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Frequent Flyer Mileage Programs - How to make the most of them.
In 1872 Jules Verne* couldn't possibly envision when he published his famed book Around the World in Eighty Days that a mere 109 years later, the largest Airline in the world, American Airlines, would launch a program, AAdavantage, to reward frequent flyers who could travel the world in hours not days. The AAdavantage frequent flyer program was not only first but also today it remains the largest with more than 46 million members (and you wonder why you can't redeem your mileage for the flight you want).
The inspiration for this topic came from a telephone conversation that I had last week with my best friend, Joyce who with her fiancé is coming to visit in the fall. Joyce said she was thinking of using her air miles to purchase the tickets but after looking into it - it seemed very confusing. At that point I said, "That would make a great article." So I proceeded to learn about mileage programs and after hours upon hours of research I've concluded one definitive point, Joyce was right - it is confusing! However, in my exuberance to help my fellow travelers I'll try to cover the highlights of what I've learned thus far.
Frequent Flyer Program Facts.- Started in May of 1981 by American Airlines to reward customer loyalty and to promote future usage of their airline.
- Hotel and car rental partners, Hyatt and Hertz were added to the program as a further enhancement to American Airline customers.
- Programs soon followed by United Airlines with their Mileage Plus plan that upped the ante by offering free bonus miles for just signing up. Soon everyone was in the game.
- "A mile earned for a mile traveled" was the reward to each customer signed to the program. Today miles are earned through thousands of others non-travel means including but not limited to: shopping, eating in restaurants, long distance phone service, credit card usage, and mortgages and stock trades.
- Today there are over 92 frequent flyer/guest programs.
- 54% of mileage points are earned without flying - credit cards usage is one number.
- 9.77 TRILLON miles have been earned since the program's inception (that's over 1 million trips from earth to the sun).
- 20 million airline award tickets were given away in 2004.
What this novice learned is that not all mileage programs are equal; indeed, not all offer something you may want. Currently I have 5 airline award programs that I actively use: Alaska, Delta, Northwest, Southwest and United. (I did find an old Eastern Airlines mileage card that long ago expired with the airline.) I earn mileage with Alaska by credit card usage and I earn Northwest points with my long distance carrier. That works for me as Northwest and Alaska are partners in their frequent flyer programs - miles earned with one can be used with the other.
Flyer Program Factors to Consider:- Most important is to select a program that has a high overall quality ratings - like with any business performance is key. To learn how your program stacks up check the InsideFlyer's Freddie Awards.
- Join an award program that allows you to consolidate your mileage with other programs.
- Choose an airline that you use frequently and that is dominant in your region (in the Pacific Northwest it's Alaska - that's why I chose programs that award me in Alaska miles).
- Consider the number of award miles your program offers to redeem a flight to a destination that you actually want to travel to! It's not always Hawaii that is the "redeemed mileage" destination.
- Review the program for the number of miles to gain elite status and additional perks such as: preferred boarding, lounge usage, upgrades from coach to business or first class (more then 1/3 of all redeemed mileage in 2002 with United were upgrades - everyone wants to fly the friendly skies, up front!)
- Airline alliances are also important - who's partnering with whom. This is especially important to those who travel domestically and want to use mileage for international flights.
- Also consider programs that allow you to earn the most awards for non-flight, non-travel activities that you participate in regularly.
- Check taxes and fees associated with redeeming miles or upgrading. That free ticket will cost you something out of pocket.
- Most airline programs allow you to buy miles if you don't have quite enough for a ticket - airline websites are a good source of the carriers' policies.
- Mergers and acquisitions and airline bankruptcies are real factors today, however, with the number of un-redeemed miles (more then 10 trillion) and loyalty program growth rate of 11% per annum, mileage programs are here to stay. It's the terms and conditions most likely to change. Less then a hand-full of airline mileage programs gave no benefits to members when the airlines dissolved.
