Why loyalty programs are dead — and why that’s good news for almost everyone

By | March 25th, 2013

Gui Jun Pen/Shutterstock
Gui Jun Pen/Shutterstock

Loyalty programs as we know them are dead.

After years of playing the game, frequent customers like John Peppin are saying, “enough is enough.”

Peppin, the director of a medical center in Lexington, Ky., said he wondered about the endless bait and switch airlines pull — demanding absolute loyalty in order to be treated with a little dignity.

He often flies to China on American Airlines, to which he has given his business in exchange for the possibility of an upgrade to business class.

“I’ve wondered if I spent the time looking for the cheapest ticket, perhaps I could afford those first class flights and still save money in a year,” he told me. This dawned on him recently when he had to change one of his flights and the airline rewarded his devotion with $1,200 in change fees.

“I wonder about your assessment of the frequent flier programs,” he says. Maybe, he adds, I’m right.

Well, guess what? I am right.

In the first few weeks of 2013, I’ve documented a precipitous decline in the value of award programs, which has left tens of thousands of frequent air travelers with next to nothing to show for their years of loyalty.

The changes aren’t limited to airlines. Hotels like Hilton and Marriott also restructured their loyalty programs, making it harder for some frequent guests to redeem their points.

The downgrades have angered travelers like Robb Gordon, a loyal Marriott guest. Just days after receiving a notice of the devaluation, he got another email from the hotel chain asking for his vote in an upcoming frequent flier award.

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“Now that’s chutzpah,” he said.

End of days for program apologists

All over the industry — and even outside of the travel business — customers are waking up to a harsh reality: loyalty programs are little more than a set of empty promises. The rules can change at any moment, the points may be impossible to redeem and at the end of the day, they don’t even belong to you.

My colleague Jared Blank said it best when he declared that technically, loyalty programs don’t exist anymore.

“They are not loyalty programs,” he wrote on his site. “A loyalty program would reward loyalty. Airline and hotel points programs do not reward loyalty; they issue a currency.”

And currencies, as he noted, can be devalued — which is exactly what’s happening now.

But you could be forgiven for thinking that there’s never been a better time to join a loyalty program. Board a flight, and a crewmember will offer you an application for an affinity credit card. Go online and it’s easy to find a blog dedicated to making the most of your miles.

Most of these loyalty program advocates are not in touch with reality because their judgment is clouded by money. Pay attention to the affiliate links on their sites and you’ll see that their rewards don’t come from the programs they promote, but from the generous bonuses they receive when someone signs up for an affinity credit card they hawk. (Also, look for their whiny, defensive comments at the end of this post.)

The cheerleaders will continue pushing these programs until the bottom falls out of them. A vast majority of them don’t care about you. They are the emperors fiddling while Rome burns. They are like the last men standing at the top of the pyramid scheme, insisting that everything is fine.

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But everything is not fine.

Good news for almost everyone

For most travelers, loyalty programs are not worth the effort anymore. That’s because, as I’ve previously explained, they have a negative value. Put differently, by the time you’ve collected the points, and gone through the effort of redeeming them, you will have spent more money than if you’d just bought the product without any consideration for loyalty.

Sure, for some very frequent, so-called “high value” customers it may still make sense to participate in a frequent-flier or frequent-stayer program. I think Delta Air Lines’ new program correctly identifies those customers and gives them the perks they deserve.

And I think that’s fine.

But the rest of us should pay no attention to award programs. At best, they’re a distraction, but at worst, they will warp your judgment and make you spend more money on a lesser product. Now, more than ever.

Are loyalty programs really “dead”? In the sense that they reward your loyalty, they’ve actually been dead for a while.

Maybe these programs are rewarding the companies that offer them with legions of uninformed customers, blindly spending their companies’ dollars on overpriced goods and services. Maybe they are rewarding a select group of bloggers with bonuses that buy their endorsement.

But they have not — and they may never have — truly rewarded the average customer.

We should be grateful that the ruse is finally over. People like Gordon and Peppin can now make a clear-headed decision about their travel purchase, based on value and convenience — not on empty promises.

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  • Emanuel Levy

    I’m in Southwest’s Loyalty program and I am very pleased with what they offer.

  • bodega3

    I had to double check the date as I thought this was an April Fool’s joke. Come one Chris, this is a bit silly. Loyalty programs are alive and kicking and I am staying for free in LHR with my Hilton points, flying business and first class for free with my United points. Oh yeah, first class to HNL, too, with my UA points. If you don’t want to be a member of any program, fine, but don’t put down what you don’t participate in.

  • PDUG

    I just don’t get Chris’ hostility toward these programs. I live near a United hub, so that is what I end up flying most of the time. If it costs me nothing to join their program, but I get miles and upgrades about half the time, why wouldn’t I join? They paid for my global entry application fee, have reduced or eliminated fees for Premier members, I enjoy getting free access to StarAlliance lounges when traveling, and in the past year I’ve had no problem cashing in miles to go to Germany, Vietnam, and multiple domestic flights. Chris’ bizarre obsession with bashing these programs really confuses me.

  • Steven Reed Sr.

    Looks like you called it correctly Chris, the defenders wasted no time at all defending these programs. Personally I beleive the programs are good for a FEW frequest travelers but to the vast majority of people they are a waste of time.

  • Alex

    I don’t see any legitimate reason not to join a frequent flyer/frequent guest program, provided they are free. Most of them require you to make a purchase to keep your account active. But, in some cases it’s as simple as buying a $0.99 song from iTunes via their shopping portal.

    The real question is if it’s worth funneling all your travel to a single airline or hotel chain, even if there are cheaper or more convenient options. Unless you’re a road warrior or live in a hub city, the answer usually is no.

    Northwest Airlines treated me very well when I lived in Minneapolis. But, after moving to Orlando, I started doing stupid things just to keep my status. (Flying from Orlando to Los Angeles via Minneapolis, for example.) I was thrilled when Delta euthanized the Worldperks program because I stopped worrying about “loyalty” and concentrated on cost and convenience. For me, a five-hour non-stop in coach is better than a 8+ hour ride in first class that sends me through Atlanta, Detroit, or Minneapolis…especially when you start worrying about factors like weather.

  • Carver Clark Farrow

    Chris’ dislike of loyalty programs reaches a near religious fervor. His position is that they are a bad enterprise for customers. That argument might have some persuasive power if Chris provided some numbers, i.e. statistical analysis, perhaps by a forensic accountant, to support his position.

    Otherwise, we merely have Chris unsubstantiated, albeit heartfelt, assertions.
    Why should I accept Chris’ belief over my own experiences?

  • Carver Clark Farrow

    But that’s the rub. Each person’s needs are different. I’m a big guy. 8 hours in first is substantially better than 5 hours in coach for me.

  • DavidYoung2

    Chris got it exactly right in that they are NOT loyalty programs, but more like bitcoins. They’re alternative currency that have a variable value, which generally trends downwards but can in some instances go up. They’re still worth collecting but realize that (1) some are worth more than others and (2) they have very little value, so don’t pay anything (or at least don’t pay much) for them.

    In my amateur opinion, Amex membership rewards are worth the most (platinum business can pay for real things at 1.25 cents per point, making them close to real money) and Delta Skypesos are worth the least.

    As long as people view them as Chris states, as a continuously devaluing alternative currency, they’ll be more likely make smart decisions regarding overpaying for a fare, rate or product to collect points. But I think they’re here to stay since they’ve survived for over 80 years. Anybody remember S&H stamps from the 1930s?

  • $16635417

    I managed the travel for a medium sized company several years ago. I was bombarded by travelers who insisted on flying one particular airline…even when it wasn’t the best choice of routing, let alone price.

    Several employees left to start their own companies and would regularly come to me for assistance in setting up their own programs and travel policies. All of a sudden, price and schedules were key and loyalty programs were not a factor. Of course they would accumulate miles in whatever airline they were flying at the time, but that was no longer a factor in the decision making process.

    Same with hotels, rather than going to a chain by default, we would use regional chains and smaller independent hotels that usually provided a better price and superior service. These were researched and visited prior to booking and the main complaints we received was that the traveler could not accumulate points in a worldwide program. However, we had reports of ex-employees requesting our negotiated rates at these hotels after they left the company. Again, miles/points were no longer a factor.

    I’d occasionally assist with personal travel as well. From my experience, I noticed that when it was the employers money there was one mindset, when it was their own it was another. In personal travel, employees were sometimes fine with Spirit Airlines, with full disclosure of the fees….but insisted on another airline when it was for business. (We rarely used Spirit for business travel btw.)

  • Part of Chris’ dislike, as far as I can tell, is that he’s been reading Flyertalk.com too much. Many of the strategies employed by the members only make sense for people flying 50-100k miles per year. When I used to fly like a madman, I too would take inconvenient routes, not to collect miles, but status. Back then, I flew roughly 105k miles per year. Just barely enough to qualify to top tier status. Why? Because of what was important TO ME. First class upgrades.

    The following mathematical formula best describes my travel

    …………………………..> Big guy + Big Seat = Happy traveler.

    To someone else, Flying in First may not be as important. But getting over that threshold meant that the next year I didn’t pay for upgrades, which, at $50 per 500 miles (later reduced to $25/500 miles), would have cost approximately $10,500

    Plus, with the system wide upgrade the family went to Europe. We paid about $1000 per ticket for coach and sat in business (then around $3500/seat), Another 10k in value.

