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Practical Traveler | Frequent Flier Programs
The Miles Pile Up; Their Value Declines
By MICHELLE HIGGINS

ARE frequent-flier programs worth it anymore? That’s the question travelers are asking these days in light of the new charges for award tickets that were recently announced by major airlines.

Starting Aug. 15, Delta frequent fliers trying to use those hard-earned miles for award seats will have to pay a $25 fuel surcharge for travel between the 50 states and Canada and $50 for award tickets to international destinations including the Caribbean, Latin America, Europe and Asia. US Airways will levy similar booking charges for award tickets issued on or after Aug. 6. And last month, American Airlines began charging $5 just to make an online award reservation.

The charges are among the latest in a long litany of fees airlines have added in recent weeks as they struggle to break even amid rising fuel costs and other financial pressures. In a June statement, Delta Air Lines suggested that its new frequent-flier fees were temporary and could be rescinded should fuel prices subside. US Airways’ and American’s frequent-flier fees, however, were positioned as ticketing fees that, like the new checked-bag charges, are expected to remain in place for the long haul. (For a printable list of airline fees go to www.smartertravel.com/blogs/today-in-travel, and click on “Airline fees: The ultimate guide.”)

Airlines have already been tweaking their loyalty programs in recent years, making miles harder to redeem, imposing shorter expiration periods and raising the number of miles required for certain awards.

But until now, frequent-flier award tickets were perhaps the one remaining perk in air travel that had few strings attached.

“Free ticket, free vacation, getaway for free. These programs have historically been marketed — and marketed aggressively — in exactly those terms, and this pulls the rug out from under that,” said Tim Winship, an editor for SmarterTravel.com and the publisher of FrequentFlier.com.

Indeed, now that airlines are charging outright for the so-called free tickets, some avid mile-collectors are questioning whether it even makes sense to remain in a loyalty program.

FlyerTalk.com, a Web site where travelers share tips about getting the most out of loyalty programs, has been buzzing about the new charges. “...wondering if it’s just me,” posted a FlyerTalk member who goes by the screen name newguy44890, it “seems earning miles is no longer worth it. with the email today from delta saying they are going to charge a fuel surcharge on reward tickets???? it takes me around 3 years to earn enough miles for a ticket and usually i have to use 50k for a reward ticket, on top of the no meals, and all the fees. ...”

Another member, biggestbopper, chimed in, “While I have around a million miles on various airlines, I am not making much effort to get many more.” The flier now collects hotel points using a Starwood American Express card so “at least I can still book a hotel room with the points,” and noted how difficult it was to secure a couple of business-class award tickets to Europe this summer: “it was quite a struggle, and I had to be so flexible I felt as though I were a contortionist.”

Despite the fees, elite frequent fliers still see value in loyalty programs, as brendog suggested on FlyerTalk’s forum: “Personally, the free tix mean next to nothing for me. I want upgrades, lounge access, and all of the other perks of status. On the other hand, I generally earn at least 2 or 3 free tix a year on each of the 3 main alliances, so I’m not particularly affected by the degradation in value. Anyhow, paying $100 for a flight on a free ticket is waaaay better than paying $1000 for purchasing the ticket. ...”

The math changes for people who earn miles primarily through mileage-based credit cards rather than frequent trips. The US Airways Dividend Miles Preferred card, for example, charges a $50 annual fee and offers one mile per $1 spent. A coveted “saver” award costs 25,000 miles for travel within and between the continental United States and Canada. If it takes you four years of spending to rack up enough miles for a free ticket ($6,250 a year), you will have paid $200 in annual fees just to earn those miles. Add in US Airways’ new award booking fees of $25 for domestic tickets, $35 for travel to Mexico or the Caribbean and $50 for Hawaii and international flights, and you will have effectively paid $225 to $250 in fees for the award ticket. Not bad if that trip to Las Vegas is priced at $350 on the open market.

But say you aren’t able to find a 25,000 award ticket for the dates you want to travel. You will need 50,000 miles for a premium coach award seat to Vegas. For that award, it will take you eight years of credit-card spending at the same rate of return to earn enough miles for the ticket and cost $425 to $450 in fees.

One alternative is to use a card that earns hotel points that can also be converted to miles. The Starwood Preferred Guest American Express card, for example, lets you transfer hotel points to more than 30 major airlines on mostly a one-to-one basis. And for every 20,000 points you transfer to miles you get a 5,000 bonus.

Another option: Consider signing up for a credit card that offers cash back instead of miles. That way you can use that kickback to buy the ticket you actually want.