By Kelli B. Grant
It may be time for travelers to reassess their airline loyalty.
A perfect storm of airline mergers, frequent-flier program changes and reduced flight capacity could make it tougher and more expensive for travelers to redeem miles in coming months, experts say. Travelers who can’t reasonably expect to earn elite status — and the free upgrades, priority boarding and other perks that come with it — may be better served these days by chasing fare sales and using a cash-back credit card instead of one branded to a particular airline. “It’s more miles chasing fewer opportunities to spend them these days,” says George Hobica, founder of AirfareWatchdog.com. “At least you can spend cash [back].”
After all, many of the perks once reserved for elites can now be purchased or earned on the merit of something other than miles flown. American Airlines and social-media-influence measurement site Klout announced a partnership Monday that offers some Klout users free access to the carrier’s lounges, a perk usually reserved for elite fliers and first-class and business-class passengers. (Any flier can purchase a one-day pass for $50.) In February, United began selling access to its faster security lines — free for elites and select other passengers — to all fliers for as little as $9 per flight segment. Lounge access and priority boarding have also become common perks for airline credit-card holders.
Even earning miles is getting complicated. In September, Delta reduced miles earned on special fares, including student rates and flights booked as part of a discount tour or cruise package. Depending on the fare class, those travelers could see as little as 25% of miles flown added to their frequent-flier balance. That variation is something carriers abroad have long used, and it could become more popular among domestic airlines, says Randy Petersen, founder of frequent-flier site InsideFlyer.com. “All miles are not created equal,” he says.
Mile-earning has become easier for spenders — programs are increasingly focused on purchases with the airline, with its partners or on a co-branded card, says Petersen. Earlier this year, regional carrier Sun Country retooled its program to award travelers based on how much they spend rather than distance flown, and Delta added a $2,500 spending requirement for frequent fliers to achieve elite status. Mileage bonuses for new airline cardholders are also on the rise — but so are spending requirements to grab them. For example, Chase routinely offers 50,000 bonus points on its British Airways Visa Signature to new cardholders who spend $1,000 in the first month. Those who signed up before Feb. 27, however, could have earned up to 100,000, provided they hit that first spending requirement and then went on to spend $20,000 more within 12 months. See The rising cost of travel-card rewards
Shifting alliances and mergers further limit earning and redeeming opportunities. As US Airways and American Airlines proceed with their planned merger, US Airways is expected to leave the Star Alliance, a global airline network through which US Airways fliers can earn miles. Granted, the merged airline would be part of the other global airline network, Oneworld Alliance. But travelers flying particular routes could find that the change requires shifting loyalties, says Hobica. After Virgin Atlantic and US Airways expanded their partnership to new markets last year, the two announced earlier this year that effective June 12, the two are parting ways, with travelers no longer able to earn or redeem miles from one program in the other. The likely reason? Delta’s recent 49% stake in Virgin.
On the redemption side of the equation, some experts say Delta and US Airways could shift toward revenue-based redemption. That is, the price of award seats will be based on the going monetary rate, rather than being tied to a flat number of miles. “I firmly believe that’s going to be the next step,” says Brian Kelly, founder of frequent-flier resource ThePointsGuy.com. That could benefit some travelers. In such systems, for instance, award seats are always available. And with each mile worth a penny, travelers taking cheaper flights could come out ahead. (For example, a domestic round-trip flight costing less than $250 would be “cheaper” in miles than the current flat 25,000-mile charge.) But travelers who save their miles to use for pricey flights or first-class seats will end up spending more, he says. See The best airlines for 5 kinds of flights
And to cap it all off, travelers are likely to see those “free” award seats carry a higher cost in fees. Last year, Spirit added fees of $15 to $100 for booking award travel close to the date of departure. “It used to be, with frequent-flier tickets, there were no fees at all,” Hobica says. “Now, it might cost hundreds of dollars.”
Updated from an earlier story.