The quotes about program devaluation are interesting.
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jaguar
Dec 22, 05, 10:01 am
Guess I'll have to go to the library to read the entire article.
MIA-SAT
Dec 22, 05, 10:17 am
FINANCE & ECONOMICS
Frequent-flyer miles
Funny money
Dec 20th 2005
From The Economist print edition
Who will cheer loudest when frequent-flyer miles celebrate their 25th birthday?
THE mania began in 1981, when American Airlines launched AAdvantage, the world's first mileage-based frequent-flyer programme, to encourage customer loyalty. Today more than 130 airlines issue miles, and according to Randy Petersen, the founder of InsideFlyer magazine, 163m people around the globe collect miles of some sort.....
gleff
Dec 22, 05, 10:37 am
Fortunately The Economist is available on Lexis ;)
The article echoes much of what I've said before, draws on Randy and Webflyer, and even uses a couple of phrases that I've written myself in pieces on this exact subject -- the lack of an independent central bank to protect the "currency"And the basic driving force of award chart inflation being too many miles chasing too few seats.... :)
doc
Dec 22, 05, 11:12 am
Fortunately The Economist is available on Lexis ;)
The article echoes much of what I've said before, draws on Randy and Webflyer, and even uses a couple of phrases that I've written myself in pieces on this exact subject -- the lack of an And the basic driving force of award chart inflation being .... :)
Any currency devalues over time due to inflation, FF miles included. The two clear disadvantages of this "currency" are: no equivalent of the Fed working to stabilize its value -- and no way to invest it to earn ROI and outpace inflation.
All our mile balances are the equivalents of Mason jars full of pennies on the kitchen shelf... worth less and less as time passes.
virtualtroy
Dec 23, 05, 12:49 pm
FINANCE & ECONOMICS
Frequent-flyer miles
Funny money
Dec 20th 2005
From The Economist print edition
Who will cheer loudest when frequent-flyer miles celebrate their 25th birthday?
THE mania began in 1981, when American Airlines launched AAdvantage, the world's first mileage-based frequent-flyer programme, to encourage customer loyalty. Today more than 130 airlines issue miles, and according to Randy Petersen, the founder of InsideFlyer magazine, 163m people around the globe collect miles of some sort.....
If the purpose of posting the article is for review, then you may post the whole thing. Am sure there are some attorneys out there who'd choose to disagree with my interpretation :rolleyes:
obx
Dec 23, 05, 12:55 pm
kinda bummed out I cant read the article too...
pinniped
Dec 23, 05, 12:56 pm
Any currency devalues over time due to inflation, FF miles included. The two clear disadvantages of this "currency" are: no equivalent of the Fed working to stabilize its value -- and no way to invest it to earn ROI and outpace inflation.
All our mile balances are the equivalents of Mason jars full of pennies on the kitchen shelf... worth less and less as time passes.
This is true...that's why any mileage earning options should always be assessed based on when you think you will use your miles, not just what you think their present value is today. When I use my Amex to buy something today, I know I will probably spend that Starpoint 12-18 months from now. I'm paying at least 1.5 cents for that Starpoint (that's what the best-available no-bull rebate card would give me). So the question is: what would 1.5 cents be worth, in my typical investments, 18 months from now, and what will a Starpoint be worth at the same time? I think my cash will grow, and I think my Starpoints will weaken. But for 18 months, I still think the Starpoint wins, so I use my Amex.
If my Starpoint lifespan were 5 years, I think the calculation would look a lot different. I'd probably be better off with that Fidelity rebate card (or similar).
It really makes you think twice the outright buying of miles. Take a dozen roses for example - commonly available anywhere for $25 if not less. But I was at one time willing to pay $75 for the same roses, because they also come with 30 UA miles/$. So really, I was paying $50 for 2250 UA miles. Hmmmmm...that doesn't sound so good after all.
So basically, I've moved most of my "earnings" to either simply buying products that aren't bundled with miles, or accruing hotel points. As travel demand picks up, airfares rise slightly which can theoretically be a slight countereffect to inflation. But that same level of demand rise makes hotel costs rise sharply, because desirable properties can drastically pull back their wholesale (Priceline, etc.) inventory. So maybe a particular property didn't raise their direct-booked rate from $200 to $300, but that $70 bid that always used to yield a room maybe is now $110-120. So Starpoints become worth signficantly more as wholesale buying options vanish.