    So was this 20k in value worth a few inconvenient routes. To me it was just a matter of dollars and cents.

  • I don’t read Flyertalk.

  • I’ve been a frequent traveler (out-of-pocket, 90% personal travel) since 1997, so I find the remaining benefits still hold some value for me. While I do agree that some of the benefits have been devalued, reduced, or removed, my preferred travel providers still provide to me some benefits I wouldn’t have otherwise, like TSA Pre-Check (that’s a biggie), shorter security lines, better/quicker access to customer service, award flights and hotel stays, earlier boarding of aircraft, free checked bags, free premium seating, occasionally upgraded flights and hotel rooms, etc. However, I won’t pay exceedingly higher hotel rates or airfares in the name of brand loyalty.

  • Frank Windows

    I must be living in an alternative universe. I fly exclusively on United, and in return I get better seats, early boarding (so I can stow my bag in the overhead), exemption from baggage fees, and the occasional seat up front. And I’m just now on a cross-country trip where I flew free, using miles I’d acquired in just a few months. And the fares are usually pretty close to what I’d pay at any other airline, especially when I factor in the schedule — I can’t always take the cheapest flight due to time constraints.

    I agree that the airlines ought to extend similar benefits to *all* travellers — part of the reason I maintain my status is to avoid the bulk of air-travel misery. Still, the program does what I ask of it and rewards my loyalty with free travel. I’m happy.

  • CarolinaLannes

    I guess there is more than one way of looking at the loyalty programs.

    I live in a country with pretty much one feasible airline (Air France). I don’t even LIKE Air France, but travel internationally with it at least 4 times a year. So I have their loyalty program. I don’t get upgraded to Bussiness or First, but get the Premium Voyageur. See, I would already travel with them, regardless. So I might as well get something out of it.

    I wouldn’t buy the tickets on Air France because of loyalty. But since I have to travel, why not enroll?

  • zpaul

    I think your colleague Jared DID say it best – the entry-level, or general member, tier is definitely NOT a loyalty program, but as you move into the Elite tiers the programs do value loyalty – for the short-term (STRESS short-term – you’ve already commented on the “lifetime” programs, so I won’t rehash that). I do find value in the benefits of mid- to high-level elite status, occasionally, which are nice. The program is free to join, my only serious options from where I live and to where I fly (Santiago, Chile to the US) are mainly oneworld carriers (AA and LAN – DL is the other), so whether I want to or not I find myself on airlines that earn miles into the same program 99% of the time. If I’m going to be flying the same airline alliance whether I want to or not, why not take advantage of the program? Now, the overwhelming number of people who are IN these programs and diluting the availability of benefits is another matter…

  • SoBeSparky

    With shoulder muscle and arm nerve problems, an economy seat forces me to endure pain long after the flight. (Of course, surgery with long recovery and modest results might cure these.)

    I’ll continue to be thankful for my free upgrades to first class domestically and my eight international upgrades to business class. I do not have an airline affinity credit card. I buy the lowest priced tickets as a leisure traveler, excepting the Chinese airlines to Asia. As an experienced and preferred elite traveler, I go through check-in almost instantly, and security in less than a minute or two.

    Discounts for frequent use or larger purchases are common marketing techniques everywhere. BOGO (Buy One, Get One) promotions are everywhere. I get big discounts from list prices with my CVS or Walgreens frequent customer programs. I used Consumer Reports buying services to buy my new car and my price for a new model was below “dealer invoice.”

    We are all looking for a bargain. If you travel frequently, it is impossible to ignore frequent flyer programs. If you spend individually over $5K to 10K a year on air travel for whatever reason, you are leaving some important perks on the table when you ignore these programs. That’s like buying only one of a BOGO offer. Stupid.

  • Tincanrider

    I changed careers involuntarily after 9/11, and fly only for vacation/family travel. I already book based on price, value, and convenience, and use the airline systems strictly as a easy means of tracking/recall/documenting air travel. If by the luck of the draw I am able to get a free ticket or upgrades, I just count my blessings. However, SWA gets the first shot at everything… Two free bags!

  • Kilkee

    I have seen Chris put down loyalty programs before and couldn’t understand it then and still can’t understand it. We have never felt that way.

    I do remember when my husband traveled weekly and was close to getting elite status he took some connecting flights instead of non-stops to get the extra miles. He no longer travels and those miles are long ago used.

    My husband and I are flying business class to Australia tomorrow and to London in June on American Airlines using our frequent flyer miles. American has been our airline of choice for many years and we have two Citibank Advantage credit cards which we use. We do NOT go out of our way to get miles. The miles just accumulate with various trips and use of the credit cards. We are doing those things anyway so why not take advantage of the trips that affords us?

  • Charles B

    The loyalty program that I belong to costs me $85/year. In return, I save about $200/year in baggage fees that I would have paid, plus earlier boarding, plus an extra $100 back every time I turn in 10k miles. That’s a win by my calculation. No, they don’t fit everyone. But that does not mean they fit no one.

  • Extra ail

    It is worth it when say, Atlanta, is your hub and, until recently, delta was your only viable option and you had to fly for business. Describes my spouse. I haven’t bought a ticket in several years for myself though it is getting harder and harder to book. We did have our first baggage incident in quite a while with delta yesterday (one lost bag and one damaged bag) so it will be interesting to see how delta treats one of its “elite” members.

  • ArtNYC

    I am still a United FF member. Used to fly them exclusively but not in the last couple of years. Their prices are a few hundred dollars higher compared to the lowest available and their schedule sucks. Sames goes for JetBlue which I flew exclusively to Las Vegas from NYC but not when they are a couple of hundreds more than other airlines. So, Chris has a valid point here.

  • curly

    You should make it clear that you are talking about airline loyalty programs. I have been delighted with my experience in Marriott Rewards hotel loyalty program and hope it never ends! There is no bait and switch, and all costs are covered by the points, including taxes.

  • William_Leeper

    I have to see it like you do, but while I tend to just be a pleasure traveler, I have both Hilton Honors, and Mariott Rewards, I have found that my rewards do add up (eventually). With that said, if I can stay at a local establishment for $40/night, or one of the chains I have rewards with for $100/night, I’m going cheap unless it is an area I am not familiar with.

  • whatup12

    agree 100% as a delta diamond and united premier plat, these programs treat me well. i travel a lot and in return i get short lines, upgrades, preferred seating, lounge access, etc. I don’t expect the airline to lose money on me by cutting my change fees, etc. I agree the delta miles are pretty useless but the united ones are great. and in fact, since delta gives you many more miles than other airlines for what you fly through bonuses, it likely works out that the difference is not as much as i thought. I do make some of the decisions that Chris mocks–i am in Rangoon right now and paid about 35 dollars extra to fly Thai airways (Star alliance) over Air Asia. But I used the lounge and picked up a silly number of diet coke/coke zero cans, fruit, etc–since hard to come by diet coke here. I don’t know why people would attack Chris personally…but also don’t see the point in attacking the programs that much. They make my life so much better–maybe it was better in the 70s and 80s…but they had to deal with disco on radio 24/7 back then.

  • Casa Mariposa Panama

    I agree with Chris’s take on loyalty programs in general. The simple economic principle for any business (hotel, airline, busline, cruiseline, whatever) is to offer the best possible product and/or service at the best possible price. This is how any company develops loyalty with its customers. “Loyalty” programs have been developed and used by airlines and large hotels (and I am a hotelier) because they know well that they cannot make each and every customer feel “special” because there are too many moving parts. Hence, loyalty programs offer the “allure” of better service, price, perks, whatever. The reality is, air travel is only tolerable at the best of times. (Just ask yourself: When was the lest time you had a really great flight?). If airlines would simply focus on what they should be doing best, which is moving people from A to B, then they should be able to offer great service at the best possible price. Similarly, if large hotels would simply focus on guest comfort and satisfaction, then they too should be able to offer the best possible “product” at the best possible price. Customer loyalty would naturally follow because the rational economic buying decision should be based on receiving the best possible product/service at the best possible price. Loyalty programs tend to skew the buying decision away from this simple economic truth because they offer some allure or perception of making program members feel more “special” than the next guy. Someone in an earlier post suggested a forensic accountant have a look at these programs’ efficiencies. Personally, I would like to see the economic cost of these programs to the companies who use them. What most people probably do not take into account is that the companies factor in the cost of administering these programs into the price of their product. The end result is a higher price for the same product than what would be otherwise in the absence of these programs. As an innkeeper of a small resort, I must earn each guest’s loyalty each day, each and every time. And IMHO, that is exactly the way it should be.

  • Charles

    I am a medium-range traveler. My frequent flyer miles have accumulated over the years and have purchased several tickets in the past and I have about 75K miles now. So, it works for me. My daughter is a rare flyer. She has only flown a few times and had only a few thousand miles, so she is the low end of the scale. I doubt she would reach the mileage for a free ticket for many years. So, she spent her miles on magazines. Never have we ever chosen a flight because of miles, but, like many people, there is an airline we are more likely to fly just because it works that way.

