Why Airlines Are Releasing Fewer Last Minute Award Seats

Filed Under: Awards

In general the best time to redeem miles for maximum value is either way in advance (when the schedule first opens) or close to departure (when airlines have unsold seats that they’ll be unable to sell, so they make them available as awards). At least that’s how it used to work.

Over time things have changed at some airlines, and I wanted to address that trend in this post.

Some Airlines Have Stopped Releasing Last Minute Awards

It’s not true across the board, but there are definitely more airlines that aren’t making saver level first & business class award seats available last minute than in the past.

If you’re going to look at a loyalty program as a rewards program, then logically you’d think that airlines would love people who book award seats last minute:

  • The incremental cost of an additional passenger is very little when that seat otherwise wouldn’t be sold last minute
  • It gets the liability of miles off the book, and the member is happy for having gotten value from the loyalty program
  • This is much lower cost than someone who is redeeming a ticket in advance, and potentially displacing a paying customer

It just makes sense. With a rewards program, the company should love people redeeming rewards when it costs them the least.

Nonetheless we’ve seen some airlines and loyalty programs no longer release saver seats close to departure, even when cabins are wide open. Looking at US airlines, that’s most definitely true of American AAdvantage and Delta SkyMiles, though isn’t true of United MileagePlus.

To give a couple of examples, let’s look at Christmas Day flights from New York to Los Angeles on American. Several flights have at least seven of ten first class seats for sale, and the first flight of the day actually has zero people booked in first class.

Despite that, the next date with a single saver seat is over two weeks from now.

Those mostly empty first class cabins on Christmas Day? American wants 115,000-130,000 miles one-way, compared to the saver award cost of 50,000 miles.

Delta SkyMiles is no different. They used to have plenty of saver award availability last minute, but nowadays you can expect to pay among their highest award pricing last minute. For example, the New York to Frankfurt flight on December 25 is pretty wide open in business class, but they still want 320,000 miles one-way.

In both of these cases the cabins will likely be filled with employees non-revving, rather than people redeeming miles.

Then there’s Cathay Pacific, for example. Historically they’ve released a ton of last minute first class award space, but nowadays they no longer make those seats available to members of partner frequent flyer programs, but rather only make the seats available to members of their own Asia Miles program.

While some airlines are still making award seats available last minute, what’s leading to the general trend of some airlines no longer releasing last minute seats? It comes down to two factors:

A New Philosophy On Loyalty Programs

We’ve seen a fundamental shift in the way that many loyalty programs have been run, and this is no doubt something that has been spearheaded by Delta and their SkyMiles program.

For many airlines, loyalty programs are viewed as a revenue management function rather than a marketing function. We’ve seen Delta SkyMiles increasingly move towards a model where miles are a currency that can be redeemed at a nearly fixed value (around one cent per mile) towards just about anything, from tickets, to upgrades, to SkyClub access.

This no doubt makes SkyMiles easier to use for the average consumer, though it also limits the upside of the program, and how aspirational it can get.

If you’re going to start pegging miles to a certain dollar value when it comes to redemptions, then I suppose it’s also logical that the cost of a ticket with miles would follow a similar model to the cost of a ticket with cash.

If an international business class ticket would cost a lot of cash last minute, using that logic it would also make sense for the ticket to cost a lot of miles last minute.

Why do international business class tickets cost a lot last minute, even when the cabin is wide open? Because airlines assume people booking last minute have less elastic demand, so they can charge more. They’d rather sell one seat at $10,000 than four seats at $2,000, for example.

Predictability Leads To Revenue Loss

There’s no doubt an element of truth to this, and I think this is the part that airlines across the board have the hardest time managing.

Airlines obviously develop some sort of patterns with how they release award availability. The algorithms may be incredibly complex, but for the most part we can start to make sense of them, whether we’re talking about Lufthansa starting to make first class award seats available to partners about two weeks out, or Cathay Pacific historically making first class award seats available last minute.

Lufthansa makes plenty of first class award seats available within two weeks

Over time some airlines have become increasingly concerned that the predictability of award seats has caused revenue loss. On the most “legitimate” level, there are people who own small businesses, as well as leisure travelers who may be willing to otherwise pay for first and business class, who know that last minute they can usually snag award seats. This is totally legitimate, though I can also see how it could lead to revenue loss.