I pay a lot more attention to the miles/points I'm forced to buy (e.g., when I buy airline tickets and pay for refundable/cancellable hotel rooms) vs. those that I choose to buy (e.g., when I use a credit card or interact with a program partner).
pinniped
Dec 23, 05, 1:05 pm
Oh...the one thing I'll add is that I am definitely not calling for a change in the system. The system, as is, benefits us, the Flyertalkers and people like us, greatly.
There are millions of people out there who carry crappy credit cards that effectively leave 1-2 extra cents per dollar on the bottom line for the bank. There are millions out there who redeem their FF miles for lame stuff like $90 MCI-ORD tickets. Millions more who just don't bother to play the game. And millions more who stay in Marriotts, Hiltons, and Starwoods and have no idea that the hotels have their own programs. All of that effectively subsidizes geeks like us. If everybody paid attention to these things, we'd all have to divvy up the same pie, and we'd each get about 90% less than we get now.
Also, the IRS has been good to us so far by not classifying FF miles as a currency. The fact that they are completely nebulous - not a coupon, not a promise, not a currency, not a discount - is best for us in the long run. The minute the government sets up a "central bank" for FF miles and hotel points is the same minute that the IRS starts attempting to formally attach a hard-currency exchange rate to them.
And that would be BAD , in a bold-allcaps kind of way.
BearX220
Dec 23, 05, 1:46 pm
...the IRS has been good to us so far by not classifying FF miles as a currency. The fact that they are completely nebulous - not a coupon, not a promise, not a currency, not a discount - is best for us in the long run. The minute the government sets up a "central bank" for FF miles and hotel points is the same minute that the IRS starts attempting to formally attach a hard-currency exchange rate to them. Agreed -- if it were at all possible, the IRS would surely have done it by now. But nailing down an exchange rate is like trying to nail jelly to the wall when Flyer A is redeeming 50,000 miles for an EasyPass IAH-OKC ticket with a street value of $150 while Flyer B redeems 100,000 for a $5k J seat to Europe. Yes, nebulousness not only saves us from taxation, it creates structural advantages for hobbyists like us who pay attention to the system.
As for your prior post about the questionable value of cash-for-miles transactions... there are times when one FF mile is worth a lot more to you than others, just as there are times when that $25 bouquet of roses is worth $100 to you... the night before Valentine's Day right after a fight with your wife, for example. If you balance is at 99,500 miles and you need 500 more to score an award seat with a street value of $5,000, you might happily pay $100 for them. The value floats all the time.
best
Dec 24, 05, 6:38 pm
The Economist does not seem to have a 12/20/5 issue. It is a weekly. It has 12/17-23/5 issue , volume 377 number 8457, on the cover "How to Deal with Iraq's Insurgents. What page was the article on?
The quotes about program devaluation are interesting.
swag
Dec 24, 05, 7:46 pm
I just googled the first sentence of the article (enclosed in quotes), and it gave me a link to an unportected Economist page:
http://www.economist.com/printedition/PrinterFriendly.cfm?story_id=5323615
freakflyer
Dec 24, 05, 10:04 pm
I just googled the first sentence of the article (enclosed in quotes), and it gave me a link to an unportected Economist page:
http://www.economist.com/printedition/PrinterFriendly.cfm?story_id=5323615
I take exception to the word scam in:
But sadly one of the best scams to earn lots of miles ended in 2003, when the American Treasury stopped accepting credit cards for online bond purchases.
It was a great way to earn money (with real money being invested, vs the 250,000 UA miles people were earning for signing up for a mortgage line of credit).
The article does reiterate that it is important to use the miles when you can.
j3823x
Dec 24, 05, 10:06 pm
Agreed -- if it were at all possible, the IRS would surely have done it by now. But nailing down an exchange rate is like trying to nail jelly to the wall when Flyer A is redeeming 50,000 miles for an EasyPass IAH-OKC ticket with a street value of $150 while Flyer B redeems 100,000 for a $5k J seat to Europe.
Unless they moved the responsibility of assigning value to the airlines as part of the award reservation process. Generally fairly easy to assign a number on a given day; doesn't matter whether that number changes over time or not. At the specific point of redemption, it is worth x. Even when there could be some confusion, say Y fare versus discount fare, the lower amount could be used.
best
Dec 25, 05, 1:50 pm
Swag: thank you very much.