Today it's a game of gaining the most points and using them for the highest rewards. But not all miles are equal. Take for example the difference in mileage earned from flying verses miles earned through non-travel means. 25,000 frequent flyers miles earned by flying will provide you Elite status and there are three levels of elite status - each have their own perks (such as upgrades without remediation of miles). The main thing is that flying a lot gives you the greatest number of perks. 25,000 frequent flyers miles earned from credit card usage is not equal to the traveler who earned their 25,000 miles by flying. The 25,000 miles earned by non-travel does not provide you with an Elite status thus less travel perks.
I love the story of playwright, Andrew Lloyd Weber purchasing a famous 18th century painting for $15 million dollars and paying with his credit card, earning him a cool 15 million frequent flyer miles!
The costs associated with collecting and redeeming your miles is certainly the trickiest part. Caution should be taken as to how you are going about collecting award miles. You and your family can certainly rack up the points if you are diligent and purchase all your household goods, foods and services using credit cards. Remember miles are not rack up for interest, service and late fees on the usage of those credit cards.
Your 2-Cents WorthThe actual average monetary value placed on a frequent flyer mile is 2 cents. So before your redeem your miles for that Orlando vacation consider the rule that each 25,000 miles (standard round-trip domestic coach ticket mileage redemption - phew!) is worth $500. Experts recommend it is best to actually purchase a ticket if the ticket price is less then the redeemed number of award miles. Example: Round trip ticket to fly to Hawaii costs 45,000 frequent flyer miles (45,000 times .02) that equals $900. I checked today and I can purchase a round trip ticket from Portland, Oregon to Hawaii on Hawaiian Airlines (a Alaska partner) for only $440.00 (what am I doing here?).
What to use frequent flyer miles on if not for flying? Lodging and car rental can actually cost more then airline fares for some destinations, using your mileage to pay for these expenditures is a great usage of your miles (often one that's over looked by many travelers). There are now programs that allow you to purchase all kinds of merchandise including non-travel merchandise with airline miles. However (it always seems there's a but or however) the monetary value placed by mileage exchange programs may not always equal to the airline value of 2-cents per frequent flyer mile - "read the fine print".
Basic Recap- Frequent flyers miles don't usually expire as long as there is some activity in the account once every three years.
- Select mileage programs based on history of best performance.
- Look for programs that allow consolidation of mileage points.
- Find mileage plans that have affiliations with companies you frequent often.
- Redeem mileage points when costs of airline tickets exceed the 2-cent per mile calculation.
- Review the program's fine print - terms and conditions.
- While you may be able to assign mileage to friends or family members you do not own them.
- A perk for the business traveler? It stands to reason that many miles are racked up by the business traveler. The company that you work for may not see it as your mileage but their mileage - however mileage is awarded to the traveler not the ticket purchaser. When you leave the company do your miles travel with you? Something to get in writing up front.
- Consider donation of unused miles to charitable foundations and organizations.
- All experts agree that, upgrades to business or first class on international flights are the best use of air miles.
In doing research for this article I have found two websites that have been invaluable: From the frequent flyer guru, Randy Peterson whose tireless efforts of helping demystify the complicated world of frequent flyers programs through his books, articles and website WebFlyer. Thank you Randy for all your facts and helpful resources. I suggest for those who are interested in learning more to check out Randy's website and sign up for his e-newsletter.
I also wish to thank Tim Winship who is editor and publisher of FrequentFlier.com a website for frequent flyer program information and advice. His clean, easy to navigate, informative website assisted me in the compilation of this article. Randy and Tim are co-authors of a best selling book, Mileage Pro, Insiders Guide to Frequent Flyer Programs.
Other resources: How Stuff Works.com , and Wikipedia.org.
* The hot air balloon is often associated with Jules Verne's novel, Around the World in Eighty Days, however his character, Phileas Fogg, actually traveled around the world by train and steam ship and never traveled by air. The idea to travel around the world by air was dismissed as impractical...Well, of course there was no mileage program!
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Please let me know how I can assist you with your travel needs.
Cheers,
Annette
President & Co-founder
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