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Frequent-flier miles tough to use

By Chris Walsh, Rocky Mountain News (Contact)

Published April 3, 2008 at 12:05 a.m.
Updated April 3, 2008 at 9:47 a.m.

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Dust off the swimsuit, grab the industrial-size tube of sunscreen and call the pet sitter, you're cashing in frequent-flier miles this summer for a family trip to Hawaii!

On second thought, make that Boise.

Scoring mileage award flights to popular vacation destinations is quickly becoming an exercise in futility, as a growing number of travelers fight for a limited number of free seats. That's forced consumers to consider cities with lower demand, to fly off-season or to use more miles for unrestricted reward flights.

It's a trend that has been playing out for years, and some experts say it's getting worse. There are anywhere from 10 trillion to 14 trillion unused miles in circulation, according to various estimates. That means travelers have a lot of free flights coming to them, and airlines have billions of dollars of liabilities on the books.

Blame it on shifting mileage policies, a reduction in domestic capacity at some airlines and an overwhelming increase in the number of people earning miles for everything from grocery purchases to mortgage loans.

"It is now becoming almost silly in terms of the inability of consumers to redeem miles for the reward travel they want," said Jay Sorensen, president of airline consulting firm IdeaWorks. "Pity on you if you are a family of four and the only time you have to travel is in the summer, when the kids are on vacation. Good luck finding seats to a good destination."

The issue revolves around the availability of lower-level reward tickets, which require the fewest number of miles and are typically subject to seat restrictions and blackout dates.

Most airlines offer the opportunity to use more miles - often double the lower amount - for any available seat. Consumers, however, expect to travel on the lower mileage reward level because that's the number airlines use when promoting their programs.

Complaints growing

Experts who track such programs say there's no clearinghouse that provides meaningful data to assess the difficulty of cashing in miles. But most agree that the complaints are piling up.

"When it comes time to redeem miles, I can tell you that there has never been a time in the 15 years I've been associated with these programs where I've seen as much dissatisfaction as I hear these days," said Tim Winship of FrequentFlier.com. "For popular flights, the airlines will sometimes zero out the number of seats available for mileage redemption."

It's a dangerous situation for airlines, which make billions of dollars selling miles to credit- card issuers and other outside vendors. Those companies then turn around and give the miles away as an incentive for their customers.

Denver-based Frontier Airlines records about $37 million annually in revenue from its co-branded credit card, according to financial documents, while United Airlines said it makes about $1 billion in revenue from the sale of miles to outside vendors.

Some of that revenue could evaporate if consumers decide that the miles are becoming too difficult to use and third-party companies cut back on mile purchases.

Observers say the value of miles is already eroding. Credit-card providers, for instance, are waiving initial membership fees and increasing the number of bonus miles they're giving to new customers.

"The issuers of these cards need to offer bigger bonuses to get people to sign up," Winship said. "I think they'll be putting pressure on the airlines to fix the programs."

It's not all gloom and doom, though.

Many airlines are awarding more free tickets than ever, a testament to the growing popularity of the programs and a sign that many travelers are able to cash in their miles.

Adding options

Critics argue that airlines haven't increased capacity for reward seats to keep up with the number of miles they're selling. But carriers say they have tweaked their programs in recent years to give consumers more options.

United, for instance, allows travelers to use credit-card miles as currency for any flight with an open seat. It also lets customers exchange points for various products.

Frontier Airlines recently switched its strategy for allocating reward seats. The carrier used to reserve five seats on each plane but now forecasts demand on a given flight and allocates seats based on estimates.

No seats on some flights

On popular flights, and at peak times of the year, that often translates into fewer - and sometimes even zero - seats. But the carrier said that more seats are available on many other flights.

"We had a 20 percent increase last year in total award seat redemption, but we freed up more than that for availability," said Mark Dority, manager of Frontier's frequent flier program.

Frontier and United also offer updates on destinations where consumers are more likely to get a reward seat.

Several travelers think the situation isn't nearly as bad as some make it out to be, as long as you're flexible.

"I've had pretty decent success, actually," said Tom Morgan, a resident of incorporated Arapahoe County who booked several round-trip reward tickets with United to the Washington, D.C., area this spring. "If you think ahead and decide where you want to go well enough in advance, you'll have a lot easier time."

walshc@RockyMountainNews.com or 303-954-2744

AIRLINE PLANS AT A GLANCE

United Airlines

Mileage plan: Mileage Plus

Free flight: 25,000 miles for domestic travel with limited availability, 50,000 for any open seat

Expiration: After 18 months with no account activity

Blakout dates: No

Frontier Airlines

Mileage plan: Early-Returns

Free flight: 15,000 miles for domestic travel with limited availability, 30,000 for any open seat

Expiration: After two years with no account activity

Blackout dates: Yes

Southwest Airlines

Mileage plan: Rapid Rewards

Free flight: Eight round-trip flights for domestic travel with limited availability, 16 flights for any open seat.

