty program wants to offer value for members, show program growth, and of course good margins help as well etc.
Nowadays we see dynamic award pricing at many airlines, so the idea is that if there’s not saver award availability, members can spend a lot of points, but still get seats. In those cases, the loyalty program is often “paying” close to the going cost for a seat.
It’s common for loyalty programs to essentially take a “loss” on many kinds of award redemptions, especially for those that are a really good value.
This is one of the reasons that we’ve historically seen so many frequent flyer programs focus so heavily on getting members to book partner award space, where the reimbursement rates are often much lower. Take Aeroplan, for example — it’s an amazing program for partner airline award pricing (assuming you can find availability), while redemption rates for premium cabin Air Canada flights are typically pretty brutal.
What should loyalty programs actually prioritize?
In recent times, we’ve seen major structural changes to how airlines release award space. Just look at United MileagePlus, for example. In the past, United would release a ton of business class award space to partner frequent flyer programs. Now it’s available almost exclusively to MileagePlus members. Not only that, but those with a co-branded credit card and/or elite status get better pricing and availability.
It’s largely the same story with the Air France-KLM Flying Blue devaluation we just saw. Essentially the previous lowest award fares are becoming “Light” fares, and have fewer inclusions, but elite perks still apply. So as a Flying Blue Platinum member, not a whole lot changes for me. On top of that, Flying Blue Platinum members actually get extra award availability.
So as a Platinum member, I still consider the program to be pretty great. To be clear, I’m not trying to say “well this one change doesn’t impact me much, so screw everyone else.” Instead, I’m saying this because it reflects the trend we’re seeing, because airlines are going back to trying to reward actual loyalty, rather than treating everyone who earned a mile in one way or another equally.
Selfishly (looking across the industry), I absolutely hate this change. It makes it so much harder to redeem miles for a ticket involving travel on multiple airlines. I was kind of a pro at booking crazy Aeroplan tickets involving travel on half a dozen airlines, and that’s just not possible in the way it used to be. That makes me sad!
But am I surprised to see things going this direction? If an airline has one saver level award seat available, should the program take the approach of making it available to everyone at the same cost? Or should it try to prioritize rewarding a loyal customer over someone who just moved some points from a credit card program?
If you were running the program, what approach would you take? After all, it’s easier to justify giving someone an award seat at a loss if you can say “hey, but they applied for a credit card,” or “they flew with us X more times to earn status,” etc.
I don’t think there’s a right or wrong answer to any of this. However, I do think it’s worth discussing some of the nuance to all of this.
Bottom line
Frequent flyer program devaluations are no bueno. There’s an ever-increasing number of miles chasing an ever-decreasing number of saver level premium cabin award seats, and airlines are struggling with figuring out how to handle that.
In an ideal world, we’d all get unlimited saver level award seats at good pricing with our credit card points. But to state the obvious, the economics of that don’t actually check out. That’s why we’re seeing airlines increasingly add restrictions on which members get the best deals, whether those restrictions are around needing to have elite status, having a co-branded credit card, etc.
What I also think many people don’t realize is the complicated dynamics when it comes to award availability being released. It’s not as simple as a loyalty program just deciding, “hey, let’s open up those seats, they don’t cost us anything.” The loyalty program has to “pay” another department for those seats, and the program takes a loss on many of those seats, in the name of the greater good. In big corporations, people report to their bosses, and have to justify their results.
Again, I wish we had a ton of saver level award availability, and I hate when we see devaluations. But I also figure it makes sense to discuss the “why” of the changes we’re seeing, rather than just standing here with a pitchfork. As always, I’ll continue to chase the deals that are available, and those do change over time…
I don't know...I seem to have little trouble finding Business class tickets for transoceanic travel (US to Europe or Asia). I have no special powers, no special access that others don't have, and I don't use special apps or algorithms...unless it's to calculate 330 days out upon occasion (if I know that far in advance where I'm going). Here are three recent examples from this year:
-- SFO-MEX r/t for 2: 56k SkyMiles +...
I don't know...I seem to have little trouble finding Business class tickets for transoceanic travel (US to Europe or Asia). I have no special powers, no special access that others don't have, and I don't use special apps or algorithms...unless it's to calculate 330 days out upon occasion (if I know that far in advance where I'm going). Here are three recent examples from this year:
-- SFO-MEX r/t for 2: 56k SkyMiles + $71.40 vs. $1,176.82 = 2.1¢ value per point
-- JFK-FCO o/w for 2: 110k AS miles + $938.40 vs. $8,319.98 = 6.7¢ vpp
-- FCO-SFO o/w for 2: 220k Avios + $1,000 vs. $19,729.44 = 8.5¢ vpp
(Obviously the full price of the fare fluctuates, but these were the cash prices when I secured the tickets.)
