Frequent flyer miles used to conjure up fantasies of free travel to exotic locations and dream vacations. Now they just give me a headache.
Is it my imagination or are the seats you can use these programs becoming less frequent and work only for flights that take you miles out of your way just to fill empty planes on routes nobody uses?
The most frustrating thing about using frequent flyer miles is having to change or cancel your ticket. Yes you’ll get your miles back, but it will cost you around $150 for the privilege, which means that once-free ticket just cost you more than the price of a return trip -- and you didn’t even go anywhere.
There has to be a better way. So I checked out what CBS Travel Editor Peter Greenberg had to say on MoneyWatch.com about why it’s so hard to find those frequent flyer seats.
Greenberg explained that airlines make more money with their frequent flyer programs and anything else they do because they make it so hard for us to redeem our miles. According to Greenberg, the market value of American Airlines’ frequent flyer program is more than $6 billion and they make a lot of money by selling miles to their miles partners such as credit card companies and banks.
He says that in a sense, they don’t just print the currency, they’re also in charge of the redemption and if they keep the redemption levels under 10 percent the return on investment is a whopping 90 percent.
Another way they make money, he says, is by raising the mileage needed for a ticket and that they seem to do this arbitrarily. It used to be you could fly coast-to-coast in coach for about 25,000 miles. But today when you call the airline you’re more likely to hear, “sorry but there are no more 25,000 mile seats available. We do have some at 50,000 however.”
Greenberg calls that extortion and notes that the actual math conversion is even more frightening because 54 percent of all mileage earned is earned on the ground with credit cards. In other words, just by using your frequent flyer miles you spent $13,000 for that ticket.
Greenberg thinks all this should be regulated, but says it’s not because the airlines come under the protection of deregulation and no state is allowed to regulate the airlines.
Another thing these programs probably don’t want you to know is that in order to actually get a frequent flyer seat on a halfway decent flight, you have to book almost a year ahead and then pray you don’t have to change your plans.
Greenberg says the only way to beat them at their game is to be what he calls a “contrarian traveler” and don’t just go from point to point, but actually alternate cities or even pick an alternate route altogether. If these routes aren’t popular, chances are you’ll get a free seat.
Another thing to remember is that not all credit card frequent flyer plans are created equal. Greenberg says the best cards for accumulating miles you can actually use include Chase and the Capital One Venture Card because you’re getting one mile per dollar you’re spending.
It’s not about the miles or the points you have to redeem -- you’re earning dollars in your account. When you get to a certain number of points, they’ll actually buy you the ticket so you’ll get on the plane. He says it’s kind of like saying there are no blackout dates. You’ll be paying what everyone else is paying -- but at least you’ll be on the plane.
There are some cards -- and I actually had some -- where each dollar you spent got you a quarter of a mile or sometimes less.
As for the less obnoxious airline frequent flyer programs, Greenberg says Continental and Southwest are very good because they’re transparent, they let you know right away when you get to that mileage level and you can get a reward and go.
As for the other mileage programs, Greenberg says the pope would have a problem. In fact, Greenberg said he asked one airline what miles they had available on a particular flight to Rome in the next year and they replied “never.”
Greenberg says one place where frequent flyer point miles come in handy is with hotel rooms. It doesn’t mean you get better value, but at least you get a chance to redeem your miles as there are many more available hotel rooms than there are frequent flyer seats.
If you’re still determined to cash in the miles for a free flight, the best times to plan a vacation, according to Greenberg, are the week immediately following Thanksgiving and the first week in January. He says no one flies then so there a plenty of frequent flyer seats to fill those empty planes.