Expiration: Flight credits expire if not used within 24 months.

Blackout dates: Yes

TIPS FOR REDEEMING YOUR MILES

* Start planning early, and find out how far in advance an airline sells fares. Frontier, for instance, sells tickets for travel up to nine months out. If you can plan that far ahead, you'll have the best chance of scoring a reward seat. Look to book as soon as the carrier starts selling those tickets.

* Check out last-minute deals because airlines sometimes release reward seats in the days or weeks leading up to a flight.

* Be flexible. If the exact dates you want to travel aren't available, try leaving a day or two earlier or returning later. Also consider nearby airports, such as Philadelphia or Baltimore rather than Washington, D.C.

* Don't hoard miles. Experts say the value of miles goes down every year, in large part because they're getting harder to use. So the best bet is to use them for reward travel as you accrue them.

* Check expiration dates. Most airlines have now put expiration dates on miles, requiring customers to either use them or accrue more within a given time frame.

* Look to travel during off-peak travel times, such as fall or spring. Your chances of getting a reward seat to a popular destination over the the Fourth of July or Thanksgiving are slim to none.

* Most airlines offer the opportunity to book reward travel through their Web sites. But don't stop there. It's sometimes worth calling the airline, which can at the very least help you find open dates.

* There's one good way to get the reward flight you want almost every time: Fork over a lot more miles than you planned to. Airlines advertise their lowest award levels, but those also are the hardest to get. You can often get any available seat, although it usually will cost you twice the number of miles required for the minimum award.

Comments

  • April 3, 2008

    8:15 a.m.

    Suggest removal

    Lodoman writes:

    Nice research RMN. United's frequent flyer plan is 50,000 miles for standard domestic travel, and 100,000 for standard coach ticket to Europe. Its been that way for almost 2 years now. Yes, it is ridiculous how hard it is to use miles now.

  • April 3, 2008

    8:43 a.m.

    Suggest removal

    Realitymensch writes:

    Your irony, Lodoman, if it is that, is misplaced: I just flew business/first class to London for 80,000 miles on United. And, by the way, I recommend spending the extra miles: it is much closer to a human experience. It was not possible, however, even several months in advance, to get exactly the days I wanted.

  • April 3, 2008

    9:40 a.m.

    Suggest removal

    jamesdenver writes:

    No its not Lodoman. 25k for domestic for first tier limited seating.

    50 or 60k to europe (not sure exactly) but NOT 100k.

    james http://www.futuregringo.com

  • April 3, 2008

    11:33 a.m.

    Suggest removal

    ruserious writes:

    in also depends on your status with United. I was happily able to book Maui over this past Christmas in September for family of 5 all for 35k miles each. I'm global services and 1K.

  • April 3, 2008

    3:08 p.m.

    Suggest removal

    russeosbo9 writes:

    I RECENTLY USED 100,000 FREQUENT FLIER MILES THAT I HAD ACCRUED WITH AMERICAN AIRLINES. IN ORDER TO DO SO I HAD TO PAY AN ADDITIONAL $300 PER TICKET, PLUS $30 OR A PENALTY OF $630 JUST TO ACTIVATE THE MILEAGE "PRIVILIGE". THIS WAS FOR AN UPGRADE ON TWO TICKETS TO ASIA DURING OCTOBER 2008 (OFF PEAK).
    IT SEEMS VERY UNFAIR IF NOT "SHADY", BUT THEY WILL NOT ALLOW USING THE MILES ANY OTHER WAY. I HAVE BEEN A MEMBER OF AA FREQ. FLYER PROGRAM SINCE INCEPTION IN 1981.

    RUSSELL L. OSBORN
    FORT COLLINS

  • April 3, 2008

    3:52 p.m.

    Suggest removal

    jamesdenver writes:

    RUSSELL L OSBORN STOP YELLING and stop typing in caps.

  • April 3, 2008

    4:03 p.m.

    Suggest removal

    amosnbear writes:

    As a former Denver resident and current Frontier card holder, one can imagine my dismay when I have been unable to use over any of my 100,000 miles accumulated on a flight to Omaha through Denver. I researched flights six months out and could never find available seats originating from San Diego. I am awaiting the arrival of an AMEX card for cash rewards and I will be cancelling the Frontier card for this very reason. I'm not sure how awarding miles that can never be redeemed is not fraud, but it's certainly close.
    And considering I have NEVER been on a full Frontier flight to or from Omaha, they must not be allowing ANY frequent flyer seats on this route.
    Frontier HAS been a good airline, but I'm not sure what they're thinking on this.