Frequent-flier programs may very well be the most effective, powerful marketing tools introduced in the last century. And in recent years, they’ve also become the most profitable divisions of many airlines. In fact, loyalty programs make more money than the airlines themselves.
How can this be? Let's do the math.
The airlines get gazillions of dollars by selling miles to thousands of mileage partners — banks, grocery stores, florists, mortgage bankers, and the like — so that you can "earn" one mile for every dollar you spend. But the airlines don't just print the currency; even better, they control how those miles are redeemed. When the airlines make it difficult to trade in your hard-earned miles for a ticket, and keep the redemption levels below 10 percent annually, they make some serious money. For the airlines, loyalty programs offer an amazing return on investment. Why does this scheme continue to work? In short, it’s because we've become so addicted to earning miles any way we can. The continuing challenge for addicts like me — and you — is how to redeem miles for the flights we want, on the dates we want, when the airlines make it tough to snag a free ticket or a first-class fare. And recently, getting these rewards has become even tougher. Why? For starters, many of us like to redeem our miles not for specific flights, but to get upgrades on tickets we've already purchased. But now, several airlines have introduced the concept of a “co-pay,” an extra fee for the privilege of upgrading your ticket. For example, on American, it’ll cost you $100 (plus 30,000 miles) to upgrade a domestic round-trip ticket; the fee rises to $700 for many long-distance international flights!
Obsessed with generating revenue any way they can, the airlines have jumped on their frequent-flier programs as an easy target. But in the process, they've turned their "loyalty" programs into the airline equivalent of a bad HMO. It's skyway robbery and goes against the very reasons we were induced to join these programs in the first place.
Remember the original pitch? Show your loyalty to an airline, accrue miles, and when you reach a certain level, exchange them for a “free” reward. Not anymore. What’s the solution? In the short term, don’t use your miles to upgrade. It's actually a very inefficient use of your miles, made all the more so by the recent co-pay rules. Instead, book as many as 330 days ahead on your program’s partner carriers. If you belong to American’s AAdvantage, book your ticket on British Airways, Qantas, Iberia, Royal Jordanian or others. If your miles are in United’s Mileage Plus, try SAS, Thai or Lufthansa, for example. That way, you can get tickets to places you've always wanted to go, issued on the stock of those other airlines.
But do it soon. As airlines worldwide continue to cut capacity, that means availability for mileage tickets is shrinking by the week. Remember, no airline wants to redeem miles for tickets if it means displacing revenue passengers. So act quickly — before the airlines introduce another nickel-and-dime charge on their most loyal customers. Do you agree that frequent flier programs offer loyalty at too high a price? What’s been your success rate with scoring free tickets or upgrades? And what do you think of the new “co-pay” rules for frequent flier tickets? Share your thoughts with other travelers in our comments section.
If you are scared of flying or air travel then you are not in the minority. In the post-9/11 world, a good percentage of people are fearful, and with good reason. Air travel has always been a major source of fear but there have been a few hints and tips that have been developed, tried and tested in recent months. These tips cover literally everything from cancelled flight to key things to remember, and are all designed to ensure that you rest easy with peace of mind in the time immediately before you board the plane and during the flight itself.
First of all, make sure that you book your air travel nice and early. If you leave it until the last minute then you are liable to have to travel on a flight that you do not want with times that do not suit you. Alternatively, it may be that you have to take a more expensive form of air travel. Booking early not only assures you your set, it can also save undue panic too. If you have any frequent flyer miles you can also use them in part payment so that it will not be as expensive as you think to fly.
If your budget is a priority then you may want to look at flying off peak. Not only will the flights be cheaper, but they will also be less crowded and if you suffer from anxiety, this could be just what you need. The space will prevent you from having a panic attack and enable you to travel in style and comfort. Off peak times are generally in the middle of the day or in the evening, so look for flights at those times of day.
If you happen to have booked on a flight that has no reserved seats then check in early to make sure that you can board first and choose the seat that is best for you instead of the one seat on the plane that you do not want above all others, which would inevitably happen if you were to turn up late! Some airlines actually allow you to choose your own seats so that you can allocate yourself where you like. American Airlines is the best air travel company for that.
Another reason to arrive at the airport early is to avoid the queues at check in. If you have luggage then at least two hours in advance for air travel is about right. You can sit and have a coffee after your bags are taken care of and relax before you board. If you are already anxious then the crowded halls will do nothing to help you so always arrive early for air travel.
If you are nervous about cancelled flights then make sure that you take a good book and a music player so that you can retreat to your own little world in case of an air travel delay. If your flight is announced as cancelled then seek out a flight attendant to ask about another scheduled flight. He or she should be able to direct you to the help desk and they can alter your flight for you. Think of it as an opportunity not to lose your temper or panic, but as an opportunity to have a little me time, courtesy of air travel. Few of us actually have time out these days so unexpected delays should be welcomed and not feared.
oh,oh
why ,don't comment
I'm not a frequent flier these days, and as such, don't join any frequent flier programs. The airlines are using it as a marketing strategy, to their own advantage. Fliers can't just win them here. I also don't like the co-pay concept, because upgrading a ticket is a bit too expensive, for me at least.