I just googled the first sentence of the article (enclosed in quotes), and it gave me a link to an unportected Economist page:
http://www.economist.com/printedition/PrinterFriendly.cfm?story_id=5323615
Martinis at 8
Dec 25, 05, 3:34 pm
Just let me put in a plug here for The Economist. It's a great magazine and far superior to any of its competitors. And for those of us who are constantly on travel status, we can pick up our issue on the internet. Way cool!
M8
hfly
Dec 25, 05, 6:22 pm
Ten days until a British broadsheet rips off the article? A month until a tabloid does so? Two until a major US paper does so, and then for thenext six months all sorts of local papers citing it?
RustyC
Dec 25, 05, 10:46 pm
I liked this:
Moreover, although a ticket may be worth several hundred dollars to a passenger, the marginal cost to the airline of giving away empty seats is estimated at around $25 for a roundtrip on an American domestic flight, to cover the cost of fuel, ticketing and food. If the airline had previously sold all 25,000 miles redeemed for that ticket to a credit-card firm, it could have earned up to $400. Even allowing for some revenue loss from passengers who might otherwise have paid, the industry's total costs for giving away free seats are probably not much more than $1 billion—a fraction of the $10 billion revenue. No wonder sceptics argue that frequent-flyer miles now reward airlines more than passengers.
Also the mention that airlines are as addicted to selling miles for non-flight activity as some people are to collecting them.
I think it's that factor that pushes the situation beyond the normal "inflation" argument. The system would be far more sustainable without repeated devaluations if nearly all miles still had to be earned by flying. (Also liked how the article pointed out that various changes were forms of devaluation - some reporters get so sucked in by airline PR that they forget to mention that).
I didn't see the topic mentioned per se in the article, but would stick by my own prediction: Things will really worsen, tipping-point style, when the baby boomers start to retire. When people who traveled and collected miles for a lot of their careers but didn't have much vacation time to redeem start to want to travel more in post-retirement years (or otherwise spend what are high 6-figure or 7-figure mile balances), that'll really accelerate devaluation pressures. Airlines won't be ready with seats and will try to blame anyone but themselves (fuel costs?), and programs and their ability to motivate people will take a bruising, rolling hit as the conventional wisdom catches up to the reality of redeeming. The first baby boomers hit 62 in 2008 and 65 in 2011.
zemaitis
Dec 30, 05, 4:21 am
The Economist does not seem to have a 12/20/5 issue. It is a weekly. It has 12/17-23/5 issue , volume 377 number 8457, on the cover "How to Deal with Iraq's Insurgents. What page was the article on?
Page 102 of the Dec 24th 2005 - January 6th 2006 edition (special double issue) - volume 377 number 8458.
Cheers
MileKing
Dec 30, 05, 8:22 am
I think it's that factor that pushes the situation beyond the normal "inflation" argument. The system would be far more sustainable without repeated devaluations if nearly all miles still had to be earned by flying. (Also liked how the article pointed out that various changes were forms of devaluation - some reporters get so sucked in by airline PR that they forget to mention that).
The system would be more sustainable if airlines stopped viewing award tickets as "free travel" (which they are not), recognize that in many instances they are making more money from credit card companies purchasing miles than from customers purchasing tickets (i.e., the $400 in revenue cited by the article vs. maybe $250 for a coach ticket purchase), and start providing more award seats.
Randy Petersen
Dec 30, 05, 9:14 am
"... and start providing more award seats." But how can they offer more than 100% of seats on every flight each and every day for award redemption, which is what they do now?
The system would be more sustainable if airlines stopped viewing award tickets as "free travel" (which they are not), recognize that in many instances they are making more money from credit card companies purchasing miles than from customers purchasing tickets (i.e., the $400 in revenue cited by the article vs. maybe $250 for a coach ticket purchase), and start providing more award seats.
dream7
Dec 30, 05, 10:15 am
"... and start providing more award seats." But how can they offer more than 100% of seats on every flight each and every day for award redemption, which is what they do now?
Randy, please clarify. Are you specifically addressing award seats at double mileage?
jmoreita
Dec 30, 05, 10:27 am
"But how can they offer more than 100% of seats on every flight each and every day for award redemption, which is what they do now?"
Randy,
Well that's one we're are going to have to "agree to disagree on", as I would venture to say the average frequent flyer looks at it from a different perspective. Plus the fact that it's just not true in every case as you would imply.