The much bigger issue involves mileage brokers/ticket consolidators taking advantage of these trends.

For example, I’ve heard stories of some mileage consolidators and ticket brokers who would book refundable tickets in advance to basically “sell out” the first class cabin on a flight, and then they’d cancel shortly before departure. Then those seats would open up as awards, and they could book their clients in them with miles. Obviously this is wrong on many levels.

I’m not sure the current status of this, but apparently back in the day there was one United route in particular where the airline completely changed up their algorithm for releasing award space, due to mileage brokers booking refundable seats, and then canceling last minute to book their clients awards.

United apparently had big issues with this on one route in particular

Bottom Line

There are still plenty of airlines that release first & business class award seats last minute, though in general I expect we’ll see a trend where we see less of this.

This is due to airlines loyalty programs moving towards more of a revenue based model, where loyalty program redemptions become more of a revenue management function.

This is also due to some of the perceived revenue loss airlines have experienced related to the predictability with which award seats have been made available. In some cases this has been totally legitimate, like people just catching on to patterns, while in other cases it has led to brokers booking refundable seats and then canceling them last minute, only to book their clients award seats and profit big.

Comments
  1. On Cathay, at least, over the last couple years I’ve been batting about 50% for op-ups from Premium Economy to J on SFO-HKG and HKG-SFO. Often I’m flying on a non-upgradeable PE fare. While I don’t fly on AA much anymore, I’m lifetime Plat and travel on that status with Cathay. Cathay not releasing that award inventory to partner elites may not be working out entirely badly for partner elites 😉

  2. When the revenue from miles selling plummets, the will see the beans aren’t all as they counted.

    Admittedly, Delta’s revenue from selling to banks seems more impervious. But I think a lot of the bigger spenders will be leaving American/Citi.

  3. A slightly oblique question but have BA stopped offering First Class through Alaska? I used to see plenty of seats on some routes, but now can see none ….

  4. Thanks for the insight. Several years ago, it was a no brainer to redeem miles for tickets at short notice. TWA used to have a free first class ticket and an additional upgrade from coach to first class for 50.000 miles from the US to Europe. If you were a bit flexible with your destination, there was always something available last minute.
    I never thought about those ticket brokers blocking the seats for their own customers. That’s really so bad. No wonder, the airlines had to get creative…

  5. Lucky,

    I just do not know that this applies preponderance of travelers. Indeed, I might decide I am going to go on vacation during the first two weeks of February, or some other time, knowing what is likely to open up on, perhaps Cathay. I keep myself flexible as to destination and also keep my expectations in line – things might not work out at all and I will still consider myself fortunate.

    I think travelers like me are an anomoly. First, many millions of miles have to be held by people who have no clue about histroical trends that they can game. And many travelers – particularly business travelers – just do not have my risk tolerances.

    Brokers surely alter the equation here – they control millions of miles and have the capacity to monitor trends and know what is predictable. Their behaviors may drive killing the goose that lays the golden egg.

  6. Lucky,

    So. Are you under the impression that the “miles & points” hobby has become more mainstream? Has it become so big that programs are more afraid of award inventories cannibalizing the sale of cash tickets?

    And this is the first time I hear about mileage brokers. Is this really a thing that matters quantitatively? And can they do something for business customers? My (possible naive) assumption would be that market segmentation between cash and award tickets works fairly well when it comes to business customers.
    My thinking is that it’s just very hard to purchase award tickets as a business when you think about difficulties with accounting as well as with billing of clients.

  7. “There are still plenty of airlines that release first & business class award seats last minute, though in general I expect we’ll see a trend where we see less of this.”

    @Lucky so can we get a separate blog post that discusses the current list of airlines where you are aware of certain trends?

    Also, is CX still good for releasing J seats last minute or have they cracked down on that cabin as well?

  8. @ HoKo — Let me see what I can do! Cathay does still release some saver seats to partners in business class last minute, but typically it heavily uses married segment logic.