I'm curious what the JFJ-FCO/FCO-SFO would have cost if booked as a single unit. $28k for a round-trip for two seems a hair steep.
A fair comparison would be with round trip prices, not OW
I think the answer is a bit like a well run casino - the casino is built on the losers, not the winners, but if *nobody* wins then folks stop playing.
Great analogy.
Lufthansa's Miles&More was probably one of the last major airline groups / FF Program to start selling miles. Then ofcourse the major devaluations allover the place.
I don't think it'll get better not unless maybe another pandemic or financial crisis comes along.
With the dynamic pricing i think that at the end of it all, using miles will save one at most 25% of the cash price of a ticket. Sadness.
Am retired, therefore I know my flight requirements the day the seats are released, I book BA,VS and KLM reward seats on day 1 of availability. So sorry that I might take a seat, but………
The problem now is no longer just the miles, it’s also the “airport taxes and fees.”
I'm Miles and More HON CIRCLE Status since 20 years.
I just bought 2 tickets for November with Lufthansa:
VCE–FRA–IAH
return DEN–FRA–VCE
166,000 Miles & More miles
€1,400 in taxes and fees
For EACH ticket.
ONE THOUSAND FOUR HUNDRED EURO per ticket!!!
The problem is that airlines have basically reached a point where there is very little...
The problem now is no longer just the miles, it’s also the “airport taxes and fees.”
I'm Miles and More HON CIRCLE Status since 20 years.
I just bought 2 tickets for November with Lufthansa:
VCE–FRA–IAH
return DEN–FRA–VCE
166,000 Miles & More miles
€1,400 in taxes and fees
For EACH ticket.
ONE THOUSAND FOUR HUNDRED EURO per ticket!!!
The problem is that airlines have basically reached a point where there is very little real competition between the alliances, they created a cartel.
You can “threaten” to move from one alliance to another, but they simply don’t care.
For every passenger moving from Star Alliance to SkyTeam, there is probably another one moving in the opposite direction.
Star Alliance, SkyTeam, oneworld… there is basically NO ESCAPE.
That's painful. Wouldn't it be better to just buy a Y or Y+ ticket and upgrade?
Agreed, but I'm always travel in C class. Having Upgrade in F is not alwasy available.
Agreed,
but I'm always travel in C class. Having Upgrade in F is not alwasy available.
Oh, so those were 2 F tickets (I thought they were business)! Still painful though...
yes, two business class tickets
Miles & more is really the bottom of the pack. But most loyalty programs are catching up. It’s a race to the bottom.
Yes, everyone is adapting because the end of all this has already been decided.
There’s no longer any reason to “reward” loyalty if there are no real competitors. Once all the leading airlines are aligned, you have no way out.
Eventually, the idea of getting free tickets with miles will become outdated.
And frankly, I would probably do the same if I were running my own company.
I was going to London recently and the business cabin (like the rest of the plane) was half empty. Wasn't the whole point of these programs to get revenue out seats that would otherwise go out empty? And now that's an ever better deal because if a guy gets two of those seats for 80k round trip he puts all his spending on the cobranded card and everyone wins. He tries to use his miles and it's 800k and he says / to hell with it I'll just use the cash back card.
“Or should it try to prioritize rewarding a loyal customer over someone who just moved some points from a credit card program?”
If they start to prioritize their most loyal members, at some point selling points to credit card companies should become less lucrative as card holders figure out amassing points is pointless
It's becoming pointless for sure. Unrelated to major programs, but the other day I was searching for a lifemiles award in early December (still low-ish season) and they wanted well over 100K for a J ticket on AV's own metal (which consists of a glorified Y seat that can't even pass as a good Y+) from Canada to northern south America. And I'm supposed to have access to better pricing on account of my elite...
It's becoming pointless for sure. Unrelated to major programs, but the other day I was searching for a lifemiles award in early December (still low-ish season) and they wanted well over 100K for a J ticket on AV's own metal (which consists of a glorified Y seat that can't even pass as a good Y+) from Canada to northern south America. And I'm supposed to have access to better pricing on account of my elite status (which is achieved by outright buying tickets). So, in my case, as much as I had luck in the past with LM and Aeroplan, I'm starting to reach the point of pointlessness. (I don't even make an effort with Aeroplan... Like, 200+K for a Y domestic ticket to Vancouver? No, thanks).