For example: Northwest Airlines Rulebuster awards are still capacity controlled. Southwest Airlines, in the past the airline with the least restrictions, will soon have capacity controls on all flights, and will not be offering a double mileage award. And in almost all cases the double mileage awards that you are speaking of are not available on partner carriers.
Even without those examples the average frequent flyer expects to be able to use a standard award on their trip (knowing that they may have to be a little flexable). And as is so often the case it just not available. And that frustrates many people into feeling that they'd been promised this "free" trip, and then the airlines haven't played fair with them.
Here's an example: Houston to Denver on Continental Airlines departing July 8th, returning July 9th and not one seat is available in coach class on any flight in either direction. And when speaking with Continental I get the response that the awards seats are all booked up. So I then ask about August 12th, returning on the 13th - and still not one seat in either direction.
Is there a chance that numerous frequent flyers have booked up every seat? Maybe! But I would venture to say that they just haven't made many, if any seats available.
So how do we prove that the airlines haven't made ANY seats available. And is that fair if they don't make any seats at all available for a standard award?
Would you change your statement if I found a flight that no standard award seats were available on, and yet no seats had been sold at all. This may not be easy to prove in coach class, but it's very easy to do so in First Class. As I have done so in the past. I've requested award space in first class on a flight before, been told that nothing was available (that all standard award seats had been booked), hung up and proceeded to purchase (knowing that I could then cancel the reservations) every seat in first class.
I have the feeling the most people would disagree with your attitude that the airlines are playing fair. IMHO
Randy Petersen
Dec 30, 05, 12:46 pm
My attitude? I must apologize then as i have re-read the post and was not aware it provided an attitude. As well, i did not read where i said the airlines were playing fair. But that aside, I was merely trying to point out that some airlines do provide 100% of their seats toward award redemption, ala American AAdvantage, etc. We do know that some airlines are better at rewarding seats than others and that's why FlyerTalk and InsideFlyer exists and that is to provide resources for members and potential members to compare the benefits and performance of various programs. It's fairly well known that many members pick programs based on what is most convenient for them, not by actually comparing the benefits and award redemption possibilities. Much like complaining that a Mutual Fund you have chosen is not performing that great compared to others you might have chosen.
You will read here on FT that many members never have a problem with redeeming any rewards, while others do have problems. But most of the media coverage would lead you to believe that no one can ever use their miles, despite the facts that the industry gave away more than 30 million free tickets last year.
I'm pleased that i have been able to force some changes to these programs over the years, so i am hardly on their side. I do believe that some of them are guilty of mis-marketing themselves and frankly among the 12 million miles i have accumulated they are well placed with programs that i feel are clear with my expectations. I have several times told both Continental and Northwest that they have created some of their own problems by designating their 25K awards as "Standard." It is not a standard award, the "standard" is the 40K-50K award with the 25K award being more of a limited sale. And while i understand the "double miles" comments from many members, it's one of half full or half empty, since in the origination of all these programs, there actually were no 25K awards, all awards for coach seats were 40K-50K or there abouts. It might be worth to note that between 1981 and 1988 when all coach awards were 40K + not a single member ever complained that it was too many miles for a coach award. It was the "standard" and all members were fine with it. Again, it is my personal opinion that several programs have bungled their image in the public. In the past when the Passenger Bill of Rights was a topic, I long argued to deaf ears that airlines needed to have clear rules for "saver" type awards. My call was that airlines would be required to set aside 10% of every flights seats toward the "saver" type awards. Thus on a 132 passenger plane, 13 of those seats were for 25K awards and the balance were for "anytime" awards. While not everyone would get a 25K award, at least it was clear they had a chance. As for the rest of award redemption things, there's always much more to the story. While you may have your personal and a few others experiences to draw from, I see other things - such as the more than 50,000 awards that have been redeemed through awardplanner.com. I see the results, destinations, successes, failures, opportunities, etc. So when I speak about award redemption, outside of an actual airline, and my observation may even be better since i see redemption's from all airlines and all hotel programs, etc. rather than a single view. On occasion I know i have had to use "double miles" but frankly that has never bothered me, nor should it bother most members of these programs. The vast number of earning opportunities have more than allowed me to pay "double miles" if needed. As we report in InsideFlyer, nearly 60% of miles than an average member earns come from non-flight activity.