  9. @ John — For sure it has become more mainstream. Rewards credit cards are more popular than ever before, and in general there has been a lot of media attention on miles & points. And yes, mileage brokers are a HUGE problem for airlines. This isn’t just a few people, but it’s a huge underground industry probably worth hundreds of millions of dollars globally, collectively. Some mileage brokers have done some really shady things, and that’s why it has become such a problem.

  10. @ chris — That certainly eliminates some of the value for last minute economy tickets, but when we’re talking about first & business class tickets that would cost thousands of dollars, $75 is a small amount to pay.

  11. @ Max Johnson — That would be news to me. I think British Airways in general has just become stingier with first class awards.

  12. I think part of it is a correlation vs causation problem. I agree with your observation that award availability has decreased. Of course, one explanation might be the loyalty program strategy.

    But there might be other explanations. Firstly, load levels are generally quite high today. So fewer seats get unsold, in particular in J. And F has been abolished by many airlines, at least on some routes.

    Then, they have also developed other strategies to sell spare premium seats, such as upsell against money. Which might be more lucrative …

  13. There is often a fallacy with these types of posts the blogosphere… “airlines are releasing fewer last minute award seats.”

    Wrong.

    You can redeem for an award seat on those flights close-in, just like you can farther in advance. It is the “saver” price level that you are referring to, not the ability to redeem an award seat. In a world with more and more dynamic pricing, the concept of a “saver” award becomes less and less relevant.

  14. @ DiscoPapa — I wouldn’t say it’s a fallacy at all. I used the word “saver” five times in the post to make it clear what I’m talking about. As far as the title goes, as I’m sure you can appreciate, there’s benefit to keeping titles as short as possible (both for SEO, and just for making the blog easy to read). So titles are never going to fully clarify the complexity of an issue like this.

    The concept of saver award space is becoming less relevant only for those who aren’t looking to maximize value. Delta continues to have saver level “award” buckets that are bookable through partners, just as American does. Those looking to maximize value — presumably a majority of the people reading this blog — *do* care about saver award space.

  15. let’s just advance a few years and get on with a mile being worth a penny. make it easy to redeem at a penny valuation. with transcon J fares for $500 and longhaul J for $2000, i just no longer care about saver inventory after the past few years using AMEX and Chase points this way.

  16. I don’t think its just last minute? I have been a gold (and at times platinum) member of United for quite some time. I understand that I am fortunate enough to have a job that allows me to travel and collect my points. However, I have found my points to be quite worthless at this point. I do not enough points to book a nice trip for my partner and I to go to Europe in polaris. Hence, we generally put ourselves on the “upgrade waitlist” on polaris routes. I remember 10 years ago, there was raely an upgrade list and we could always find a way to upgrade a flgiht on miles. Nowadays, I rarely find a flight that doesn’t have an “upgrade waitlist.” Between charging thousands of dollars for a polaris flgiht (2k each way on a 5 hour flgiht, really?) or thousands of miles, I feel pretty priced out of any award availability. I’d love to meet the peopel who can actually afford to throw away tens of thousands of dollars on plane tickets.

  17. Ben, your analysis on this is way off. Firstly, you fail to take into account that AA has terrible turnover in its Pricing and Revenue Management function. With so much turnover, there is less time for analysts to tweak flights and when many of these analysts are making $50K with no experience right out of college, the inputs they make to the AA’s Revenue Management system may be too aggressive so the system thinks that the seats will be sold and doesn’t open up inventory at the last minute, which is why you need analysts who are vigilant. Secondly, AA doesn’t have an Ancillary/Merchandising team as big as Delta and United’s. I consistently see that United is willing to give you the last seat on a flight at the saver level or for upgrade with miles while the non-mileage lowest standard rate remained extremely high which isn’t surprising since United in essence has PRM and Merchandising making independent decisions. I suspect that AA hasn’t gotten as creative with its Ancillary Revenue because their operations, customers service, and overall strategy remains so ghastly that if their top tier members see upgrades being sold for pennies to non-elite members, they wouldn’t be that loyal to AA any longer (kinda like you actually since you spent 2019 criticizing AA to the core yet in the end you are terrified of losing all your upgrades and went out of your way to maintain your AA status). Last, but certainly not least, AA, just like DL and UA, overbooks by a lot… I have seen some flights being overbooked by as many as 30 in economy so if a flight is already overbooked (and only the operating airline would know) then you can’t expect them to open saver space. Again, even if you are seeing a flight having no seats booked in First Class, that doesn’t mean that AA didn’t overbook Economy and Business Class. Frankly, I don’t think that AA has yet learned the sweet pricing differential between Basic and Standard Economy… often, I see crazy differences like Basic at $79 and Standard Economy at $259 and this makes the situation worse as AA is most likely overbooking Basic heavily and you can’t tell that from a seatmap.