At what point are airlines killing the proverbial goose that lays the golden egg? Programs like M&M have become so bad that participating in it is largely pointless (pun intended).
Most other loyalty programs are headed in the same direction.
Honestly, I sort of understand FB making the move they did. You basically pay 15k for luggage, the ability to change, and lounge access. I also like that they made a tier where you can pay more points to reduce cash surcharges. That will appeal to the people that print points with small businesses and such.
I'm not loyal to an airline, so I don't think they owe me anything. I am willing to...
Honestly, I sort of understand FB making the move they did. You basically pay 15k for luggage, the ability to change, and lounge access. I also like that they made a tier where you can pay more points to reduce cash surcharges. That will appeal to the people that print points with small businesses and such.
I'm not loyal to an airline, so I don't think they owe me anything. I am willing to direct my spend places when I have incentives to do it. I think Flying Blue has this part right with their card relaunch. Remember: They also did a deal with Bilt for 3x points on rent (for a 3% fee), just like Alaska. You can build up to FB gold status and maintain it with 25k spend and a little flying -- that card isn't bad for everyday spend either. There's a pretty easy formula to give Americans good award access and that card is a direct competitor to Delta cards at lower price point.
Ultimately, airlines want to make this somewhat attractive without giving away the store. I'm lazy, so if it gets too hard, I'm out. But so far, the adjustments are mostly fair.
I just don't waste my time worrying about this. I play what games I can to maximize miles. Then, I use them when I can. I know that any "deal" I can get today will be gone in the next revaluation. I get free trips. They try to limit what I can get. Yes, both are real.
Oh—io, they ain’t ‘free’… (Admit it, you’re hooked. You lil’ points junkie, you…)
What is the problem?
3 words~ CREDIT CARD POINTS!
QED.
Airlines want revenue from banks. They get more revenue from co-brand cards than from selling miles to banks. But both are important sources of revenue. So FB and others all need to thread a bit of a needle - they need to keep dangling some attractive redemptions to keep folks playing the game while pushing folks towards co-brand card acquisition and spending.
That's what FB has done here. They launched a co-brand card to get...
Airlines want revenue from banks. They get more revenue from co-brand cards than from selling miles to banks. But both are important sources of revenue. So FB and others all need to thread a bit of a needle - they need to keep dangling some attractive redemptions to keep folks playing the game while pushing folks towards co-brand card acquisition and spending.
That's what FB has done here. They launched a co-brand card to get you on their status wheel. Hit a SUB and you're silver and on your first anniversary if you spend $25k on the card you're 20XP away from Gold. And then the following year spend another $25k and get 160XP of the 300XP needed for Platinum. (Unless of course you thread your own needle, get the card first, then status match to gold, and then hit the SUB and do the $25k spend so you'll get 260XP of the 300XP needed for FB Plat in year 1... not unattractive and FB obviously knows people are trying to do this- I'll be floored if they do not bring the status match back in the next month or two in time for year end "juicing revenue fun")
The real question is whether they've made the Silver / Gold benefits attractive enough to get on the ladder in the first place. Sure feels like the two things this community cares about (free changes/cancellations and more saver fares) are reserved for Platinum. And that's going to potentially disincentivize people from engaging with the program in the first place, especially folks from the US who know that Skyteam Elite Plus is not that great of an alliance status.
In my opinion, what they need to do is offer a little bit more of a sweetener once you get to Gold. Maybe if you are Gold and you have the credit card you get 2 free changes / cancellations a year. Something like that.
The revenue and loyalty departments can fight all they want, but at the end of the day, the ones that work together will end up delivering the most value for their companies.
With FB, specifically, I was under the impression that the whole reason to really go for Platinum was to be able to actually redeem points for La Premiere. Otherwise, why? Like, it’s not worth all that effort just so award tickets avoid a change fee.
As for the macro airline/points/banks situation, unless there are consumer protections like an EU261, in the US, airlines basically face little to no penalties for marketing, selling, collecting interest free...
With FB, specifically, I was under the impression that the whole reason to really go for Platinum was to be able to actually redeem points for La Premiere. Otherwise, why? Like, it’s not worth all that effort just so award tickets avoid a change fee.
