Five Signs of a Frequent Flier Rebound

Not coincidentally, United introduced its Miles and Money feature hand-in-hand with its one-way awards. With Miles and Money, Mileage Plus members can use a combination of cash and miles to book restricted round-trip coach awards on United and United Express. So, for example, a round-trip flight between San Francisco and New York could be booked for 25,000 frequent flier miles, or, using Miles and Money, for 15,000 miles plus $120. So in effect, you are buying 10,000 miles for 1.2 cents apiece.

Based on additional test bookings I made, the effective price of miles varied from just under 1 cent to just under 2 cents -- not bad, considering that the airlines generally sell miles for around 3 cents each.

Delta offers members of its SkyMiles program a somewhat similar benefit, dubbed Pay with Miles. But it's only available to holders of American Express credit cards linked to the program. And in most cases, the miles have a value of just 1 cent each. On the other hand, seats booked with Pay with Miles are not capacity controlled, so the hassle factor is all but eliminated.

As with one-way awards, the ability to combine cash and miles to book awards adds to the value of miles, by making it easier to redeem them.

3. Award Discounts

Another way to help loyalty program members use their miles: Make award travel cheaper.

Of course, awards are not getting any cheaper in the long run. On the contrary, award prices are continually inching up. The discounts are offered exclusively on low-demand routes, during low-demand periods.

Still, the temporary discounts are a win-win. Travelers fly for fewer frequent flier miles. And the airlines get the mileage liability off their books, and earn some goodwill equity from members of their loyalty programs.

Alaska has been a pioneer in discounting award travel, regularly offering members of its Mileage Plan program at least a couple of award-travel promotions every year.

But the new industry leader in award discounts is United which over the past 18 months has offered eight award discounts.

Award discounts are more than just good value. They're also a signal to consumers that there's optimal award availability on particular routes at particular times.

4. Non-Flight Awards

If one-way awards and miles-and-money options aren't enough to circumvent the award seat bottleneck, perhaps it's time to look beyond free flights for redemption opportunities.

Non-flight awards aren't new. But they've been in short supply in recent years, mostly because it costs the airlines more to give away an Apple iPod, say, than it does to award a free seat that would have gone unsold anyway. So non-flight awards were priced high and represented inferior value.

That value problem persists, but airlines nevertheless are expanding their catalogs of alternative awards.

Delta just this month rolled out its SkyMiles Marketplace -- an online portal where SkyMiles members can redeem their miles, or a combination of miles and cash, for more than 6,000 items, including hotel rooms, car rentals, consumer electronics, clothing, jewelry, and so on.

And United late last year began allowing all Mileage Plus members to cash in their miles for hotel stays and car rentals.

While these are best viewed as options of last resort, they are nonetheless options and welcome as such.

5. New Program Model Scraps Award Restrictions

  • 1
  • |
  • 2
  • |
  • 3
  • |
  • 4
Join the Discussion
blog comments powered by Disqus
You Might Also Like...