    Jared Blank is right when he says that these programs are not really loyalty programs, that they are issuing a currency. Currency=money. They are handing out money. It may be not a lot, but it is money. My recent trip to DC netted 2,000 Skymiles. That’s just $20. But, I could use that to buy a magazine or let it accumulate and eventually I might get a ticket or a few more trips and I can apply that to buying a ticket. Why would you not take the currency? What is it really costing you? I’ve yet to hear a single downside in all of your arguments about frequent flyer programs. You link to a single incident of someone letting their miles expire and conclude they have a negative value. If you think they are worthless, why bother with trying to get them back for someone. You indicate they can be taken away. Again, maybe the airline might be do this, but I think it is unlikely. Even so, what did it cost you? If you say it cost you the miles, your argument falls apart.

    I’ve noticed that you complain that people resort to personal attacks and don’t have a reasoned discussion on this topic, but I have seen many posts with legitimate arguments against your position and I’ve yet to see any real debate on the topic or even an attempt to rebut those arguments. You find the few people who agree with you (often only partly) and cite them as your reasoning. But, you don’t provide a single reason why you should not be entering a simple number for each of your family members when you fly and accumulating miles that maybe you’ll never use, but cost you nothing and maybe you’ll just get a magazine subscription (or several) or maybe you can apply them to a future flight. I think a good analogy is a person who buys something and is offered a rebate, but never sends in the form.

  • mytimetotravel

    I’m going to say the same thing I’ve said the other times Chris has put down FF programs. I have flown RTW three times in business class thanks to AA FF miles. I now have enough miles to do it again, and 60,000 of those miles were for just getting the affinity card I use to get miles. I do very little domestic travel and most of that is on JetBlue or Amtrak (where I also have loyalty accounts). I could get 1% cash back with Cap One instead, but at 1 cent a mile I think my biz class tickets are a bargain.

  • Casa Mariposa Panama

    I would love to know how this turns out for you.

  • TonyA_says

    I think y’all are missing Elliott’s point. Sure each and every one of us has a (personal) opinion about Frequent Flyer Mileage Plans but they all pertain to US (ourselves). But Chris points out the (specific) case of Dr. John Peppin of Lexington, KY. Dr. Peppin is (or was) a loyal AAdvantage member and questions why American does not reward his loyalty by (not) giving him a break on change fees.

    This is a valid point. How come he does not get a get-out-of-jail free card for his loyalty?

    The next question is – should he really be loyal to AAdvantage or Oneworld for the route he is taking?

    I am not sure whether his destination is Shanghai (PVG) or Peking (PEK), since that might make a difference.

    But I do recall the AA introduced flights to both cities in 2011 from ORD (Chicago). The ORD-PEK flight schedule is horrible (arrives PEK at 1130PM). The ORD-PVG is a bit okay (arrives PVG 305PM).

    I remember routing my clients through ORD via China to other parts of SEAsia during peak season because these AA flights were relatively empty. I am not sure of their utilization today since I have shifted my MidWest passengers to Cathay Pacific, Korean, Asiana and ANA using ORD gateway.

    Anyway a $1200 change fee with $250 penalty is about $850 in fare difference (in economy class). That’s about a 3 booking class upgrade roundtrip or 4 class one-way in base fares. While I do hold an AAdvantage membership, I am not that knowledgeable about using miles to offset change fees (as I have never done so). But the question why loyalty does not reward flight changes stands. Why not reward loyalty with change perks?

    That said, I think Dr. Peppin should open his eyes to other airline options. Delta and United actually have lower fares to Shanghai from Lexington than AA. Their outbound flights are just as direct (one connection) as American’s. But United has a much better return flight. It has the only one connection return flight to Lexington that does not require an overnight layover. AA’s return options are actually horrible (29h40m with overnight at ORD) unless the passenger takes an extra stop at Narita (PVG-NRT-ORD-LEX).

    Finally, Cathay Pacific and Korean Air have $100 change fees for this route. Granted the passenger has to fly via HKG and ICN, respectively. But Korean Air (KE) provides several routing options – via ORD/ATL/DFW using AA to ORD/DFW or DL to ATL. Also KE’s fare steps are about $100-200 per class; less steeper than AA’s.

  • TonyA_says

    Re:I am in Rangoon right now.
    Are you a recipient of a Myanmar RGN Mistake Fare :-)

  • “Anybody remember S&H stamps from the 1930s?”

    You don’t have to go back that far – I remember helping my mom fill out those stamp books in the 80s! Not only was our reward a “free” toaster, we lived in a small town and had to drive 40 miles to the nearest redemption center to collect it!

  • TonyA_says

    Quick Question – did you drop an “M” in your name? Weren’t you Extra Mail, before?

  • Deb

    Overall, I would say that loyalty programs are not worth what people think they should be and are certainly not in the consumer’s best interest however, my husband and I were able to use up our United miles last Fall on a trip to Hawaii. We were flexible with dates and route so that helped us find flights using miles and, though we were anxious to use up our United miles and never fly them again due to past travel issues, we actually had very pleasant flights with attentive, friendly staff and would consider flying them again…once we use up our American miles. :) BTW, American did offer me an amazing Compassion Fare when checking recently on an emergency trip to attend to a son injured at college. I was surprised…it was a better deal than using miles for this legitimate need.

  • “But Chris points out the (specific) case of Dr. John Peppin of
    Lexington, KY. Dr. Peppin is (or was) a loyal AAdvantage member and
    questions why American does not reward his loyalty by (not) giving him a break on change fees.”

    That’s a valid question, and while I do find it interesting that loyalty perks don’t include breaks on change fees, I’m reading a lot more to Chris’ post than just this one question (though I might add – your loyalty CAN get a change fee waived on occasion, but you have to call and ask for it, and hope you get an agent willing to bend the rule for you). His entire diatribe against loyalty programs over the years is that they provide zero value to participants, and benefit only the airlines through questionable behavior like mileage runs or intentionally booking a more expensive fare to earn status on a specific airline. Whether or not an FF program provides value is going to depend on each person’s subjective opinion of what constitutes “value”.

    To answer your other question, no, you cannot use AAdvantage miles to offset a change fee, though I have to wonder if that wouldn’t be a smart idea for an airline to test.

  • TonyA_says

    It’s about maybe getting something for maybe nothing.
    I am a shrewd buyer (since I value my, my family’s, and my company’s money).
    My decision is based on a combination of price and comfort.
    But I always get miles for whatever I fly (unless the airlines does not belong to an alliance) even if I have no idea what they are going to be for in the future.
    Personally. I do not care for the FREE AWARD FLIGHTS since they are quite difficult to score for the season (and destinations) I want to fly.
    But maintaining some elite status is worth it (IMO) to avoid hassles. Of course, you can get lucky and be upgraded, too. That’s nice. But, for me priority boarding and priority luggage is probably the most important benefit of these airline programs.

  • TonyA_says

    I hope the airlines are listening. Give your loyal fliers a break on change fees (shouting).

  • TonyA_says

    Hey Sparky, did you mean EXCEPT Chinese airlines (because of quality issues) or did you ACCEPT them for their low fares? I’m curious where you got all these BC upgrades. Care to give us tips?

  • whatup12

    some may argue that the only fare type (for work not play) to RGN is a mistake fare. diet coke helps though!

  • bodega3

    Having sold aitrline tickets and assisted many passengers who belong to a carrier’s frequent flyer program, I can tell you there are values to belonging besides earning the miles. But if you think they are a waste of time it is worth then you don’t have to join. I sign most of my clients up and even with one flight it has paid off for a few.

  • Mel65

    When I began traveling fairly regularly for work, about 7 years ago, I joined ALL of the travel point programs. I don’t consider them loyalty programs, I consider them frequent flier programs. I buy the cheapest ticket and my account numbers are already preloaded in my online travel profile for my company so I get whatever points for whatever airline I’m flying, whichever hotel I stay at and my rental car. I don’t adjust anything I do to try to earn points, they sort of … collect in the background, just in case. If I get enough to earn something, awesome, but if I don’t, I have lost nothing by signing up.I have earned enough to fly my college-age student home a couple of times and the process was *knock wood* pretty simple although his flight itinerary wasn’t the most user friendly. But, he’s young and it was free! :) I don’t get the people who contort themselves and their travel plans around a single airline or rental agency or hotel, but if they choose to play that game of chance, they need to not complain when the company does what they’ve said all along they have the right to do….and they yank the points, expire the points, devalue the points or flat out cancel an entire program. *Shrug*.

  • whatup12

    Hi TonyA–i think you are highlighting the importance of a great travel agent to give you advice like this. I do 300+k miles per year and am currently on
    IAD-CDG-ARN-CDG-NIM-OUA-BOY-ABJ-IST-BKK-RGN-BKK-NRT-JFK-BWI over about 2 weeks. Without my travel agent, I would be a lost soul. But I do put some parameters on my trips–generally staying on star alliance or skyteam for long haul and when good options exist. do regional airlines when needed (asky, air Burkina, Mongolian, etc etc etc), but only as needed. i don’t expect a break on change fees, but also know that when flights get cancelled or changed, there are two good things in my corner. 1) airline wants me to be happy 2) travel agent who provides concierge service watching my back. Both of these help make 300k miles just a little more comfy.