As for the macro airline/points/banks situation, unless there are consumer protections like an EU261, in the US, airlines basically face little to no penalties for marketing, selling, collecting interest free loans from paying consumers (whether it be bank points or actual cash), then, on-the-day-of, they can cancel for any reason (profit margin wasn’t good enough, staffing issue, actually the weather, etc.) So, maybe, like, we in the US should finally pass an equivalent law, so, that, you know, actual duty of care and financial compensation for such games. (Kinda my whole thing. Glad you got more MCE coming, at least.)
I think the more valuable benefit of FB Platinum is increased award space being offered at the saver level. Not that I'd be opposed to an LP redemption of course.
If you're looking for a new one, how about this - why does the FDIC insurance scheme not cover points? Are points not essentially value that you have deposited at a bank?
Now we talkin'! I love me some FDIC protections, but sadly, they do not cover 'unsecured, promotional marketing benefits with no cash principal.' *sad face*
So, currently, our points technically have no fixed cash value... and issuers can legally devalue them or change redemption rules at any time... and, if a loyalty program or issuer fails, points are treated as unsecured consumer claims in bankruptcy court, ranking behind nearly all other creditors... *gulp*
So,...
Now we talkin'! I love me some FDIC protections, but sadly, they do not cover 'unsecured, promotional marketing benefits with no cash principal.' *sad face*
So, currently, our points technically have no fixed cash value... and issuers can legally devalue them or change redemption rules at any time... and, if a loyalty program or issuer fails, points are treated as unsecured consumer claims in bankruptcy court, ranking behind nearly all other creditors... *gulp*
So, I've been saying, maybe, perhaps, please consider, like, sorta, kinda, we should better regulate this... (uh oh, shucks, I'm again being told that any and all guardrails for anything are 'literal communism' dang it.)
Funny because the government from time to time has no issues with the banks providing you with a 1099-MISC for points that you received in a non-rebate manner (referral bonuses and such). And they usually value those points at 1 cent per point for those purposes. So they must be worth something... or more likely the government is just happy to take your money.
At least Chase gave us 2 years to spend our 1.5cpp...
Funny because the government from time to time has no issues with the banks providing you with a 1099-MISC for points that you received in a non-rebate manner (referral bonuses and such). And they usually value those points at 1 cent per point for those purposes. So they must be worth something... or more likely the government is just happy to take your money.
At least Chase gave us 2 years to spend our 1.5cpp CSR points? Of course naturally they didn't give you the choice which points to transfer out - shockingly the 1.5cpp points must be used first. Now that's what I call a points boost!
I just booked two business class seats on LOT from Warsaw to Toronto for a total of 150,000 Aeroplan points. I also booked a Vienna-Montreal business class ticket on Austrian for 85,000 points. The key though- and this may not be true for many people - is knowing six months ahead of time what flights you want.
And flying on a Tuesday in February
As one does… Tuesdays in the heart of winter are lovely in Poland.
Can we get airlines to do more SAS-style 1,000,000 giveaways but with status? I’d do the Jeb Brooks 24 hour US airline hub run or attempt to fly around the world hitting key alliance hubs back to back without repeating airlines (eg. OneWorld would require Dallas, Seattle, Sao Paolo(?), Tokyo, Sydney, Doha/Amman, Casablanca/Rabat, and London/Madrid; Star Alliance is pick a UA or AC hub, Frankfurt/Munich/Zurich, Johannesburg, Auckland, Tokyo, and Panama City; SkyTeam is Atlanta, Mexico...
Can we get airlines to do more SAS-style 1,000,000 giveaways but with status? I’d do the Jeb Brooks 24 hour US airline hub run or attempt to fly around the world hitting key alliance hubs back to back without repeating airlines (eg. OneWorld would require Dallas, Seattle, Sao Paolo(?), Tokyo, Sydney, Doha/Amman, Casablanca/Rabat, and London/Madrid; Star Alliance is pick a UA or AC hub, Frankfurt/Munich/Zurich, Johannesburg, Auckland, Tokyo, and Panama City; SkyTeam is Atlanta, Mexico City, Lima/Buenos Aires, Paris/Amsterdam, Nairobi, and Seoul) if it meant getting top tier alliance or airline status for a year.
Interesting idea though there are zero oneworld hubs to be found to the South of MIA unless you leave the Americas altogether!
I think that UA, DL and TK have some kind of status challenges available, though, a bit like everyone else nowadays, they seem to prioritise their own metal over alliance partnerships.
The apology for Flying blue terrible changes continue...
(This is a load of barnacles...)
