Life is full of caveats and this subject has plenty- but in general: great flight deals have killed frequent flyer miles. Earning them, using them, it’s all upside down. There’s an increasing trend in air travel and we’d like to take a moment to explain why your frequent flyer miles are worth less than ever…
This is not to say miles are worthless. For many, miles are the only way travel can be affordable. Even a “great deal” is not one that can be managed by all; and therefore frequent flyer miles are the only way forward for many travelers. At the very least, miles will always represent a potential tool for savings, but the emphasis more and more is on potential- and not actual. The point here is that the pursuit of value, where miles really, really shine is becoming a far more tedious pursuit. For those afforded the luxury of choice, miles are no longer the same.
When international flights to place like Europe, Asia or the U.S started at $800 and realistically, more like $1000- 50,000 points seemed like a total steal. No money out of pocket, great destinations, all good. But now we’re seeing almost weekly flight deals below $350 to Asia, Europe, Middle East, the U.S. and even occasionally Australia. When following traditional “cents per mile” wisdom, you’d be getting less than 1 cent per point in this new equation. This is an instantly stark contrast to using 50,000 points for $1000 of value. When you take things a step further, considering airlines add surcharges or taxes in addition to using their points- things are closer to “worthless” than they were before. Though we don’t believe they are in fact worthless.
Let’s take an interesting example. Many European airlines tack on over $350 each way for business class seats using points. Figure 50,000 points and $350 or more each way for business class between Europe and the U.S. or Asia. You could do this. Or you could take advantage of the frequent business class deals out of Europe. Fares have regularly hovered around $1000 in special sales, round trip. So for only $300 more, customers are now earning points rather than using 100,000 hard to earn points, while earning elite status qualifying points and enjoying the freedom to fly where they want, when they want- not restricted to (dwindling) availability.
And with flying conditions for passengers not in first or business becoming increasingly a la carte, attempting to earn perks which make for smooth sailing is the way forward. This pursuit is only possible when buying tickets and not when using miles. Loyalty may not be what it once was- but if it gets the first row in economy, a free checked bag- or best yet, lounge access for every flight, that seems like a great deal. But even that pursuit, loyalty to an airline, is now an existential crisis- given the rise of PriorityPass, credit cards and other ways to get what you want- without loyalty.
Truth be told airlines have become greedy beyond reason, even their own reason. Increasingly competitive fares actually make airlines more money. More planes fly full because people who didn’t plan on traveling love a bargain. Using miles for economy is largely out- minus a few good instances, so people think aspirational. But airlines did not enjoy giving their coveted seats up front away using points, so they inflated the points needed to extremely prohibitive levels. So what’s left, upgrades? For many travelers- this may be one of the last remaining honeypots. As long as airfares remain low (which I think we’d all prefer), points will play a dwindling role, or at the very least- an entirely different role in our loyalty.