  • bstewart

    I travel mostly for business, and typically fly out of a small commuter airport rather than going to a large hub airport that is 90+ miles away, especially if I have an early morning flight (getting into that city with their rush hour traffic means that I need to leave my house at least 3.5 hours before my flight, 4.5 hours for an international flight). A 9:00 AM departure time for an overseas flight means a home departure time of 4:30 AM. The commuter airport I fly out of only has two options, American and United. I also make most of the travel arrangements for my office colleagues, and I typically make those arrangements when logged into my frequent flyer account. I have been Gold with United every year for the past 5 years. I don’t get upgraded very often, but that isn’t really what matters to me. What does matter is that I get to board early and will most likely have overhead bin space to store all of the electronics that I have to travel with for business (and which I cannot check or ship in advance). I also like the fact that I can call an Elite Service Desk number for support when travel emergencies arise (I typically am talking to a person within 3 minutes). This was especially helpful when I had 3 colleagues meeting me for business, and they were going to be delayed because of weather in Denver. The gate agent told them that they could not get to their destination for 2 days because all of the flights were full. They went ahead and boarded the flight after calling me. I got on the phone, and by the time they got to Denver I had them booked on the next flight and they got to our meeting on time. Those are mainly the times that I use the services, and that is why my travel is almost exclusively on United. I know that my situation is different from many other travelers, but the United loyalty program does work for me.

  • Joe_D_Messina

    But Chris points out the (specific) case of Dr. John Peppin of Lexington, KY.

    Except he doesn’t limit his opinion to that one specific case. Later on, he says that loyalty programs make no sense for anybody except “for some very frequent, so-called “high value” customers.” That’s absurd. You don’t have to fly all that much to get benefits from these free programs. Like several people have noted, living by a hub and traveling any degree at all makes it a no-brainer to join one of these. It’s the equivalent of getting the free card for your local grocery store. Do I have one of those because I’m brainwashed into believing they have the best groceries and most unbelievable deals anywhere? No, but I shop there all the time anyway because of it’s proximity and know that I’ll get some value out of a program that cost me absolutely nothing.

  • SoBeSparky

    I do not fly Chinese Airlines on international flights. Safety is ok but English is my language and I like extensive English announcements, widest assortment of in-flight entertainment, and magazines. I fly the the Chinese carriers all the time on domestic routes, of course.

    I am an obsessive compulsive disorder (OCD) ticket shopper, with standing alerts at a minimum of four different independent ticket sites. Sure I get a lot of junk email, but I also get to see the fare sales the airlines don’t want to feature on their own sites and don’t advertise. (Many times they are doing a competitive fare match and really don’t want to sell the seats.) I search the mileage-run fare forum at FlyerTalk.com http://www.flyertalk.com/forum/mileage-run-deals-372/ for great deals, not to make mileage runs. I fly American out of Miami as an Executive Platinum, eight free international BC upgrades a year. (Thank you Aadvantage FF program!) Booked at least two months in advance, and asking about the waiting list when I book (Thank you Aadvantage ExPlat telephone desk), I only missed one upgrade wait list about five years ago. Just like on domestic routes, many cancel their refundable BC reservations within a week of departure. Although subject to change with the “new” American, the well documented waiting list process means early birds with status get the worm as opposed to last minute bookings, even when at much higher fares.

    There are a lot of other ways to turn the terms and conditions to your favor. First and foremost, treat the airline employees with the respect all humans deserve, and you will be surprised. Demanding and pushy people need not attempt to get a discretionary perk. DYKWIA (Do you know who I am) arrogant customers go to the bottom of the “most favored customer” list when discussing options with an airline employee.

    Of course, I avoid all peak periods, such as holidays. No point to try, and I do not like fighting tourists elbow to elbow anyway. I fly off peak days, which means avoiding typical business flights during off season and weekend flights in tourist season. (All flights are full, but off peak flights tend to attract fewer FF status customers in my experience.) I sometimes fly a more difficult routing, but taking only a few hours more. Flying domestic first and international business is just a pleasure when your expectations are fairly low. In fact, I enjoy the unique experiences with interesting seat neighbors many times. I have met judges, wealthy heiresses (verified), clothing designers and importers, and just plain interesting people who got upgraded or paid full fare for their seats. So what if I had to transfer one more time, or the trip took five hours longer! I was eating and chatting and sleeping (in comfort) my way to the destination.

    I guess my “rules” for using the system to enhance my lifestyle is to: 1. Stick with one airline FF program, if you can be flexible on schedules to get the best deals. 2. Be constantly knowledgeable on FF programs, hard and fast rules and fares. 3. Be flexible, very flexible. 4. The Golden Rule. The employee did not delay the flight or cause the air turbulence which resulted in wet pants, or make the FF rules. But a bit of simple humor with people harassed each day can improve the spirits of that telephone contact. Be self deprecating. You will stand out amongst the thousands whose world revolves around the an insignificant entity, “me.”

    (This is generalized advice, certainly not focused whatsoever on Tony A who is experienced and savvy.)

  • Amy Engelhardt

    The only airline’s program that works for me right now is VIRGIN, precisely BECAUSE it’s not set in stone. The amount of miles needed for a free ticket changes based on the popularity and availability of the route – and is NOWHERE NEAR 12,500 per leg. Then again, Virgin is the only airline with actual customer service today, so it’s not surprising….

  • Sankarshan Das Adhikari

    One should approach a frequent flier program like a businessman. If you profit by your membership, you participate. If you lose by your membership, you do not participate. I am profiting royally by my membership so I stick with it. My wife and I get many international airline trips per year for only the price of the taxes. Plus every time I buy an economy ticket I get upgraded to first class. I would be a fool not to participate. If others lose by their participation, they are wise not to participate.

  • TonyA_says

    You sure have Miami to China (and back) “optimized” already. In your case MIA is an AA hub and PVG/PEK are AA nonstop destinations for ORD and PVG for LAX. I don’t think you can find a better combination than what you already have so it makes a lot of sense to master the AAdvantage system like you have done. You are definitely one great example proving how one can benefit from a Frequent Flyer Plan.

    You might fit the description of a hub-captured passenger (Miami). But you made the best out of that limitation. Your greatest advise is to stick with the FF plan that works for you. Thanks for the detailed explanation. I am sure many folks here would appreciate it.

  • Casa Mariposa Panama

    You don’t need a forensic accountant. Your own story below is all you need to look at. You claim to have saved $20K or so through your loyalty program. If this is true, who do you think compensates the airlines for this “lost” revenue to them? The airlines sure don’t lose it out of the goodness of their heart,and you did not have to pay it, so who does? The answer is simple: this “loss” is simply “factored-in” to the cost of other tickets. So while you are busy saving all this money, other poor souls are paying more than they should otherwise. Chris was diplomatic enough not to state this, but this is one of the problems with loyalty programs. And it is exactly why these programs only benefit a select few.

  • TonyA_says

    That’s more than 27k miles in about 2 weeks! You beat me by 5k miles 2 weeks ago.

    WASPAR 3850-AT PARSTO 926 STOPAR 926 PARNIM 2455
    NIMOUA 262 OUABOY 208 BOYABJ 410 ABJIST 3200
    ISTBKK 4644 BKKRGN 372 RGNBKK 372 BKKTYO 2869
    TYONYC 6737 NYCBWI 179
    TOTAL 27410

  • Ian Parrish

    I find this article a bit on the extreme side of the argument. These arguments apply to the very casual flyer, ones that don’t fly enough for airlines to recognize their loyalty. When one hits the first tier of loyalty, usually 25K/year, they get some decent benefits; at 50K/year the benefits get a lot better; and 100K/year, benefits with upgrades are quite significant.

    Basically, it comes down to everyone’s individual personal choice and values. For me, I fly in the 50-100K mile/year range. I don’t go out of my way to fly United, but I’m willing to pay a little extra for it. That’s because I get express security, early boarding, upgrades half the time, better treatment when weather or mechanical problems hit, etc. I realize that my frequent flyer miles devalue with time, which is incentive to use them. I’ve used them to fly myself and my family in the US and all over the world in the last few years without any trouble.

    Now if I couldn’t hit the first loyalty tier, I wouldn’t get many of these benefits, and I might agree with Chris. But why rail against them when they do in fact reward some people in a useful way? I don’t think of myself as a “whiny, defensive” person, but rather a frequent traveler that evaluates rewards and benefits provided by frequent flier programs versus additional costs of loyalty. I come to a conclusion that works for me. Maybe, a more balanced article is in order?

  • whatup12

    and how it relates to the topic at hand…my amazing travel agent secured upgrades on IAD-CDG-ARN (on air france, the upgrade cert gets you to premium which is pretty good), ABJ-IST-BKK (Turkish airlines business was nice), and when I head home all the way from BKK-JFK upstairs on 747. I can’t buy business fares as am academic–so this makes a tough schedule manageable! And at JFK, they have the diamond service where they pick me up planeside and walk me through. as a Canadian, this can save me up to 2 hours and they walk me through every line that i might face. etc, etc. etc. ie, these programs make me life that much better… I like Chris’ blog, but as many have said before me, this argument doesn’t make much sense. Others in my line of work who don’t pay attention generally are always booking first/business and then it really doesn’t matter much. And they are shocked when they don’t make status… I tell students and younger colleagues to ensure they make status…ie, focus their flying. And if I was to see Chris in NIM, he would get it too.

