Frequent Flyer Programs

The following section about Frequent Flyer Programs is from my book Winning the Airfare Game. It was written over 12 years ago. How much of this information is still valid today?—I wonder…

The following is an excerpt from Chapter 3 of Winning the Airfare Game by Charles McCool, © 2001, Hawk Ridge Press

Winning the Airfare Game

Frequent flyer programs were created to encourage passengers to continue flying on the same airline. It is worth joining several frequent flyer programs—they are free to join—just to receive their member newsletter. Frequent flyers may be eligible for lower airfares that are not available to the general public. They may also receive coupons and special offers by mail and in the newsletters.

Frequent flyer programs are similar to restaurant or retail store programs where consumers buy a certain number of products and get one for free. Five cross‑country round-trip flights, roughly, earn enough points for one free domestic U.S. flight—25,000 points are needed in most programs. Some programs offer multiple awards at a discount, such as two domestic tickets for 40,000 rather than 50,000 points.

Airlines are not consistent with the amount of points needed for awards to similar destinations. For instance, one airline may require more points than other airlines for an award flight to Asia but less for an award flight to Hawaii. Another airline might offer First Class awards to Europe for much less than other airlines. For award flights to Brazil, one airline might “charge” 50,000 points, while another uses a partner airline and charges 85,000 points.

Once you are familiar with several programs, select a target destination and award. Your preferred airline should be convenient to use, fly to destinations that you intend to go, and have the best award structure. Book your award flight with that airline when you have enough points.

Here are requirements for First Class award flights to Asia:

Airline              One Ticket           Two Tickets

American             120,000                 240,000

Delta                    120,000                 240,000

Northwest              80,000                 160,000

United                  120,000                 180,000

A First Class award ticket to Asia requires 33 percent fewer points on Northwest. For two First Class tickets to Asia, United would be a better choice than Northwest, depending on convenience, quality, reliability, and point accumulation opportunities. For example, if your primary airport is O’Hare (Chicago), Dulles (Washington, DC), or San Francisco, then most of your flights will be on United rather than Northwest.

Consolidating flights on one airline enables you to accumulate points faster and get more rewards. Members that fly most are called very frequent flyers (VFF) or elite members. Not only do they accumulate points more quickly by flying more, but they also receive bonus points for being VFFs. For instance, a 100 to 150 percent bonus may be awarded to members flying over 100,000 miles in a year.

Frequent flyer points can be earned from several sources besides airline flights. Additional points can be earned by staying at hotels and using rental car companies that partner with the airline’s frequent flyer program. You can also earn 10 points for every dollar spent at participating restaurants. Buying certain products, using the airline’s credit card, or making telephone calls with the partner long distance service can earn more points.

For any offer, be aware of the requirements to earn points. Make sure that a product’s price is not inflated more than the value of the bonus points. It is not a good deal to pay too much for a product simply to get more points. Frequent flyer points are worth 2 cents; 500 points are worth $10 and 1,000 points are worth $20. Product prices are often inflated for frequent flyer point offers. If 1,000 points are awarded with a $100 purchase, determine whether the product, like flowers, would cost less than $80 ($100 cost of flowers minus $20 value of points) elsewhere. Paying $100 for a $40 product in order to get $20 worth of frequent flyer points is not smart.

Figure 3.1

McCool Rule: Value of Frequent Flyer Points

Each frequent flyer point is typically worth 2 cents; 500 points are worth $10 and 1,000 points are worth $20. A 25,000 point award is worth $500.

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Then again, paying an inflated price to get points could be a good strategy when only a few points are needed to reach an award level.  Most of the time, it is less expensive than paying for an unnecessary flight. Some programs, including Continental’s OnePass and United’s Mileage Plus, allow members to buy points. OnePass members can buy up to 20% of the needed points in 1,000 point blocks for $25 each block. If you need 3,000 points for a 100,000 award, you can buy the points for $75.

To maximize the value of frequent flyer awards, redeem them for flights that would cost more than the award value. Basic awards for domestic flights are worth $500 (25,000 points at 2 cents per point). Using a domestic award for a flight that costs $199 is not a good value. Emergency, last minute, and business flights are usually expensive and ideal situations for redeeming frequent flyer awards.

Most airlines charge a fee for booking award flights with less than three weeks notice. Avoid paying the fee, and potential disappointment, by booking award flights more than three weeks before flying. Award flights can be booked up to 360 days in advance and free flights to popular destinations are booked very early. If needed, reserve award flights as far in advance as possible, then change the dates and times closer to the start of the trip. There is no fee for changing the dates and times of an award flight; completely changing the itinerary incurs only a $75 fee.

Discounted awards may be available for off-season flights or other promotions. A program may offer award flights to Europe for 40,000 points between January 15th and March 15th and 50,000 points for the rest of the year. Award flights may also be discounted when a new partner airline is introduced. Shorter award flights of 500 miles or less “cost” only 15,000 points on many airlines.

People flying once or twice a year should follow the principles in this book to get lower airfares, rather than trying to accumulate enough frequent flyer points for free flights. Frequent flyer programs are beneficial but it is not worth paying more for flights on a specific airline simply to earn frequent flyer points.

Figure 3.2

McCool Rule: Frequent Flyer Programs

1.  Join Several Programs (they’re FREE!)

2.  Analyze Award Levels and Select a Preferred Program

3.  Consolidate Points

4.  Redeem Points for Emergency and Last-Minute Flights

5.  Take Advantage of Non-Flight Point Accruals

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What has changed about frequent flyer programs? Do you use frequent flyer programs?

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