Despite the fact that collecting coveted airline miles has never been easier, the frequent flyer game is only getting more difficult for the little man.
Among the controversial changes, one-way domestic flights that once cost 25,000 miles are now broken up into three tiers (20,000 miles, 30,000 miles and a third level American hasn't quantified yet) for some loyalty members, depending on the time of year and destination demand. For example, a one-way domestic Thanksgiving flight might have cost 25,000 miles before and will now likely cost well over 30,000 miles. On the flipside, an off-peak flight could become slightly more affordable.
“What’s crazy about American is they didn’t give anybody any warning,” says George Hobica, founder of Airfarewatchdog.com. “People are pretty outraged.
A million+ miles and you'll charge for my golf clubs? Buh-bye: American Airlines tweaks frequent flier program http://t.co/ov1n8vcAn0— Michael Jones (@ledwithjones) April 9, 2014
There’s an entire forum on Flyertalk.com dedicated to travelers simultaenously venting and trying to decipher frequent flyer policy changes. American’s new award program rules are now applicable to all travel after June 1, even if you book in advance.
But American isn’t the first and certainly won’t be the last airline to devalue frequent flyer miles. In November, Delta (DAL) announced that in 2015 it would start awarding miles based on the price of a passenger’s ticket, rather than the distance of their flight. With the change, Delta followed in the footsteps of Virgin America, British Airways and Southwest Air.
If you fly Delta today, you could take a 2,000-mile trip from Atlanta to Los Angeles and have 2,000 miles in the bank to apply to your next airfare. But when the airline’s new rules take effect next year, the actual distance of the flight will mean nothing. If the ticket costs $400, you’re only getting 400 miles.
As of February, United Airlines revamped its frequent flyer program in what BoardingArea.com called “one of the worst guttings of a frequent flyer award chart” to date. The miles needed to buy first-class one-way tickets jumped as much as 86% higher in some cases. For example, a one-way ticket to South Asia went from 140,000 miles to costing 260,000. A first-class trip from the U.S. to Europe went from 135,000 miles to 220,000 miles.
Simultaneously, United did away with complimentary upgrade perks for some of its Asia MileagePlus members. Another blow to frequent flyers: their miles are worth less when it comes to the fun perks they had before. The more miles you fly, the more status you earn with airlines. Members of these elite flying clubs get perks like free upgrades, fewer checked baggage fees, higher priority on standby lists, and access to exclusive airport lounges.
As of American’s announcement on April 8, for instance, its AAdvantage Gold members, and Dividend Miles Platinum and Gold members lose one of two free checked bags on flights to South America.
“It really makes me wonder if chasing miles is worth it,” Hobica says. “It’s like inflation. There are too many people with miles chasing fewer seats."
How to maximize your miles
Miles may be losing their value, but they’re easier than ever to get. Credit card companies offer tens of thousands of free miles to lure new sign-ups and even Netflix and mortgage lenders offer free miles as a perk.
But as their purchase power declines, people hoping to use miles for those once-a-year vacations or the rare international trip will find they’re a lot more trouble than they’re worth.
“You need to think about what you want to use your miles for,” says Brian Kelly of ThePointsGuy.com. “If you want to fly coach with a family of four, you may very well not want to play with normal mileage programs. I’d recommend getting a credit card that gives you valuable cash-back rewards.”
Kelly keeps a list of the best cash-back travel cards, and you can find similar round-ups on other websites. The benefit of cash-back cards is that you earn points almost every time you swipe — so everything from your grocery store trip to buying a new pair of sneakers could generate cash that can be redeemed for travel costs. And since you’re earning cash, you don’t wind up with a bunch of miles that have little to no actual value.
Like a well-balanced investment portfolio, it also pays to diversify your pool of frequent flyer mile sources.
“A key opportunity is using hotel loyalty programs that you can transfer [points] into airline programs,” says Lile. “Starwood has an Amex card that earns points for hotels in the [Starwood family] and you can use those points for two dozen airlines around the world.”
Kelly recommends checking out Chase’s ultimate rewards cards, which let you use points to book flights on several airlines. American Express, Barclays and Capital One have a family of popular rewards cards that offer similar opportunities, as well.
“There’s kind of a mountain to climb and it takes a while to familiarize yourself with the ins and outs," he says. "But absolutely there is still amazing value out there."
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