  • whatup12

    right–the elite line! i had a BWI-EWR cancelled and was on my way to ARN. when they cancelled BWI-EWR, the gate agent asked everyone to line up to talk to him. i just phoned united, and they rebooked me BWI-ORD-LHR-ARN within 20 minutes. I went to another desk, they printed boarding pass and boarded about an hour later…people at the back of the line hadn’t even talked to agent yet and I was boarding. another frequent flier did the same thing, and they organized transport to IAD and then he flew to LHR…amazingly we were both heading to ARN. All to say, the elite line is GREAT.

  • If airlines truly wanted to build loyalty, they would better their customer service at all levels. From the ticket purchase to the flight to getting your baggage at the end. That is the best way to earn and build customer loyalty.

  • TonyA_says

    Going back to Dr Peppin’s case. Assuming he regularly travels Lexington to China (and back); about 14.7K miles R/T.
    After about 7 trips he will be Executive Platinum. 4 trips he will be Platinum on AAdvantage. All he has to do is sign up (for free). He would certainly get a lot of privileges mentioned here http://www.aa.com/i18n/AAdvantage/eliteStatus/elite-benefits-chart.jsp
    Obviously this is a no brainer. But let’s focus on what he was asking – an itinerary change for FREE or at a discount because of one’s elite status. To be honest with you, the only way I know how to do that is to personally know someone at the RES desk. (Maybe Special Services Desk would give him a break). Of course his inland origin (Lexington) also causes a complication for other foreign airlines (options) because they do not control AA or UA or DL’s local inventory. So it really did not matter which Mileage Plan he belonged to. Chances are he was not going to get it changed for FREE.

  • TonyA_says

    I am quite confused with your post. Why did the airlines LOSE by giving Carver and upgrade to Business Class? Also, is there anyone subsidizing Carver’s upgrade? Can you please explain your points. Thanks.

  • Casa Mariposa Panama

    Well, if Carver got an upgrade by using his points (or whatever) without having to pay cash for the upgrade, and someone else who might otherwise have paid cash for those seats did not have the opportunity because of Carver’s upgrade, did the airline not essentially lose that revenue for those seats? My point is, someone has to pay for those seats one way or the other, and you can bet the airline is not going to lose any revenue out of the goodness of their heart. Therefore, it seems to me the only way the airline can recoup that revenue is to spread it around amongst other ticket buyers.

  • MoCo

    Chris, i appreciate your frustration, but I think it’s time we travelers blame ourselves, not airlines. Let me suggest a good simple system:

    I figure the value of an airline mile is about 0.75-1.00 cents based purely on the free ticket. Usually a 25,000 mile award gets you a $200-$250, though you still pay a booking fee.

    The intangible benefits, like status and upgrades, I guess you can make up your own number, but it can’t be too large, right? Let’s say it’s another 0.75-1.00 cents per mile, and I think that’s being generous. So the total is 2 cents per mile MAXIMUM.

    So, if you take that rule into account, when flying a 3000 mile cross-country flight, pay no more than $60 premium to get on your airline of choice, and that’s being generous. 1000 mile short hops, dont pay more than a $20 premium. That’s all.

    Honestly, I think if someone is shelling out $200 or more to get on their chosen airline, as I’ve seen so many times, then that’s simply a very poor decision.

    There’s nothing wrong with the airlines gaming things as they do. If we used good judgment about when to apply airline loyalty, and when it’s not worth it, then airlines will get exactly as much loyalty as they give us.

    In short: crunch the numbers, do a simple cost/benefit analysis, and give the airlines only as much as loyalty as they give you. That’s all there is to it.

  • Chasmosaur

    While I don’t think they necessarily reward you well, if you’re in that situation – as we are with Delta, living near MSP – then it can’t hurt. We don’t expect much from the rewards program, but we can pay for the Sky Clubs with points, and we get earlier boarding. The former helps us skip expensive airport food or WiFi when we just want a bagel and to quickly check our e-mail before we board; the latter helps in the modern-day scrum for OHB space.

    Do I wish they offered more than that? Yeah. But if you know what you’re getting into, then you know what you’re getting out of it. My husband flies for business, so the small perqs and occasional upgrades do help improve his flying experience.

  • karlakatz

    Well, Mr. Elliott, I did listen to your “direct-from-Delphi” prophecies of last year, regarding airline mileage accumulation.

    I cashed in all but 8,000 of my miles for my 2013 Christmas sojourn. To wit: 1st class (RT) dinner flights for 2 to Phoenix (cmh-phx); 14 nights at the Royal Palms Resort (Casita-class suite); luxury auto rental (Budget; Lincoln MK-something-or-other); and even snagged a private rail-car for a 4-hour Verde Canyon tour… and, still have 8,000 miles for magazines, etc.

    Of course, I will never let my loyalty (gotta get those miles) mind-set guide my airline purchases ever again.

    With all the changes coming, I’m glad to dump all those miles for a fun couple of weeks.

  • Casa Mariposa Panama

    Hey Carver, I guess you would never fly “Derrie-Aire” then.

  • disqust101

    Of course loyalty programs are worth belonging to – but not if you play nice. If you are a FF type, who signs up and churns CC regularly, you can get millions of miles on the cheap. I just started in the game in October. Now have 1.7MM miles with almost a negative net cost thanks to some very attractive perks on some of the cards (and good usage of cashback cards).

    What are my spoils so far? 11 nights in Paris at Park Hyatt Vendome in September – 5 star hotel with $1000 night base rate rooms. Lie flat business first on United from SFO to Paris. Next April, Cathay Pacific to Bangkok/Koh Samui in First suite and 8 nights in Conrad Koh Samui. And I still have 1.2MM miles/points remaining – some of which are for a trip to Rome/Florence in either 2014/2015.

    Turns out that it’s my time to go on vacation that has become the limiting factor. Never dreamed that would be the “problem”. The upside is my trips are more luxurious – and far lower cost – all thanks to “loyalty” programs and CC bonuses.

    But if you aren’t getting CC bonuses and are just a regular Joe getting points by paying to fly/stay at hotels, then you are getting ripped off.

  • sunshipballoons

    Chris’s objection to loyalty programs makes sense for people with no self-control or no sense. Clearly: don’t spend an extra $200 on a ticket just because you’ll get miles for that one on an airline where you are closer to a free ticket. There probably are a lot of people, though, who can’t follow that advice, so they should not be members of loyalty programs. But, from the perspective of a rationale consumer: always buy the cheapest ticket; join the loyalty program for every airline you fly on; and if you happen to earn a free ticket or upgrade, great! Otherwise, no worries, you got cheaper tickets.

  • TonyA_says

    According to Carver, he used his AA Systemwide Upgrade(s) to Europe.
    An AA Executive Platinum member gets eight (8) Systemwide Upgrades (good for a year or so).

    Suppose Carver wants to take 4 passengers from LAX to CDG and back 01OCT-10OCT. What are his options on sitting in Business Class on AA.

    (1) Buy a discounted ticket outright. That will cost him $3588.00 (Fare Code:INA5E1G1) per passenger

    (2) Try to get an AWARD ticket. Right now that will cost him 200,000 miles + taxes and carrier imposed fees ($2.50 to $700.00 USD per person per award) per passenger. I doubt he has this many miles for 4 of them.

    (3) Buy an Economy Ticket for $1252.40 (Fare Code: NKXE2NA) and pay 25,000 mi. + $350 per direction. Subject to Availability. Carver will need 200,000 miles for all 4 of them. Maybe he does not have this many miles.

    (4) Buy the same Economy Ticket as in #3 and use his 8 systemwide upgrades for all the 4 passengers.

    Carver will not necessarily get the upgrades to business class since this will depend on seat availability at the time he makes a reservation. Obviously if AA clears his upgrade immediately, it means that AA is forecasting that paid demand for Business class seats will be low for that season (meaning they do not expect Carver’s group to displace paying passengers). But chances are AA will put Carver’s passengers on a wait list so AA can still sell those business class seats till close to departure.

    Okay, given that AA will only clear Carver’s passenger when it feels it does not have higher value bids (payers), then what exactly is the airline losing?

  • TonyA_says

    Even the best (5 star rated) airlines have Frequent Flyer programs. How do you explain that?
    Apparently being one of the the best airlines is not good enough. They also have to have a good FQTV program. Savvy buyers now that. Just enter and compare airport lounges and you can tell which ones matter.

  • Asiansm Dan

    As it’s very hard to get a decent seat on a decent date with a decent connection against a decent number of mileage required, loyalty programs are really at its terminal phase. All that with the sudden expired miles on less frequent travelers and the skyrocket high taxes, Airlines fees and Surcharges . Unless you are Elite members, upgrade is now thing of the past.
    Nowadays. I don’t make any milesrun anymore since Year 2000 to keep Elite, part of it is blame to the high taxes, Airlines fees and Surcharges. The debunk of the ticket price render the free ticket worth much less than before. The Loyalty to an alliance is no more the predominant criteria when choosing to buy a ticket, but more the connecting hub, the services, the type (or the degree) of Flat Bed on Business Class.

  • Cybrsk8r

    I would guess that for 99% + of travelers, loyalty programs are a waste. This is because the only “loyalty” that goes on is your loyalty to them, and they’re going to pay as little as they can to get it. I have never, nor will I ever, subscribe to any type of loyalty/reward programs. On or off the ground.