So again, I'm not trying to argue any specific point of view, rather point out that in some programs the airline does provide 100% of every seat every day toward award redemption, so capacity is not the issue. The issue is what price do we want to pay? For these other airlines - research and change if necessary. And as for the "fair" system, I've long believed that in a good relationship, both sides have "rights." It is pretty difficult to "fairly" criticize airlines when some of us - including me - don't want to admit that this "Standard Award Travel is limited and subject to seat availability." is what we agreed to when we signed up for the program. They told us that award travel would be limited and subject to seat availability. and unfortunately, they were right.
As for me, I'll continue to try and influence the industry as i can and given that the New Year will bring about the 25th anniversary of these programs, have suggested that an airline or two take a leadership role and put some guarantees into award redemption so that at least we know better what the odds are.
But from me, no attitude, just thoughts and opinions.
"But how can they offer more than 100% of seats on every flight each and every day for award redemption, which is what they do now?"
Randy,
Well that's one we're are going to have to "agree to disagree on", as I would venture to say the average frequent flyer looks at it from a different perspective. Plus the fact that it's just not true in every case as you would imply.
For example: Northwest Airlines Rulebuster awards are still capacity controlled. Southwest Airlines, in the past the airline with the least restrictions, will soon have capacity controls on all flights, and will not be offering a double mileage award. And in almost all cases the double mileage awards that you are speaking of are not available on partner carriers.
Even without those examples the average frequent flyer expects to be able to use a standard award on their trip (knowing that they may have to be a little flexable). And as is so often the case it just not available. And that frustrates many people into feeling that they'd been promised this "free" trip, and then the airlines haven't played fair with them.
Here's an example: Houston to Denver on Continental Airlines departing July 8th, returning July 9th and not one seat is available in coach class on any flight in either direction. And when speaking with Continental I get the response that the awards seats are all booked up. So I then ask about August 12th, returning on the 13th - and still not one seat in either direction.
Is there a chance that numerous frequent flyers have booked up every seat? Maybe! But I would venture to say that they just haven't made many, if any seats available.
So how do we prove that the airlines haven't made ANY seats available. And is that fair if they don't make any seats at all available for a standard award?
Would you change your statement if I found a flight that no standard award seats were available on, and yet no seats had been sold at all. This may not be easy to prove in coach class, but it's very easy to do so in First Class. As I have done so in the past. I've requested award space in first class on a flight before, been told that nothing was available (that all standard award seats had been booked), hung up and proceeded to purchase (knowing that I could then cancel the reservations) every seat in first class.
I have the feeling the most people would disagree with your attitude that the airlines are playing fair. IMHO
jmoreita
Dec 30, 05, 2:31 pm
Randy,
Correct me where I'm wrong (and I could be), but when I signed up for the prograns in the early 80's (and I'm guessing that's the same time that you signed up for the programs) most airlines were 25K (some even 20K - ie: Northwest Fly-writes) for a coach award without any capacity controls. This ticket could be booked at any travel agency, had no expedite fees, no Saturday night stay requirements, and thus was really a free ticket. That was a "standard" award ticket. The airlines then changed that standard award ticket so that it was what we now think of as a saver award. And then at a later date they introduced the new standard award tickets.
Mileage levels go up, rules change and that's all okay. But when an airline doesn' t make one seat available on a flight for a standard award ticket, at least IMHO that's not fair.
The airlines started out charging an expedite fee because an agent had to do "extra" work in order for you to receive your ticket in time for you to travel. Now you/we do our own booking and get charged a fee strictly because they can, and we don't have much of a choice but to pay it.
You can mention 50,000 free tickets being given away, or 50 million. But again IMHO if they give away enough miles for 1,000 tickets they should be obligated to make 1,000 tickets available. If they give away (and it was their choice to start selling miles) enough miles for 10 million tickets, then I think they ought to make 10 million seats available for "standard" award tickets.
Now I know you're not going to agree with that, but that's how I feel. And to counter what you might have to say about that maybe they shouldn't be selling so many miles at such a cheap price. For example, Delta Airlines is now going to require 250,000 mile to get a free ticket to Europe without any restrictions. And their logic, or concern is that too many people redeem 180K in the form of Amex/Membership Reward points and get a $7,000.00 ticket for doing so. But again, they created the situation. And the person who earns their miles by flying is the one being hurt.