  18. @ David — All valid points, and even when writing posts like this I don’t address all the possibilities, because otherwise each post would be thousands and thousands of words. To address a few of your points:
    a) Totally understand there are situations where lower cabins may be overbooked, but there are also examples of all cabins being wide open on a flight and there still being no saver level award space
    b) There’s no doubt Delta is more deliberate and methodical about the way they approach this, and I think to some extent American is only following them “just because,” which is to say that I think Delta has consciously decided on a strategy, while American hasn’t as much
    c) Hadn’t considered the high turnover, though if American is leaving revenue management in the hands of a revolving door of newbies, that then that seems like a pretty big missed opportunity

  19. Max,

    I just booked SFO-LHR in First through Alaskan – 70,000 miles.

    There were slim pickings. I recommend using the BAEC site to find which days have F availability for your route. And then book for the days you see via Alaskan.

    More generally although in theory Alaskan is great for F awards on various airlines, in practice availability can be hard to find.

  20. Ben, on my last point, through linkedin, glassdoor, and other employment sites, we can see that AA is regularly needing to hire Pricing and Revenue Management analysts while Delta and United barely have any openings. This is largely due to the fact that both Delta and United have made strong efforts to hire more selectively. Also, look at AA’s neighbor Southwest which happens to be based in the Dallas area and they don’t have turnover issues because they strive to preserve a good corporate culture. I work in a different industry but often get resumes of AA’s PRM analysts who apply for employment at my company and I can honestly say that they unusually low skills and can barely answer technical questions when you interview them. I guess that’s not entirely surprising when AA has such a terrible leader setting the worst examples for the entire organization. It is sad to see what AA has become and I completely agree with you that they are missing out on huge revenue opportunities but then again, they are simply too cAAreless these days.

  21. Why don’t airlines take the opposite approach, and make earning miles a lot harder? Keep the price of a saver award roughly the same but make it harder to earn miles for that award. Should balance out these problems without the negative optics of charging 320,000 miles for a one-way award, which looks horrendous to a consumer. These airlines have so many ways to earn miles: Lyft partnerships, online portals, credit card bonuses, etc.

  22. A big part of the problem is The Points Guy and them having a 30 article a day goal. They have a large following and their content writers (desperate for content) will write up an article for example about a sale of Alaska Airlines mileage and how you’d be getting premium class tickets that cost thousands of dollars for under $800, along with step by step instructions have made this more mainstream.

    The mileage brokers or travel consultants are growing because of the aforementioned public awareness. However, I feel the airlines could be more aggressive in combating those enterprises. These brokers are not even hidden. We aren’t talking about a scalper outside a sports venue whispering “tickets” to people passing by. They advertise on Adwords, FaceBook, Instagram- They are very easy to find.

    The airlines should start hiring private investigators to conduct “controlled buys” to determine the exact practices the tickets are being booked under and to learn the payment processor.

    Every payment processor has verbiage about infringement or unauthorized distribution, Google Ads shuts down ads accounts really quickly if a big organization complains about unauthorized sales. Same with the others.

    Aggressive enforcement would totally help with weeding out some of the mileage brokers (it appears to be a handful of big players operating multiple entities).

    Nevertheless, the mileage game is ending. It’s going to be a .01 cent per dollar cashback program basically across the board. 🙁

  23. I’m now literally on CX F (YVR-HKG) that I snagged last-minute. I’d say Asiamiles is still generous in terms of releasing seats last-minute, even in the peak season.