To the people who say you can’t find good value anymore. Just today I booked iAd-mad 36k saver Econ plus a 400 premium plus upg. That’s a 1350 dollar ow ticket for 35k miles plus 400. Or 3cpp easy.
Business class iad to Europe is not hard on ual for 80k miles plus minimal taxes. Easily 2-2.5cpp.
You just need to do the work and be a bit flexible
That's actually a pretty bad deal considering that last week I booked IAD-MAD for 59k and $120, and with the 30% avios transfer bonus it actually cost about 45k points
There's still plenty of value to be had but you just need to scrutinise every transaction on its own merits.
Example 1: Iberia may want a four-figure sum for an one way ticket to MVD or whatever in Y, but you can find yourself in business class spending a handful of Avios and €600 through cash and miles.
Example 2: The prices of many/most revenue tickets within sub-Saharan Africa are borderline insane, I've...
There's still plenty of value to be had but you just need to scrutinise every transaction on its own merits.
Example 1: Iberia may want a four-figure sum for an one way ticket to MVD or whatever in Y, but you can find yourself in business class spending a handful of Avios and €600 through cash and miles.
Example 2: The prices of many/most revenue tickets within sub-Saharan Africa are borderline insane, I've gotten redemptions with a theoretical value corresponding to fewer than 12 miles to the dollar (8+ cpm).
Example 3: I've just made a redemption with SAS using 15k points for a short haul one-way Y ticket being sold for £350 (that's August in Europe for you!).
As with most hobbies, and even professions, critical thinking is important while knowledge and experience make things quicker and easier.
Agree with ChrisDD on < $3k redemptions (at least TATL), which almost excludes AFKLM after after today's devaluation. This prompts a question of transferable points value for Capital One and American Express. Are there any "mainstream" transfers that give good value?
Huge hassle finding awards, available dates, positioning, making an extra stop, taking airlines you wouldn't otherwise. Getting outsized values of >3 cpm are pretty much over; I'm getting to the point where I'd rather take a 1.4-1.7 cpm flat value.
Well, I hope you got lots of SkyMiles and a Delta credit card because that's pretty much their formula!
Gene, you still doing the ole Amex-Delta foursome? 2x Reserve, 2x Platinum, business/person, for the 10K MQD fast-track to Gold each year? Lots of AFs, but at least you’re SE+ without flying an inch.
Points are becoming the new Zimbabwe runaway inflation.....
Looking forward to my 100 trillion points notes, soon...
With today's FB devaluation, Aeroplan partner availability issues, and high fees/devaluations of Avios, do transferable points from AMEX and CapOne really retain their value, even at conservative 1.7c? Are there "mainstream" good value transfers, or is it now mostly "niche" ones?
British Airways is solid value because they release so much advance space, and their surcharges are bad but not beyond the pale.
Singapore Krisflyer also a lot of value if you want to go to Asia.
AC not as dependable as those two but still a lot of value. Last month I found 4 seats on the date I wanted to get back from Italy, PMO-ZRH-IAD in J for 75k apiece for next April.
It's...
British Airways is solid value because they release so much advance space, and their surcharges are bad but not beyond the pale.
Singapore Krisflyer also a lot of value if you want to go to Asia.
AC not as dependable as those two but still a lot of value. Last month I found 4 seats on the date I wanted to get back from Italy, PMO-ZRH-IAD in J for 75k apiece for next April.
It's not like it used to be (I'd rate the points at 1.5cpp not 1.7) but I keep playing/winning the game
BA are useless and overpriced, but there's still decent value to be found through Avios on IB.
Well you might find them overpriced but they're certainly not useless. They probably release the most space of any airline. And if you fly them ex-LHR the cost is much lower because they reduce some of their surcharges to account for the APD.
To wit: you want to fly from London to New York next June. You can fly in J for 88k avios, which you could do for 62k with the current transfer...
Well you might find them overpriced but they're certainly not useless. They probably release the most space of any airline. And if you fly them ex-LHR the cost is much lower because they reduce some of their surcharges to account for the APD.
To wit: you want to fly from London to New York next June. You can fly in J for 88k avios, which you could do for 62k with the current transfer bonus, plus $499. And there's availability on virtually every flight, every day.
United wants 200k if you don't have their credit card, and 72k if they do. Plus $428. So the marginal cost of BA is only $71. I'll pay $71 to have space for the whole family every day of the week.
That's cherry picking - I checked a random day in October and, together with their JV partner, they have an incredible 13 direct flights to New York (by comparison, they only have 3 to Frankfurt- when LH have 7 LHR rotations- and 8 to AMS which is only 40 minutes away).