I think a good airline should give chance to choose seat.
very interesting answers, lukes answer was very straight forward.
excellent article, must look into the actual monetary figures in that transfer of miles from partners to airlines, cheers for sharing Peter :)
very good read for how loyalty is given to customers
swjsgdydgusskudt0sefsshjwaui eusudgtduguf0sdsjgdgjodyjsdfg
very interesting points made
while i agree with Peter that it is not very easy to redeem miles for the flights and dates you want - i don't know if i agree that airlines are profiting huge from frequent flier programs. for exapmle - i spend close to $50k for my business merchandise purchases with my visa credit card associated with a popular frequent flier miles (FFM) program and collect a mile per dollar spent. that's 50k miles per year through purchase alone. i would not get any discount for my business purchases even if i pay cash and neither does my wholesller who i buy from gives a kick back to the airlines i have FFM program with. and i don't think visa people give much of what they collect (usually 2 - 3% per transaction)from the transaction either. i don't know about hotel and rental cars but again i get free miles each time i use them and not pay any more for hotel and rental cars had I not been a FFM memeber.
So except for repeat business airlines get I don't know how else they benifit. may be some one can shed some light. i would love to know.
as for me FFM works great. i qualify for unlimited domestic first class upgrades (and do get upgrade about 80% of the time). plus i can redeem miles for overseas travel. best bang for the "buck"...i mean "miles" instead of domestice travel use - 50K miles can get you a round trip to MSP-BKK or JFK-DEL or SFO-CDG for example in middle of winter - above $1000 cash for tickets otherwise). Granted all FFM programs are not created equal!!!
I regularly redeem frequent flyer miles for travel. Because I can usually find a cheap ticket for a domestic flight I use miles for international travel. I have flown to Spain (first class), Jamaica (first class) and most recently, Feb 2009, to South Africa (first class) using frequent flyer miles. My trips to Spain and Jamaica were before the imposition of surchages on trips using FFM. I was actually shocked and surprised. I was not aware of the surcharge. That surcharge is nothing more than extortion by the airlines. You've already earned (paid for) the miles by purchasing something connected to the airlines. So much for loyalty!!. But like Mr. Greenbery, I'm a FFM junkie. I rack up miles by using a credit crd for all purchases howver small or large. In addition, I always try to purchase tickets on partners of my main FFM airline so I can bundle miles btween airlines. I always pay the bill in full or its not worth the interest on the crd. With diligence you can make FFM miles work.
I too rack up miles by traveling, shopping etc. And collect miles from several airlines. It gets frustrating when you get enough for a ticket, the miles required for regular coach have doubled. On American or Delta, a simple ticket advertised at 30,000 miles, turns out that they want 60 or even 70,000 for the ticket when you try to book it. My favorite airline that in my experience has the best program is Hawaiian airlines. You can purchase ALL flights with miles, and the interisland flights don't require many miles for travel. I used 6000 miles per ticket for one-way travel from oahu to kauai. You can even get miles from someone else or give miles for free, no charges. wish all airlines were like that.
Yes, I agree with much the article is stating, and it is true that it is getting more difficult to use your miles. It has always been so, though. However, if you are wise and know how to play the game it can be great!
In the last 23 years, my wife and I have enjoyed 20 free trips. Hawaii - 6 tkts; Alaska/Vancouver - 4 tkts; Paris - 2 Business class tkts; Singapore - 1 Business Class tkt, and more. When you realize that a Business Class tkt to Asia can easily cost you $8000, or more, I am way ahead of the game.
I also scheduled 2 coach tkts to Singapore/Bangkok for this summer, but I canceled my plans. I am sorry to say, it cost me greatly, as United Airlines raised their mileage requirements.
Now, a Business Class to S.E. Asia is 125,000 miles, rather than 90,000 miles. How sad. Well, must keep up the fight for free travel!
Years ago, the benefits that airlines and credit card companies paid out were more precious. Today, you have to be carefull not to be abused. Do the math. Careful. If you are paying out $60 - $95 per year for a credit card and you don't charge up enough to earn a free ticket quickly, you may find that you are paying out hundreds of dollars in fees for the sake of flying Miami-New York, which you can buy cheaply. I charge everything: gas, food, entertainment, flights, etc... but I always pay my credit card's monthly bill in total. DON'T finance debt, because this is the other way in which your purchases no longer make sense. I always pay my credit cards debts in full. Check out the interest fees and you will see they are not cheap.
Enjoy the travel benefits, but do remember to carefully focus on the cost of that free ticket. Add up the charges: Credit Card Fees, interest, airline fees to purchase miles you may need to complete the trip. Believe me, while we are sleeping each night, the airlines have people awake and thinking it ways to take our money.
What loyalty? As a 23 year member of a frequent flier program and having over 2 1/2 million miles on a particular airline, they have figured out how to lose any loyalty they could have garnered by imposing burdensome fees, stipulations and policies. I now go for the cheapest or quickest flight, baloney on being loyal, they aren't loyal to us.