  24. What doesn’t make sense about this is that a mile a penny is like 1% cash back, which sucks. Who would ever collect miles if you can get 2.5% on a cashback card? Everyone will eventually figure this out and they’ll lose all their credit card revenue.

  25. “while in other cases it has led to brokers booking refundable seats and then canceling them last minute, only to book their clients award seats and profit big.” – really instead of screwing over everyone they should have just taken actions against these brokers who were gaming the system. Always a small group of people that have to ruin things for everyone else because they are greedy.

  26. Predictability could lead to revenue generation. I don’t buy flights on Skyteam because I can’t count on a predictable price for a short hop awards flight price when I need it. For that simple thing I might put €10,000 in KLMs pocket instead of BA’s but they fk around instead.

  27. Here’s the thing. With true loyalty, your points cost you nothing… they are a bonus however you spend them. But buying points means that however you do it, your flights are going to come directly out of your hip pocket…it is just about minimising your cost ratio. These are two seperate stories. If the airline is wise, it will skewer the effectiveness towards those who are being loyal, as this is why they call it a loyalty program. If you are going the bean counter strategy, you have missed the point, and all the flow-on benefits.

  28. I highly doubt that brokers can frequently book and cancel tickets to game the system. AA takes this type of behavior seriously and they even have a Corporate Security team that investigates these abuses. There have been reports of AA even forcing passengers to take their connecting flights after Corporate Security realized that they were playing the hidden city game. Also, on Flyertalk members have reported that AA froze their accounts and took back all their miles when they were caught booking and cancelling tickets in order to try to have the best chance of their upgrades clearing. In one incident, the member complained and AA still refused to give back the miles even when the person’s flight left with empty seats in Business Class.

    Frankly, too many of you are simply making a big deal out of an issue that isn’t that difficult to begin with… AA just isn’t good revenue managing Basic Economy so they frequently have huge differentials between Basic and Standard, thereby basically pricing themselves out compared to Delta and United; what ultimately happens is that to fill the flights AA is overbooking a lot more Basic seats (especially around peak holidays) which is absolutely retarded because they are yielding less by thinking that with their terrible service they can command higher differentials between Basic and Standard that their competitors yet in the end they aren’t… No surprise that they have to resort to trying to get people to pay to keep or upgrade their frequent flyer status because their net ticket revenue isn’t making investors happy.

  29. “It just makes sense. With a rewards program, the company should love people redeeming rewards when it costs them the least.”

    Except cynical analysts have taken control and manipulated algorithms and booking interfaces to frustrate users.

    Therefore the company now loves people never redeeming their points, which only lose value over time.

  30. I am less and less interested in earning “status” and airmiles (which I use exclusively for hotel room redemptions, at a ridiculously high rate, e.g., 4 nights at a NH hotel at the airport in Western Europe, 4 months in advance, for 98,000 miles…with the same room selling online for $66 USD cash a night [equivalent to approximately 17,500 airmiles at 1.5 cents each/$264 USD, for the same 4 nights] through the online hotel booking sites).

    For about 4 US-Asia flights a year (out of a total of 84 flights/segments in 2019), I use the discounters’ or brokers’ business class tickets. I don’t know for sure how many people on these 4 flights are using discounters’ tickets, but I would imagine that they are not the majority of passengers, so I am reluctant to make the discounters the scapegoats in understanding the many difficulties and tendencies in this excellent article. In all areas, there are good and bad companies, including airlines, discounters, retail stores, new car dealers, etc. Business models are constantly changing in order for the companies to survive. It’s often a pain, but it keeps me on my toes intellectually and consumer-wise.

  31. It’s not so complicated. Rather this is simply the latest development in the bait and switch FF miles programs where we promise great awards but don’t actually deliver them. Airlines will continue to increase award prices until People stop using airline credit cards. It’s pretty simple.

    The more interesting question is what will happen when No more airline programs are left which provide good value for transferable credit card points. At that point the whole hobby will die and people will switch to cash rebate cards.

  32. I really enjoy these posts about the economics of (parts of) the airline industry. I hope you do more of them.

    I’m always impressed at how deep your understanding of the economics of the situation is. (I say that as someone with a PhD in economics, so I hope you take that as a big compliment!)