As anyone who's ever tried to use a BA companion voucher to travel to S. Africa, Thailand, Australia etc will tell you, their...
That's cherry picking - I checked a random day in October and, together with their JV partner, they have an incredible 13 direct flights to New York (by comparison, they only have 3 to Frankfurt- when LH have 7 LHR rotations- and 8 to AMS which is only 40 minutes away).
As anyone who's ever tried to use a BA companion voucher to travel to S. Africa, Thailand, Australia etc will tell you, their award availability is pretty dire unless one calls at midnight when the schedule opens...and in any event, they're a mediocre airline based at a dreadful airport (and even within that, T5 isn't anywhere near as pleasant as T2).
Iberia, on the other hand, have been making real progress, particularly in terms of their premium products, and their awards are also priced more competitively.
I donno about you all, but I've personally never valued Amex MR more than what I could cash them out for via Schwab Platinum (previously 1.25, now 1.1 cents per point.) The only brands with more than 1 cents per point on average used to be Alaska and Hyatt, but they've been diminished recently, unless you're real lucky. Accor and jetBlue seem to be the only ones pegged to a near specific value. Clearly, reforms...
I donno about you all, but I've personally never valued Amex MR more than what I could cash them out for via Schwab Platinum (previously 1.25, now 1.1 cents per point.) The only brands with more than 1 cents per point on average used to be Alaska and Hyatt, but they've been diminished recently, unless you're real lucky. Accor and jetBlue seem to be the only ones pegged to a near specific value. Clearly, reforms (baseline regulation of these corporate pseudo currencies might be worth considering; oh, I'm now being told that any 'rules' to prevent further devaluations would be literal 'communism.' darn.)
Re British Airways rewards... I've been watching potential redemptions for flights between Italy & the US west coast during Nov and Dec. I have a bunch of BA Avios, but every routing I see also showing up via Aadvantage or Alaska Atmos points (on BA metal) will require over 2x the number of Avios for business class. Why is BA releasing award space to partners for redemptions for far fewer points?
Example: LAX/LHR/FCO business class,...
Re British Airways rewards... I've been watching potential redemptions for flights between Italy & the US west coast during Nov and Dec. I have a bunch of BA Avios, but every routing I see also showing up via Aadvantage or Alaska Atmos points (on BA metal) will require over 2x the number of Avios for business class. Why is BA releasing award space to partners for redemptions for far fewer points?
Example: LAX/LHR/FCO business class, same exact BA flights
57,500 Aadvantage
85,000 Atmos
121,000 Avios
@gstork BA, like most OW airlines, are wanting to charge you extra for the local connection. I believe that AS and AA have zonal pricing so you're not spending an extra 25k miles or whatever for the 90 minutes to/from LHR.
You left out the best part... the UK surcharges. (How many hundreds of dollars/pounds do you owe in addition to those points?)
It's all getting to be far more hassle than it's worth.
500k awards? No availablity at all for the better values? 27 credit, er, coupon cards?
I'm only still looking at this at all because I have so many points looking for a place to reasonably spend them. Sure I can take 50 4500 mile alaska awards, and that's a definitely a good value, but for the real stuff in international J/F it's just...
It's all getting to be far more hassle than it's worth.
500k awards? No availablity at all for the better values? 27 credit, er, coupon cards?
I'm only still looking at this at all because I have so many points looking for a place to reasonably spend them. Sure I can take 50 4500 mile alaska awards, and that's a definitely a good value, but for the real stuff in international J/F it's just absurd now.
I will blow my points (reasonably), but I'm not signing up for more cards or buying points (even at 1.1c). I am not going to spend more time searching for a value ticket that the time I will be on the actual trip. It's insane.
Wait till they hurt again and start begging us. It all goes in cycles. (ditto hotels, by the way, in fact I dropped them first)
This is supposed to be a somewhat fun hobby where you feel very good about getting a good redemption and regular good about getting an OK redemption. But we all know we're playing with casino chips. If it doesn't feel good for you anymore, cash them in and, well, use cash. Cash is king!
For clarification, was that a different Peter, or were you replying to yourself but had you just not logged in yet?
I'm probably part of the problem but I'll book transatlantic business class all day long at 140k points and get excited if its under 100k. I think expecting to continue to get that at 50k points is the same as trying to get gas for $1.50/gallon still.