  • TonyA_says

    People need to understand that the bar (to being an elite) is quite low, mostly starting at 25,000 miles. A simple off-season trip to Asia for about $1.2k will chew a big slice off that 25k miles. Credit cards will also help. The basic benefits (those you do not need to compete for) can include free baggage check in, priority seating, baggage and boarding, use of lounge, etc.even if you are never upgraded or get a free award trip, is well worth it.

  • Casa Mariposa Panama

    Well, he apparently did get all the upgrades he requested, because he said he saved $20K. Therefore, my point is that if he got all the upgrades he requested, then those seats were not available to anyone else who may have been willing to pay cash for them. Since that could not happen, then the airline faced losing this revenue from the “normal” channels, and thus would make it up somewhere else. I do not think for a minute that airlines will lose potential ( or real ) revenue, even for a premium-plus, triple-platinum, gold-star, or whoopdeedoo loyalty member, under any circumstance. In this regard, in my opinion, loyalty programs, while rewarding a select few, penalize most others in the form of higher-than-normal prices for seats.

  • Lindabator

    You can also donate them to some great causes – that’s what I do when I find a particular airline didn’t rate many miles for me – so no loss to them, none to me, and a definate bonus to the charity!

  • TonyA_says

    My point is there we NO CASH BUYERS, that is why the airline gave him the seats.
    Airlines are not dumb. They are very greedy. Many of the upgrades we are talking about only clear a few days or hours before the flight. And that 20k savings, I don’t think that is an accurate figure. Look at the price difference in my post (less than 2.5k per pax).

  • Dmitriy Pint Bekkerman

    I have used United Airlines loyalty program and pretty happy with it. I rank most of the miles from Continental Airlines but yes I am glad with the selection of seats and options (e.g. non-stop flights, any day of the week, reduced miles awards, etc) United has to offer.

  • Casa Mariposa Panama

    Sorry, I do not buy your argument (except I agree that airlines are not dumb). You mean to tell me that Carver would have waited until only hours before the flight on a vacation to Europe to get a confirmation of an upgrade? Ridiculous. And the $20K figure was not mine, it was Carver’s.

  • TonyA_says

    You don’t have to believe me. You can google flyertalk aa swu and read peoples stories. Most upgrades begin clearing T-72 hrs. And yes I believe Carver’s numbers are on the high side.

  • disloyal

    very well put.. the value of loyalty is negative.. you could be collecting cash back on credit cards all along. 2% of $100k = $2000. So you “bought” that award ticket for $2000 (most likely you won’t even find it, the miles will go unused and everybody profits handsomely by selling you empty dreams.

    Oh and all the travel bloggers pimping credit cards.. I’ve heard of something called conflict of interest.

  • AUSSIEtraveller

    some smaller airlines in Australia are now offering BUY 10, get 1 FREE, with no restrictions on when FREE ticket can be used & free ticket can be used on any sector. Free ticket can even be used before the 10 tickets paid for are used. There are generally no refunds of any sort, on these tickets, which is standard here except for stupidly expensvie full economy tickets.
    It keeps it simply & virtually no rules to comply with.
    NOTE: for business, such airlines offer discounts on bulk buys of tickets up front, with the more you buy the cheaper they get. All have an expiry date, but even this can be extended for a fee, so if for some reason, don’t use them all in the allotted period, they are not wasted.
    2 types:- 1 for individual only (name can’t be changed) or 2. anyone holding the prepurchased ticket can fly, as long as their is a seat.

    Complicated frequent flyer programmes cost a small fortune just to administer. There’s a real backlash in Australia right now, about call centres answered in Manila, Fiji or somewhere in India or Sri Lanka, with people answering the phone often not having a clue.

    Virgin Australia have stated that they are bringing their call centres back onshore, as even though they cost 10x as much (Australian wages & salaries are some of the highest in the world. (Australia miniiums are much higher than U.S. minimums) because 1, they don’t annoy customers & 2 they create more business, when the person answering knwos what they are talking about.

    Call to American Airlines in Australia are answered in Fiji, by a 3rd party company called Mindpearl, who will tell you anything to make you happy (often they will say, yes you can do that for no cost, call your travel agent & then agent says who told you that-no way that’s correct)

  • AUSSIEtraveller

    the notion that because someone is a frequent flyer changing flights should not cost anything is just plain stupid.
    If you buy a cheap ticket on a flight & then change time or date to a flight that was never cheap eg. peak hour, there’s probably going to be a change of fare !!!
    What was implied below is… I can buy a cheap ticket (when no one wants to fly) & then i should be able to change it to a flight when everyone wants to fly, for no cost !!!
    If people could do that all airlines would go broke in a microsecond.

  • bettyblanco

    I signed up for USAirways and Priority cards. Took a free flight to Vegas, and got a free suite at the Palazzo. Where did I go wrong???

  • cmbaker69

    I still believe it’s worth belonging. However I’ve always belonged to every program and have always shopped for the best price, not my “favorite” program. Membership does provide access to special sales and the occasional free flight or night. I’d never base a flight or hotel purchase just on its program.

  • Carver Clark Farrow

    That’s not how upgrades work. Most airlines use various predictive and statistical models to determine the likelihood of a seat being sold. Only those seats which a likely to be unsold are eligible for upgrade. If an airline believes that it will have five unsold business class seats on a given flight, it may release five seats for upgrades. Its called capacity control. That’s why you can’t always use miles to get a free seat or an upgrade.

  • Carver Clark Farrow

    The numbers are accurate. This was Christmas 2006. I remember it well as this was the first time the family flew together for a European Trip. This occurred during Christmas vacation and we had a very limited window of opportunity to make the trip. The next year, when I traveled solo, I found a business class ticket for $1800RT, as I had greater flexibility.

  • Carver Clark Farrow

    I’m sure you found that hilarious

  • steve rabin

    I think the programs have become too successful, which is why the companies are devaluing them. With razor-thin margins in the current economy, the companies can’t afford to give away the product, even to their most ‘loyal’ customers. But yet they continue to dole out the miles/points, and we continue to take them. The overwhelming majority of points never get redeemed, but they are held as a liability to the companies until they either expire or are used. But the companies know this, and get you roped in to believe you can use them (and many people can, just not the majority).
    Using AA as an example charging a change fee to a ‘loyal’ customer–they are in bankruptcy and need to collect every dime they can…not saying it’s right to do this to someone like this, but they’re doing it!!

  • Carver Clark Farrow

    I concur with Chris 100% that these are not loyalty programs. I see them as marketing programs designed to direct you to spend your travel dollars with their travel provider.
    I think the best way to look at them from a consumer standpoint is like any other investment. An investment (say highly volatile technology stocks) may be criminally inappropriate for a retiree on a fixed income, but perfectly appropriate for a 25 year old. Doesn’t mean that the investment is bad in any way, it just requires common sense and good judgment.

  • TonyA_says

    By the way, I checked your statements:
    (1) my amazing travel agent secured upgrades on IAD-CDG-ARN (on air france,
    the upgrade cert gets you to premium which is pretty good)
    (2) when I head home all the way from BKK-JFK upstairs on 747. I can’t buy business fares as am academic.

    I assume you are holding Delta Diamond Medallion Upgrade (SWU) Certificates.

    On the IAD-CDG-ARN leg, you can only use your SWU for Econ to Prem Econ on Air France, if you buy an AF Y/B/M ticket.

    On the BKK-JFK leg, you can use your SWU from Econ to Business on a Delta Y/B/M ticket.

    The problem is on a combination ticket IAD-CDG-ARN, ARUNK, NRT-JFK-(BWI), the allowed class combination that makes sense is:

    1 AF 39S IADCDG 415P 545A#1/O $ J03 E
    2 AF1262W CDGARN 945A 1215P/O $ J03 E
    3 DL 172B NRTJFK 315P 310P/O $ E

    where the Air France IAD-ARN is already sold on Premium Economy MEANING YOU DO NOT NEED AN UPGRADE CERTIFICATE for that leg. You will still need your SWU to upgrade to Business Class on Delta NRT-JFK-(BWI).

    This confirms that Delta SWUs are pretty much useless outside Delta.
    And if you must know, you only saved about $750 bucks on the certificate since that is the difference between your upgradable B class fare and a straight I business class fare.

  • TonyA_says

    You probably were comparing against at least D Business Booking Class since I class seats were no longer available being Xmas season. (Then, theoretically Upgrades should have been harder.) That makes you very lucky and proves that SWUs on AA works. Good for you Carver. Glad the whole family made it :-)

  • TonyA_says

    That’s great. But at least you made it to elite on you most important airline. That’s what really important IMO :-)

  • AirlineEmployee

    Essentially they are worth staying with ONLY if you are at the highest levels – Gold, elite, Titanium, whatever they want to call it. Otherwise you have hit the nail on the head. Unfortunately for every person seeing the light, hundreds do not. They are not road warriors but only occasional leisure travelers yet think they are really accruing their way to the top. I love the demands of passengers that are not even at Premier level yet expect something “special” because they are mileage members.
    Again, for every person that will give up the ghost there are 100 more that think it’s the greatest thing on earth.

