Consumer affairs

Proof That Air Miles Are Approaching Null Value

January 6, 2016 | rjmcgarvey | Consumer affairs, Travel

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by Robert McGarvey

 

The pop-up holiday shop at Terminal C in Newark Airport drove the point home: air miles are plunging towards no value.

United opened the shop – which may or may not close – to give MileagePlus members a place to burn miles on, well, stuff such as gadgets, cookbooks, suitcases and more.  Last I heard United was saying they might keep it open and that is because there is a need for a place where miles are a currency.

That’s on top of an existing program in Terminal C that let MileagePlus members buy food and drinks at a half dozen restaurants such as Abruzzo Italian Steakhouse and Oeno Wine Bar. The directions on how to use are cumbersome so if this appeals to you, read them.  

And of course United has deals with dozens of online retailers – from Crate and Barrel to Tumi – that lets us buy stuff with miles.  

Other carriers do likewise.

There is a lesson in this.  Miles no longer are a currency with their issuers, the airlines, at least not for their core products, flights.

Miles really – honestly – no longer equate to free flights and free seat upgrades.  Those two ways are how I have spent all the miles I have ever accumulated and I have gotten business class travel, flights to Europe, cross country flights for myself and friends. It has been good.

But it is over.

The reason: airlines have made it so very simple to accumulate air miles without flying, by tempting us with credit cards that for every purchase shower miles on us.  Buy a week’s worth of groceries at Whole Foods and, well, that’s 300 miles. Over a year that is 15,000 miles and soon we are in striking range of a free flight. Just for buying food.  

Except those free flights are ever harder to claim because more of us want them, just at the time that there are ever fewer seats available for rewards programs. Something has to give in that equation — thus it is ever rarer to score rewards travel you actually want.

I am guilty too. In my wallet are a United credit card, via Chase, and an American Airlines credit card via Barclays.  I have them because of their perks, mainly priority boarding and free bag check.  I have them because airlines forced me to get them.

As airlines have joined in making elite status ever harder to attain – basing a ticket’s mileage value on price paid, not miles flown – many industry experts such as Joe Brancatelli have suggested that now is the time for many fliers to forget pursuing elite status and instead buy pieces of it via the airline credit cards.

Wrote Brancatelli in a recent column: “For most business travelers, frequent flier programs are no longer a compelling proposition.”

He added: “The 20 percent devaluations that the big carriers surreptitiously folded into their switch to revenue-based recognition sharply increases the price of award travel. There are many fewer upgrades to be had and the basic benefits (priority boarding and free checked bags) are available to anyone who acquires the airlines’ proprietary credit card.”

Agreed.

But the irony is that as more of us grab those airline credit cards, more miles get minted, they get harder to redeem on flights, and so we are forced to spend miles on airport food and maybe an overpriced suitcase at an airline store.

It’s a vicious cycle. But it won’t get better.

That is why I have resigned myself to the probability that I have very, very few free – paid by miles – flights in front of me.  I used to plot, connive, and save miles with a particular flight in mind.  I don’t anymore. I have plenty of miles for a flight on United. But just one. I spent all but a handful of my American miles on a flight recently and have no intention of rebuilding my balance.

I am at peace.

Now, if only I can figure out what to do with the 250,000+ points I have on an American Express card and, yes, when I have redeemed Amex points in the past it has only been for flights.  Never on hotels or meals or Amazon purchases.

We’ll see if I can maintain that record.

 

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