E-MAIL JOE    PRINT    2010 COLUMNS    ARCHIVES    SEARCH ARCHIVES
FREQUENT FLYERS, INFREQUENT REWARDS
By Joe Brancatelli
May 26, 2010 -- Here's a fact worth noting: A company with a long history in frequent-flyer program research says that Continental Airlines is the most liberal of the five remaining "network" carriers when it comes to claiming free rewards.

Here's another fact worth noting: When I wanted a pair of business-class tickets to Rome earlier this year, I scored freebies from my Continental OnePass account for just 105,000 miles each. I got the seats I wanted on the days I wanted to fly on my first attempt, which meant I didn't have to pay about $4,000 each roundtrip to live la dolce vita with my frequent-flying wife for a couple of weeks.

Now here's the truth: Neither fact matters. When it comes to choosing and using frequent-flyer programs, you're on your own. Who cares what a research report says is good or bad among the major plans? Why should you give a damn that I got two (free) tickets to paradise?

Like business travel itself, playing the frequent-flyer game is an exercise in selfishness. All that should matter is what you can have when you want something--an upgrade, a free ticket, merchandise--in return for the loyalty you've shown to an airline and its ever-increasing army of marketing partners. Everything else is just background noise.

As noise goes, however, I'll admit that the new report from IdeaWorks is a good read. Over the span of two months, it made 6,160 booking requests at the websites of 22 frequent-flyer plans. It tried to claim a pair of free roundtrip tickets at the lowest published level (i.e., the most restricted) on both long- and short-haul routes for travel through October.

The big winner? Southwest Airlines' Rapid Reward program, which made seats available 99 percent of the time. The big loser: US Airways' Dividend Miles plan, which made freebies available just 10.7 percent of the time. In between were good showings for Alaska Airlines (75 percent) and a handful of overseas airlines that offer only a few flights to the United States. Continental's 71.4 percent was followed by its potential merger partner, United Airlines (68.6 percent); a poor showing for American Airlines (57.9 percent); and a disastrous 12.9 percent availability rating for Delta Air Lines.

Of course, I could easily poke holes in the IdeaWorks survey: Southwest doesn't fly internationally, thus offers you no shot at Rome or Rio. Despite its dreadful showing at the restricted level, Delta's SkyMiles program at least offers the increasingly rare guarantee that you can claim any seat in its system at any time if you're willing to cash enough miles. And who is really surprised that US Airways finishes last in any survey?

But that shouldn't matter to you. With something like 10 trillion frequent-flyer miles chasing a constantly decreasing supply of free seats due to shrunken airline route systems and tighter redemption rules, it's best to focus on practical ways to maximize your own participation in the frequency programs. So here are some simple ground rules to help you make the best decisions for your own travel and your own spending.

Understand the Game
Frequent-flyer programs are unregulated—the 21st century equivalent of the company store. The airlines that sponsor them make all of the rules, set all of the earnings level, control all of the awards, and reserve the right to do whatever they want, whenever they want. They can inflate or deflate the value of their "currency" and never have to pay off with a free seat. Forget about fair. Forget about honest. If you play, you play by their rules. And if they sometime forget to mention a rule (an example: the Mileage Plus program from United Airlines secretly limits the total number of award seats it allows members to claim on Star Alliance carriers), well, that's just part of the game.

Don't Buy the Lie
Frequent-flyer programs are literally lies. They long ago stopped being about rewarding your loyalty to a particular airline and years ago morphed into massive marketing machines aimed at selling you everything from flower-delivery services to credit cards. Every one of the airline's so-called "partners" buy miles from the carrier and give them to you as a way to change your purchasing pattern. The only shot you have at "winning" the game is never to buy anything just to earn miles. The only miles that have any real value to you are the ones you earn "free" as a result of a purchase you were going to make anyway.

The Game Isn't Important
You should never choose any airline because you think it has a "better" frequent-flyer program than another carrier. At best, frequent-flyer programs should be a distant fourth in the equation. Schedule, price, and service are always more important for genuine frequent flyers than whose program someone else says is "good" or "bad."

Miles Have a Definitive Value
For as long as there have been frequent-flyer programs, supposed experts have argued over the cash-equivalent "value" of a mile. There are dozens of formulas, some exotic and some based on the simple reality that most airline partners pay the carrier a few basis points north of a penny to buy miles in bulk. I believe you're doing fine anytime you can claim an award that offers a penny or more in value. (Value being the cash-replacement price for anything you're getting "free" in exchange for miles.) Why do I say that? Simple. The generally well-regarded American Express Membership Rewards plan allows you to swap Amex points for frequent-flyer miles on a 1-to-1 basis. Amex also allows you to swap points for gift cards at dozens of retailers, and one point gets you a penny of buying power. So if a point can get you a penny of merchandise or one frequent-flyer mile, the relative values are fairly clear.

Forget the Big Score
If you happen to sit in Seat 2A one day, don't hesitate to ask me about the hundreds of ways to can "beat" the game, either by racking up thousands of miles for just fractions of a penny each or by finding loopholes that will push the value of your miles to five or six cents each when you claim an award. It's a fun way to spend a flight (or, if you're George Clooney, make a movie). But most strategies for gaming the programs are best left to the small core of zealots who haunt the FlyerTalk boards or use services like ExpertFlyer.com. The vast majority of business travelers are too busy to play the game. Besides, the value of your time surely exceeds any value you can get from the time you spend learning the minutiae of the frequency programs.

Concentrate
Frequent-flyer programs literally and figuratively work on two levels. The basic plans for so-called "general" members are for the two-flight-a-year plodders who have to save for several years to earn even one restricted award. If you're truly a frequent flyer, it does pay to concentrate your flying with the carriers aligned to one particular award program. The so-called "elite" levels generally start at 25,000 miles. Elite status helps you build miles faster and, more importantly, grants you status and recognition at the airline. There are perks (some trivial, some useful) that come your way as an elite-level traveler. But fair warning: Being a lowest-level elite (usually called silver) offers extraordinarily limited recognition now. You need to reach the gold or platinum levels to get the good stuff. And the real perks—decent treatment and some personalized version of service—seem reserved for the unpublished, best-of-the-best categories that airlines confer by invitation only.

The Fine Print…
Besides being largely unregulated, airlines aren't required to disclose much about the inner workings of their frequency programs. Whatever they must report is usually buried in their 10-K filings with the Securities and Exchange Commission. That's where you learn tidbits like American Airlines issued 175 billion AAdvantage miles last year and about two thirds of them were sold to American's credit card and other marketing partners. Or that about six percent of Continental's capacity is devoted to award seats compared with about 15 percent at Alaska Airlines.
ABOUT JOE BRANCATELLI Joe Brancatelli is a publication consultant, which means that he helps media companies start, fix and reposition newspapers, magazines and Web sites. He's also the former executive editor of Frequent Flyer and has been a consultant to or columnist for more business-travel and leisure-travel publishing operations than he can remember. He started his career as a business journalist and created JoeSentMe in the dark days after 9/11 while he was stranded in a hotel room in San Francisco. He lives on the Hudson River in the tourist town of Cold Spring.

THE FINE PRINT This column is Copyright © 2010 American City Business Journals. All rights reserved. Reprinted with permission. JoeSentMe.com is Copyright © 2010 by Joe Brancatelli. All rights reserved.