Finding the Elusive Formula for Cashing in Miles

The Wall Street Journal

Leslie Keely and her family have gone from Des Moines to Fort Lauderdale in December for several years on standard 25,000-mile, airline-award tickets.

She starts shopping for flights 11 months in advance, is flexible on travel dates, checks airline inventory several times a day and is willing to split up her family of three on different flights if necessary to get tickets.

This year, she's coming up dry.

Neither American Airlines, nor United Airlines, nor Delta Air Lines have seats available at the lowest mileage level on that route. There are plenty of seats at double the price in miles, however.

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"This is the first year it's been this bad,'' said Ms. Keely, a West Des Moines, Iowa, financial adviser. Frustrated, she's written airlines and received boilerplate explanations of availability limits on awards.

"Maybe I just have to come to terms that it's just no longer available,'' said Mrs. Keely.

The standard 25,000-mile domestic frequent-flier ticket, an emblem of airline-loyalty programs for nearly two decades and still a selling point airlines advertise heavily, seems to be going the way of the in-flight meal.

High oil prices have pushed up airline ticket costs sharply. Overseas, airlines tack on hefty fuel charges and special fees to award tickets, but in the U.S., airlines can cover higher costs by making fewer seats available at the lowest mileage-redemption levels. Tight airline capacity also has left flights with few unsold seats.

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Standard or "saver'' awards, as some airlines call them, have long been tough to come by during summer months or holiday seasons. But mileage tickets used to be more plentiful on off-peak days, travelers say.

A check of basic-award availability on various routes for every day March through December shows just how hard it can be to score a ticket with miles—unless you are willing to pay 50% to 100% more in miles. And lack of availability is clearly no longer limited to peak travel days.

From New York to Portland, Ore., for example, Delta's website had no round trips available for 25,000 miles in June, July and August. That might be expected, but there were only two days in September when you could depart on a 25,000-mile ticket, three in October and one in each of November and December—a total of only seven days in the second half of the year.

Likewise, American's website offered no round trips at the 25,000-mile level in July and August for a trip from Seattle to Orlando. Those are both popular vacation destinations, so summer would typically be a tough time for cheap long-distance tickets.

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But there were also no round trips available in September or November—unless you paid either 37,500 or 50,000 miles—and only one day in each of October and December to leave Seattle for Orlando at American's once-standard price.

US Airways, which has a hub in Philadelphia with lots of flights to Las Vegas, has only three days available in April for a 25,000-mile round-trip ticket on that route. Fall is no better: There were only three days available in October to fly to Las Vegas on a standard mileage award.

It isn't just vacation destinations that are affected. For a trip from Omaha, Neb., to Atlanta between now and August, United offered only 14 days when someone could depart on a saver award ticket.

Even on one of the nation's busiest routes, Los Angeles-New York, which has lots of low fares, seats at the basic mileage level were available only about half of the days through the rest of this year in a check of four major airlines in six different markets. Airline inventory, which can fluctuate, was checked Feb. 24-27 using the airline's availability calendars.

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When low-price awards were available, they often were for Tuesday or Wednesday flights, when travel is lighter, and often for very early morning departures or trips with inconvenient connections.

Airlines set the price for mileage tickets much as they do in cash tickets: As seats sell, or strong demand is predicted, the price generally goes up. So, when the cash price of a ticket was the lowest fare-class set for a trip, perhaps $300, you had better odds of getting a seat for 25,000 miles, the lowest class of award. With the cash price moving to higher fare classes, say $500, awards also may move to higher levels.

In January, cash ticket prices were up about 9% over a year earlier, according to Airlines for America, the industry's Washington-based lobby group. Mid-February saw another $10, across-the-board price hike for round trips. Fuel is the biggest single expense for airlines, accounting for about 30% of operating costs. After dipping below $80 a barrel in September, the price of crude oil topped $109 a barrel in February.

Airlines say they try to balance customer demand for award tickets with the need to generate revenue.

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Frequent-flier miles themselves generate billions of dollars in revenue for airlines, which sell them to credit card companies and others which then offer miles to consumers as rewards. To keep the awards valued by consumers, airlines have to make seats available for miles.

Higher ticket prices have increased demand for award seats, which is one reason they may be harder to find, a spokesman for Delta said.

A United spokesman said, "there has been no measurable reduction in standard and saver award availability this year compared to last year.''

American's 25,000-mile domestic award is still the most popular award claimed, "by a wide margin," a spokesman said. While higher oil prices haven't changed American's allocation of award seats, they are tied to revenue, so higher ticket prices can have an impact.

Mrs. Keely said United told her to consider booking an undesirable flight, if she could find one, at the lower mileage price. Then she could get on a waiting list for a more desirable flight, or pay 50,000 miles for an unrestricted domestic round-trip.

That's what she's ended up doing. After noticing that the cash prices for tickets, about $450 round-trip in past years, were at least $510 this year, she found a ticket for herself at 40,000 miles. Then she bought one for her husband, a teacher, with 50,000 miles and this week gave up the hunt and paid 50,000 miles for a ticket for her daughter.

Write to Scott McCartney at middleseat@wsj.com

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