So i think there is (or should be) something a bit more nuanced going on. Airlines sell the same premium seats to two types of customer. The first type are businesses and very rich leisure travellers who will drop $7k on a ticket without thinking. The second type are value hunters who won't spend more than $3k, max. Redemptions are aimed at that second category – people willing to jump through annoying hoops to spend...
So i think there is (or should be) something a bit more nuanced going on. Airlines sell the same premium seats to two types of customer. The first type are businesses and very rich leisure travellers who will drop $7k on a ticket without thinking. The second type are value hunters who won't spend more than $3k, max. Redemptions are aimed at that second category – people willing to jump through annoying hoops to spend (the equivalent of) $3k. This also explains why airlines are getting more brazen about selling miles directly – businesses and rich travellers won't mess around with that, but value-seekers will. The same segmentation applies to redemptions – people who earn miles disproportionately through expensive self-funded flights will redeem disproportionality for a (low) cash discount rather than messing with availability.
I'm not sure how aligned airlines are with the above "take", but it does feel pretty fundamental to loyalty programmes; otherwise you'd just make loyalty programmes be cash based. (Ok; maybe Delta isn't aligned!)
@ ChrisDD -- I think you're largely spot on, and I'd argue it's a lot more than two types of passengers, as it's amazing how many "funnels" they've created for getting into premium cabin seats.
I agree that this is pretty much the case. The other aspect is the whales, who have accumulated hundreds of thousands to millions of points just sitting in accounts. Largely from OPM. Those types of people also want to see some sort of "value" as well, but never see the 25k TATL in J deals for when they want to use them, so they don't use the miles. And when they do, it's usually going...
I agree that this is pretty much the case. The other aspect is the whales, who have accumulated hundreds of thousands to millions of points just sitting in accounts. Largely from OPM. Those types of people also want to see some sort of "value" as well, but never see the 25k TATL in J deals for when they want to use them, so they don't use the miles. And when they do, it's usually going to be a "bad" redemption, but then they have millions anyway.
The other big factor is just plain inflation. Just like $10 25 years ago got you x, 100k miles 25 years ago is different than what you get now. And when you flood the market with points (looking at you Hilton), it ends up working the same way.
This may feel like a don't shoot the messenger post, and it's not meant to be.
The volume of information about frequent flyer programs, credit cards and how to get best value in each of them out there has sort of turned the programs into a zero sum game due to the sheer volume of people engaged these days.
Back before the internet, and even when it was bulletin boards or niche forums, there were...
This may feel like a don't shoot the messenger post, and it's not meant to be.
The volume of information about frequent flyer programs, credit cards and how to get best value in each of them out there has sort of turned the programs into a zero sum game due to the sheer volume of people engaged these days.
Back before the internet, and even when it was bulletin boards or niche forums, there were many ways to find value and far fewer doing so.
Now, there are many websites, social media accounts and other sources who shout the information to anyone and everyone who is looking at travel due to algorithms and SEO on Google etc.
Airlines have improved too as technology has moved forward to utilise the volume of points issued and calculate the best way to minimise the cost of redemptions, even making money from them through taxes and fees.
How to play the game has changed, finding the value is just a bit harder.
It's quite a bit harder now!
Airlines and hotels are now killing the golden goose. They benefited by the exponential flow of points.
But as they keep devaluing their offerings, nickel and dining in every which way, they make their programs less and less attractive. It's getting to a point where people ate caring less and less.
Look at how involved people were a few years ago on social media on some of the forums and subreddits that promoted this hobby....
Airlines and hotels are now killing the golden goose. They benefited by the exponential flow of points.
But as they keep devaluing their offerings, nickel and dining in every which way, they make their programs less and less attractive. It's getting to a point where people ate caring less and less.
Look at how involved people were a few years ago on social media on some of the forums and subreddits that promoted this hobby. Lately many of those avenues barely have half the participation they used to have. As more and more people realize that this is a hobby with ever dwindling returns even more will walk away. It's just not worth the time and effort anymore.
@ BBT -- One would think that airlines would be killing the golden goose, but no airline earnings call I've heard reflects that. Just look at how co-brand revenue keeps going up for AA, DL, UA, etc., year over year. We might not like it, but unfortunately, it seems to be working?
The biggest devaluation I have felt recently has been the loss of LH F to partner awards, to the point of routinely now letting multiple seats go out empty. The same with what seems to be their blocking of partner I awards within 3 days which is likely the ultimate culprit. I understand making a program be the sole one with access to F theoretically makes it more enticing, but as ben and others all...