  • bodega3

    BTW, there was no $1200 change fee. He either had to change the outbound flight, which means the whole itineary gets repriced or he needed to change a return flight and the same class of service booked wasn’t available, so the return had what we call an add collect for the next available class of service and all these would include the airline’s actual change fee. Why should he expect the airline not to charge him when he make a change, being a member of the frequent flyer program or not. The rules of the fare tell the agent how to handle it and there is, currently, no provision in any fare that waives any change fee or add collect for any passpenger type.

  • whatup12

    Hi Tony–you posted some helpful comments but they seem to have been deleted. In terms of the OP case–i don’t expect fees on fare changes/cancellations to be waived because i am a frequent flier. I expect what is in the list of benefits of the program and nothing more. I think you are exactly right–this was a case of unrealistic expectations…and people with unrealistic expectations are bound to be disappointed in life. Sometimes airlines will clear upgrades on international flights without certs/miles, but they will only do this if you have an upgradeable fare. So don’t be shocked if you bought the lowest fare, highest restriction ticket to not be upgraded.
    Also interesting comments about the premium economy, etc on AF. I am limited also since I have to fly US airlines using federal moneys–ie cannot book AF directly. But I forwarded them to my agent and will see what he comes up with. I would be surprised if only $750 difference between fares…as he seems to be as in touch with this as you are, but way above my level. all of this highlights the importance of using a travel agent who really knows what they are doing. Though I know the business of actually travelling well, i recognize i know very little about the business of travel. I will see what agent responds (though it is a religious holiday for him right now) and get back to you.

  • Carver Clark Farrow

    Perhaps. But for the 100k miles that you would have accumulated you could get a First Class ticket to almost anywhere in the World except Asia. If First Class has value to you, that would be worth far more than 2k.

  • For major airlines in Europe, especially due to the high pressure exercized by low-cost flyers such as Ryan Air and Easy Jet, the price to pay for customer retention has yet simply become unbearable for all major “historic” carriers, whose yield management basics have been literally turned upside down. If you are not frequently travelling business (the one and only side of the spectrum where “classic” carriers may stil expect to make decent per capita margins) just don’t expect anything at all from so-called “loyalty” programs, as a result of a deliberate change of marketing paradigm, combining opacity of tariffs and aggressive “no frills / lowest service” entry-level pricing. Building a long-term relationship with customers is not a strategic priority anymore, in a context where you have to present shareholders and financial markets with positive short-term results to keep them in a good mood (by the way, it’s a general trend in the world of services, and airlines are no exception).

  • Charlie Funk

    I’m trying to discern if the loyalty program issue is as much related to seat upgrades, boarding privileges, etc. or the huge devaluation in the value of miles or points as they relate to redeeming flights. Case in point – some six or seven years ago a round-trip business class ticket to Europe on Delta had a value of 90,000 miles. Today, that same seat has a variable value, but I have been unable to find flight pairs that “cost” less than 250,000 – 265,000 miles per person. Similarly, coach seats to Europe had a value of 40,000 or so miles and now “cost” 90,000 miles.
    My sense is that the devaluation of these programs has less to do with true loyalty and more to do with the agreements airlines made with credit card companies that allow card holders to achieve the same thing that those flying hundreds of thousands of miles a year (at least with regards to building points accounts for flights) have achieved through diligent dedication to one particular air carrier.
    I liken it in some ways some mythical government that prints billions and billions of units of national currency with scant or no underlying value and then watching costs in that country skyrocket. But that’s a fantasy world.

  • NoraG

    Some of it depends on how you acquire miles. I used to fly weekly and racked up a lot of miles. When I quit travelling, then I thought about how to maintain those miles. I now have an awards credit card that I use for most purchases, and it brings me miles. I use those miles for travel when I can. If I can’t, then I pay for a ticket. I’m flying from DC to Fairbanks this spring. And the annual cost of the card is offset by the “no baggage fee” aspect of using my miles. I see no way for me to lose.

  • NoraG

    Let me clarify–I’m flying to Fairbanks using my miles, not paying for the ticket. I feel that is a lovely return on my annual credit card fee.

  • Carver Clark Farrow

    Curiously, that’s why I don’t like Elevate. The number of miles for a ticket doesn’t really fluctuate, but fares do. Sometimes last minute fares are extraordinarily expensive. But since the miles don’t vary using miles makes sense.

  • Carver Clark Farrow

    I suspect its a combination of things. Airlines have cut capacity and reduce flights on many routes. The result being of course, fewer seats available for reduced mileage awards.

  • bodega3

    I noticed that a post I made last night has been deleted, too. What the heck is going on…again?

  • robbg

    somebody who was quoted in this article, I respectfully disagree. I am
    unhappy with Marriott’s devaluing its points, and I think the coincident
    timing with their plea for Freddie award votes was bad PR, I value my
    Marriott loyalty and the perks that go with it more highly than points.
    As Gold (mid-tier) members, we receive gracious service at all of their
    properties from top to bottom. That is worth more to me than the
    occasional “free” room.

  • Grant Ritchie

    Hi Bodega,
    I just checked our “Spam” and “Deleted” files. It’s not us this time. Sorry. :-(

  • ArizonaRoadWarrior

    I agree with you…Chris need to provide third-party statistical analysisdataetc. stating that frequent fliers are spending more money; etc.

    I used to earn between 8,000 to 15,000 FF miles a month (for almost 5 years) just from my credit card for work related expenses before my employer made it mandatory to use the corporate credit card. I cashed in 300,000 miles for two Upper Class tickets on Virgin Atlantic. If I had purchased those two tickets with cash, the price would have been between $ 12,000 to $ 16,000 (depending if the fare was refundable; how far in advance; etc.) PER ticket. Two years later, I cashed in another 300,000 miles for two Business Class tickets on British Airlines. Again, if i had purchased those two tickets with cash, the price PER ticket would have been between $ 9,000 to $ 11,000 PER ticket. Two years later, I cashed in another 360,000 miles for three First Class tickets on Lufthansa and Asiana…again, the value of those tickets were between $ 12,000 to $ 15,000 PER ticket.

    Someone could agrue that the above examples are not good since I was getting miles from my credit card for work related expenses that I was not paying for. Back in the fall of 2009, 2010 and 2011, US Airways had a mileage promotion called Grand Slam. If you purchased office supplies from OfficeMax; rent a car; stay at a hotel; purchase a NetFlix subscription; purchase some wine; etc; you will receive a ‘hit’. If you earned 36 hits, you received 100,000 bonus miles. I spent between $ 600 to $ 900 per family member during this promotion and earned between 130,000 to 145,000 miles per account. I cashed in 270,000 miles for three Business Class tickets on Asiana that had a value of $ 7,000 to $ 9,000 PER ticket. I spent $ 800 for a ticket with a value of $ 8,000…I think that is a good deal.

    If a person flies one or two times a year, there is no or little value in joining a airline frequent flyer program; a hotel frequent guest program or a car rental frequent renter program. I joined the frequent guest program for Omni…I have only stayed at an Omni hotel three times in the past ten years but being a member allowed me to have free internet service.

    There are some frequent fliers that believes that fees, charges, etc. should be waived because of the amount of business that they do with an airline. I want my airlines to be profitable so that they are around in order for me to cash in my miles. Then there are some frequent fliers that have unrealistic expectations such as cashing in miles at the last moment; with no flexibility on their travels; traveling to Europe in the high season; etc.

  • Loyalty programs definitely entice members to spend more. See: http://onlinelibrary.wiley.com/doi/10.1111/j.1468-2370.2011.00314.x/abstract

  • djp98374

    The issue that Chris is concerned about has to do with the infrequent traveler and consumer misinformation. If you are a business traveler who are earning miles and not putting in your own money then have t it their is no rik for you. If you are a consumer who might fly one a year the idea of getting enough miles for that dream trip will take a long time. Going in you think you need 60K miles for a trip but in10 yrs that 60k could shift to 75k. This will continue like an animal chasing food tied to a string.

    In general consumer don’t follow common sense and they have blind loyalty where they fly xxx airline for miles but it mean paying $100 more per ticket.

    The other part of this is that status gets you for free thing that used to be free for all. It’s sort of a rich get richer argument.

  • Thanks

  • Misinformation is certainly inappropriate in any business venue. But I must disagree with the rest of the post.

    “In general consumer don’t follow common sense and they have blind loyalty where they fly xxx airline for miles but it mean paying $100 more per ticket.”
    What numerical or analytical information do you have to support that contention?

  • Ummm. I’m not a professor and I couldn’t access anything more than the abstract. Not particularly persuasive.

  • I remember joining the Hyatt program when I was taking the California Bar Exam as I was staying at the hotel. By merely joining I received complimentary access to the lounge. For a poor recent law grad, being able to turn the lounge food into dinner was a blessing.
    I didn’t stay at a Hyatt again for ten years.

  • TonyA_says

    Well, how about AMEX Travel Membership Rewards?
    Is there any downside to joining this even if you do not travel often?
    Not all airlines are travel partners, but at least your points do not expire.
    You don’t need to go crazy chasing any particular airline reward.

  • TonyA_says

    Use the DL codeshare of AF on W class to ARN (then AF to NIM).
    You will be ticketed on Delta stock, and comply with your federal money grants.