  33. This is all part of a brilliant Delta strategy.

    Delta realized they have the best US major airline (Southwest is competitive, but not international). Delta operations are far better than AA and United, it is not close.

    So Delta likely saw AA and United were blindly following Delta strategy, and gutted the already very weak Skymiles program. United and AA stupidly followed and gutted their own programs.

    This leaves Delta in an enormously powerful position, their competitors lost their only competitive advantage (loyalty programs). Delta now has the best airline and the same level of loyalty program as their competitors.

    I had been a 100k annual flyer on United and American depending on whose hub I lived closest to. But I have switched to Delta for my US business travel even though I am at a United/AA hub, and put all my spend on non airline credit cards. There is no reason for loyalty anymore, I may as well fly the best airline available.

    One day business schools will be teaching a case study on how Delta hoodwinked AA and United. It was a brilliant strategy, and they are probably still amazed it worked. AA and United seem to be run by fools.

  34. Totally agree with this article. Miles and points is not what it used to be due to the growth of the concept and the number of people doing it round the world now. Especially being based down in Australasia, there is virtually no availability in premium cabins to either US or Europe via asia. I think the introduction of sweeper software that picks up award availability makes finding awards for the average person even harder.

    There used to be the odd QF or FJ, or CX award to the US or Asia but they have been becoming increasingly rare. Mixed cabins are becoming the norm with the long haul sector in Y. I am no longer going to purchase points when on sale. Just not worth it.

    We are up against the US credit card companies and their generous sign on bonuses and transfer rates which are flooding the market with an ever increasing number of miles and points, in pursuit of an ever decreasing number of awards.

    For eg in New Zealand the transfer rate for Amex MR to Marriott Bonvoy is 3:1, so a far inferior rate to the US 1:1 transfer rate. To cut a long story short once I’ve used up my miles I’m hanging up my boots on this. The number of program devaluations, in many shapes and form, has become too many for my liking. Just not worth the time and effort looking for a needle in a haystack.

  35. Isn’t it possible the reason for not offering many last minute award seats is they can sell the upgrade at the airport to an already ticketed passenger and have money rather than give up the space to a free ticket?

  36. The real issue seems to be a trend against award availability for partners.
    You used to find multiple seats close-in in AA First transcon via BA.
    Much rarer now.
    This is because BA pulls from Saver inventory and AA is basically killing that in premium cabins.
    And yet Points Guy and other sites routinely talk about the value of Avios for AA transcon.
    They know it’s gone. But they ignore it.

  37. Ben,

    I don’t know why you stated that AA (which is unfairly much maligned) doesn’t offer last minutes saver award tickets. I haven’t checked any domestic destinations but on the international side, AA offers plenty of saver award tickets in business class to LHR, CDG, AMS- just to name a few–flying from late December to early January.

  38. Glad we already traveled the world and seen what we want to see multiple times when it was easier to use points for hotels and easier to use miles for flights. But, there are ways to nail the seat you want if you can book at xxx times out from planned travel. Now we help others use their millions of points, in which, they seem to not be able to use. I’m not a miles broker either. We have our own algorithms. We work full time doing this and even had to remove our website from public view. I really think it comes down to there are more people on the earth and more that are able to travel than ever in history. Airlines and hotels will continue to grow…just not fast enough.

  39. Delta lower level awards have advance purchase requirements which are disclosed in the fare rules which are available when you select an award. Many routes also have a additional award levels which require a roundtrip purchase requirement. Again, they disclose this in the award fare rules. These very much resemble the requirements you will find on the cheaper revenue fares. Not saying it’s a good thing, but at least there is disclosure if you are willing to put in some effort at reading the rules. Partner levels (AF/KL and VS) also have different levels with different advance purchase requirements.
    Low-level TATL one-way D1 awards are 80K and have a 90-day advance purchase requirement. The 320K amount reflects what you will see if you are purchasing within 90 days of departure or if there is no inventory in the low level bucket. There are additional levels between 80K and 320K each way, but they require a roundtrip purchase and you will never see them if you are only searching for one-way’s.

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