The biggest devaluation I have felt recently has been the loss of LH F to partner awards, to the point of routinely now letting multiple seats go out empty. The same with what seems to be their blocking of partner I awards within 3 days which is likely the ultimate culprit. I understand making a program be the sole one with access to F theoretically makes it more enticing, but as ben and others all have mentioned the surcharges and cancellation penalties are just insane and make miles & more a completely worthless program to any non-DACH based flyers in my mind. I get their ecosystem inherently is different what with the capping on credit card swipe fees and an inability to sell points directly like other airlines, but having access to F is not alone enough of a factor to ever make me really consider miles and more. I will miss aspirational redemptions but it does seem the move nowadays is to choose 1-2 carriers you are most loyal to, get mid to top tier status with them, get a credit card, and then enjoy preferential pricing and access to I level awards. United and FlyingBlue strike the best balance with this while AA and AS have maintained the value of their miles the most. No more F but at least if you do the above you can usually get where you want to go comfortable enough in I.
Mhm... “It was the age of wisdom, it was the age of foolishness...” Ben’s right, it’s feeling a bit Dickensian in 'the hobby' these days. 'It was the age of sign-up-bonus abundance, it was the age of stealth devaluations; the summer of record point balances, the autumn of ghost fares...' *sigh*
Yes, but a weak econony is allowing a certain airline to offer great deals on their newly-delivered A350-900s....
Annual income WB - 300k , annual expenditure - J flight - 299.6k. Result happiness.
@Lucky: Has there been any change with Flying Blue since Tiffany has taken it over?
(He just posted about major FB changes 10 hours ago.)
https://onemileatatime.com/news/flying-blue-award-pricing-changes-tiered-fares-devaluation/
@1990: Thanks. That was the only article I forgot to read.
(Yeah, the changes aren't necessarily 'great,' but there are some work-arounds, if you have status, say, to overcome the seat selection fees and lounge access issues with the new tiers.)
"Or should it try to prioritize rewarding a loyal customer over someone who just moved some points from a credit card program?"
But this is inherently in contradiction. Airlines are able to stay profitable and make tons of revenue because of selling miles to credit card programs.
If people stop using the co-brands or your program for transferrables, then you lose out in the long-term.
United seems to have understood the balance, having the credit...
"Or should it try to prioritize rewarding a loyal customer over someone who just moved some points from a credit card program?"
But this is inherently in contradiction. Airlines are able to stay profitable and make tons of revenue because of selling miles to credit card programs.
If people stop using the co-brands or your program for transferrables, then you lose out in the long-term.
United seems to have understood the balance, having the credit card offers preferential rates on redemptions and limiting partner access, maintained no cancel/change fees.
In contrast, Flying Blue has just spit in the face of its Silver and Gold members, on top of nickel and diming awards. Genuinely, making awards non-changeable/refundable is some of the most anti-consumer decisions you could make. This is as brutal as the Etihad situation with their change and cancellation fees, given you're paying 25% more miles just to have some flexibility and you still need to pay fees.
@ yoloswag420 -- I don't disagree with much of what you said, but I also think there's some nuance missing. There's a difference between an airline having a hugely profitable co-branded card and a very close partnership with a singe bank (like Amex with Delta and Chase with United), because that's worth billions of dollars to them, due to the closeness of the partnership.
That's different than Flying Blue having a single card in the...
@ yoloswag420 -- I don't disagree with much of what you said, but I also think there's some nuance missing. There's a difference between an airline having a hugely profitable co-branded card and a very close partnership with a singe bank (like Amex with Delta and Chase with United), because that's worth billions of dollars to them, due to the closeness of the partnership.
That's different than Flying Blue having a single card in the US issued by Bank of America, and then just casually partnering with all major transferable points currencies for points transfers. There's just not as much upside for Flying Blue as with one of the partnerships described above.
Flying Blue may not have as deep of a relationship in the US side, but they certainly have European co-branded cards.
Secondly, if the nature of transferable partners wasn't as big of a deal, then why are we increasingly seeing non 1:1 transfer deals being negotiated.
Cathay Pacific similarly only has one US card, but nerfed Amex down to 5:4, which means that the economics and upside of these generic transferable currencies is significant enough to act upon.
Flying Blue have officially said in annual reports and through Ben Lipsey that they're after the US transferrable points market. There's absolutely nothing casual about that, it's a core part of their business strategy.
As I suspected. I guess Ben is just running cover for Flying Blue/Tiffany.
It's worth noting he was invited to their new events for LP and such, so probably has to keep in their good graces.