  • TonyA_says

    Re:If a person flies one or two times a year, there is no or little value in joining a airline frequent flyer program
    That might be true if they are flying domestic flights.
    Majority of my clients (and myself) fly very long flights to Asia.
    Simply flying twice a year can earn Silver Marco Polo in Cathay Pacific (equivalent to Ruby OneWorld). That allows one to use Cathay (and some partner) lounges.
    And if you ever experience the crazy check in and boarding conditions for most Asian destinations, that Marco Polo card gives you a separate line for checking in as well as boarding any time you want.

    Same with your luggage. You get it earlier- a godsend for international travel.
    If you are traveling about 15k miles per journey (even just twice a year), you’d be crazy not to register your miles to whatever Frequent Flyer Program the airline offers.

  • djp98374

    There are numerous studies and books written on consumer behavior, making choice, decision making, habits, and loyalty. From teh paradox of choice to the poer of habit and numerous ones in between.

    You see it in consumer behavior with brand loyalty…consumers always buy Ford, use tide detergent, do their shopping at Safeway.

    Safeway occasionaly runs promos that if you purchase certain items or if you spend so much money you will get a discount on gas prices. Your purchases may equate to saying $0.50 per gallon of gas. If you buy 10 gallons you saved $5. If you did consumer shopping at different stores and compared prices you would have saved more than the 45 you save doing all the shopping at Safeway.

    Buying an airline ticket is no different. If you are accumilating miles in one airline when you buy tickets you are focusing on earning miles with them.

    If you are at 23,000 miles with delta you are looking at getting to that 25,000 miles reward level. The consumer may see a cheaper fair on American but opt not to buy it because they have miles with delta. To gain those miles they may be willing to spend $100 more per ticket for the airfare on Delta.

    I am guilty of that..i dont fly American unless its a code share Alaska flight. If I look at fares i will look at the airlines and pay a little more for a carrier I have miles with than another carrier. I would not pay $100 more. Maybe $10-$15 more I would pay. there re some consumers that would pay $100 more.

    Hotels are the same way. If its coming out of your own pocket do you cost compare for hotels? If you were a hilton gold would you spend a little more to stay at a hilton than a best western or Clarion? If so how much more would you pay? Knowing you want to maintain your status.

    Consumer look at the reward they t for the purchases but not the differences in prices of them. If you are going to purchase XXX and you see there is a deal where you will get 1,000 miles if your purchase it from company A but no miles from company B —most customers will purchase from company A because of the miles and not looking at the cost differences.

  • djp98374

    Dont forget AmEx has an annual fee.

    True–but many consumers dont behave rationally. The mileage for airline rewards dont expire but do you know for certain that the mileage rates will stay at the levels they are now 10 years from now? The standard award domestically is 25K. Who is to say that wont change to 35K in 10 years.

    I dont have an issue earning points. Just do it wisely and dont let it rule your behavior in how you book your travel.

    As you saw this spring many of the hotel chains reset their hotel points/categories where most of the hotels cost more than last year. Thus to be bale to use those award like you planned you now have to wait an earn more points.

    Some consumers buy product XXX just to earn points through company YYY even if they dont really need XXX.

  • Crissy

    Being as it’s free to belong to most programs, whether you use the services or not, I don’t know how you can say it’s not worth it. Is entering your reward number that much work?
    As for chasing the miles. Well that depends on your circumstances – how much you travel and what hubs you’re near. If you travel a lot, then yes it makes sense to at least earn the miles you’ll earn from your travel. If one airline does most of the flights out of your local airport, then it’s pretty easy to pick an airline, even if you only travel a couple times a year, since most of your travel will be with that one airline or it’s partners.
    If half of your travel is earning miles just so you can get status, then you either have an issue with priorities, or it’s just a hobby. Just as some people like guns or classic cars, for some people this is their hobby. Hey, at least they have a hobby, something to be interested in.
    As for redeeming miles, it’s all about expectations. Most of us know that it’s hard to do, and is part of the challenge for the “hobbiests.” But even for the average person who is earning a chunk of miles from travel, you either need a goal (and know your options) or be willing to roll the dice with whether you’ll get what you want, when you want it. You might not get it for this trip, but you might get it for another trip. The problem is for the novices when they see the commercial, or mailing telling them that 25,000 miles will get you a round trip flight, but fail to mention that their are tons of exclusions, blackout dates and pages and pages of small print.
    I’ve gotten a couple reward flights in the past, I can’t always get what I want when I want it. But if you travel enough you’ll find you can get what you need some of the time. As long your expectations are in line with what they offer, it can be a winning proposition.

  • brianguy

    if one wants to get into debates over in what impacts loyalty programs have on a company’s accounting, it would serve to point out that is not the only way the balance sheet is tilted. when loyalty customers don’t redeem mileage and they expire, the company balance sheet benefits. same thing if a loyalty customer dies or retires or moves to a land far far away and never does anything with them. just like a teenager with a gift certificate to the Gap who never uses it because they went there and decided they didn’t find anything they liked. that $50 GC then deteriorates (via inflation) eventually to $0. meanwhile the company can reinvest or earn interest on that $50 of whatever accumulated funds they have from unredeemed but not expired GC’s.
    when airlines sell mileage points to get to the next level, they win. when customers earn miles on a CC without an annual fee, they win and the airline “wins” by getting repeat business, hopefully selling them upgrades or additional tickets for companions, luggage fees, entertainment charges, etc. when customers redeem them, the airline in a sense loses since they have to pay for that wholesale fare out of a general account, but hope to make up for it with additional loyalty by the same customer later, as well as word of mouth or “goodwill” publicity. and sometimes via fees or other factors involved to redeem said points.
    it’s all a big game, you can either choose to play or not. the airlines choose to, but like Chris, their customers don’t have to. if they do, they may “win” or they may not. but the bottom line is that some do while some don’t. but paying a higher fare doesn’t necessarily get you what those rewards might eventually. and that’s the gamble.

  • TonyA_says

    I have a small disagreement with people expecting that the miles needed for a reward ticket must be frozen forever.
    Even my money loses value over time.
    A few years ago, I would fly to Asia for 900 bucks. Now that same ticket is at least 1200 bucks.
    How rational is it to expect absolutely no inflation effects when it comes to mileage or points?
    Inflation affects mostly everything puchased with currency. Most airline input costs are increasing. Hence it takes more points to travel.

  • PsyGuy

    I find loyaly or FF programs useless. Given I travel light and seldom check a bag, and I am just under 5’9″ and weigh 150 lbs. I have no interest or see any value in first class seats. I find coach seats very comfortable.

  • BobChi

    I just got back from Europe on one award trip, and will be headed to Asia in June. On many aspects of travel, Chris is knowledgeable, but when it comes to loyalty programs he simply has biases which prevent him from really understanding how valuable they can be. On my salary, I could seldom afford to fly the world, but thanks to these programs I can make several trips a year. I am not an elite anything and never will be. I know Chris is wrong, simply from personal experience. And why does Chris think that when people disagree with him it is a “personal attack”. I realize he writes for a general audience, most of which is not very knowledgeable about this, but even considering his audience, when he uses provocative headlines he should expect some disagreement.

  • BobChi

    Chris simply is writing for his unsophisticated general audience which is not very savvy financially. He makes the assumption that belonging to a loyalty program warps a person’s judgment and they then fixate on pursuing the points and miles to their own detriment – say buying a $500 seat to get the miles rather than an available $300 seat on another carrier. I would say that that is the minority. Most of us who follow these programs educate ourselves on the pluses and minuses, and wind up benefiting from the advantages and steering clear of the pitfalls. It’s not that hard.

  • BobChi

    Exactly correct. The NUMBER of points you need to buy a reward will inflate with time, but so does the VALUE of the reward. If it takes 25,000 points to buy a $500 seat today, but 30,000 points to buy a seat that then costs $600 in a few years, the nominal value of the points has deflated, but their general purchasing power of the currency has not.

  • BobChi

    I’m surprised. You put down Flyertalkers often enough that I’d think you would do a little research.

  • I think you’re reading the wrong blog. I don’t talk about the site and don’t read it.

  • David Brown

    It’s free to apply for these loyalty programs. I travel by air maybe one to
    three times a year, but I’m still a member of three different
    programs. I generally don’t have enough points for a trip, but there
    are other redemption items.

  • properthwacking

    I am glad you like their new program despite the fact that they devalued their points by 15% this year to help THEIR bottom line. Evidently it didn’t phase you one bit that your 7 earned flights are now automatically taken down to 6… or 5 or 4 if fares continue to inflate due to mergers and lower capacity on all remaining flights.
    Meanwhile their “standard awards” almost never have seat availability anymore, except once in awhile on an unpublished 2-stopper, or if you book 4 months in advance when fares are only in the $130 range.

    And I LOVE Southwest but these things are true and prove the article is right about the loyalty currency devaluation and you’re delusional if you think otherwise.

  • properthwacking

    How many times do you have to stay with Hilton before you reach the 80k points needed for a free night these days? Has anyone even bothered to check? By the time I reach that goal, I’ll more than likely have expired points.

  • bodega3

    You don’t have to use those miles for air travel. You can use them for hotel stays, cruises, rental cars. Sad that Chris gives such a negative light to these programs, when they actually are good for those who participate in them.

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