All of the airlines (or most all) follow each other like blind dogs. If one does something the other does it because they feel the need to compete - without thinking about the end results.
I do think you have a different attitude that most people. The average person doesn't have 12 million miles to work with. The average person saves for a long time to get their "free" ticket. And then more often than not they can't get what they want. Yes thousands/millions of tickets get redeemed every year. And many people are happy. But you, and many of the people here on FlyerTalk are not the "average" traveler. And I don't think that average traveler (which is who I talk with every day) is all that happy with the programs as they are structured.
We are all told the programs could change, and they have. And very few if any changes have been for the better IMHO.
thebigfish
Dec 30, 05, 7:20 pm
Not so much availability, but availability on the highest margin flights, i.e. trans-atlantic and trans-pacific?
I know I appear to be splitting hairs, but I never seem to have a problem getting a ticket for my daughter from say, DCA - FSD. On the other hand, I KNOW trying to get a ticket from OMA - HNL is gonna be tough if not impossible.
What I did one time was buy the coach and upgrade with miles. It worked because it didn't impact the airline's (in this case United) revenue stream like going for the free ticket.
Is this fair? I don't know. It's the system. It's a important revenue stream for cash starved airlines. If it's not fair, I'll switch (which is what I ended up doing..from UA to NWA). The $25 cost used in the article in the Economist is true up to a certain point,but if that seat grosses $1000 because it's going to Europe, then the cost to the airline is much greater. The opportunity cost is huge in that case.
I'll say it again, it's not so much free tickets as it is free tickets on the high margin routes that people have the greatest difficulty in getting. If you're a retired baby boomer with 12,000,000 miles trying to redeem miles for DCA-FSD, your chances of getting a free ticket when you need it are pretty good; if you're trying to get OMA-HNL in January, your chances are pretty darn low regardless of how many miles are in your possession.
Understanding the difference is critical if you're going to end up either happy...or sad. I seriously doubt the airlines will give away too many seats that produce a significant portion of revenue for "FREE" now or anytime in the future.
Randy,
Correct me where I'm wrong (and I could be), but when I signed up for the prograns in the early 80's (and I'm guessing that's the same time that you signed up for the programs) most airlines were 25K (some even 20K - ie: Northwest Fly-writes) for a coach award without any capacity controls. This ticket could be booked at any travel agency, had no expedite fees, no Saturday night stay requirements, and thus was really a free ticket. That was a "standard" award ticket. The airlines then changed that standard award ticket so that it was what we now think of as a saver award. And then at a later date they introduced the new standard award tickets.
Mileage levels go up, rules change and that's all okay. But when an airline doesn' t make one seat available on a flight for a standard award ticket, at least IMHO that's not fair.
The airlines started out charging an expedite fee because an agent had to do "extra" work in order for you to receive your ticket in time for you to travel. Now you/we do our own booking and get charged a fee strictly because they can, and we don't have much of a choice but to pay it.
You can mention 50,000 free tickets being given away, or 50 million. But again IMHO if they give away enough miles for 1,000 tickets they should be obligated to make 1,000 tickets available. If they give away (and it was their choice to start selling miles) enough miles for 10 million tickets, then I think they ought to make 10 million seats available for "standard" award tickets.
Now I know you're not going to agree with that, but that's how I feel. And to counter what you might have to say about that maybe they shouldn't be selling so many miles at such a cheap price. For example, Delta Airlines is now going to require 250,000 mile to get a free ticket to Europe without any restrictions. And their logic, or concern is that too many people redeem 180K in the form of Amex/Membership Reward points and get a $7,000.00 ticket for doing so. But again, they created the situation. And the person who earns their miles by flying is the one being hurt.
All of the airlines (or most all) follow each other like blind dogs. If one does something the other does it because they feel the need to compete - without thinking about the end results.
I do think you have a different attitude that most people. The average person doesn't have 12 million miles to work with. The average person saves for a long time to get their "free" ticket. And then more often than not they can't get what they want. Yes thousands/millions of tickets get redeemed every year. And many people are happy. But you, and many of the people here on FlyerTalk are not the "average" traveler. And I don't think that average traveler (which is who I talk with every day) is all that happy with the programs as they are structured.
We are all told the programs could change, and they have. And very few if any changes have been for the better IMHO.opportunityopportunity
jmoreita
Dec 31, 05, 9:23 am
"It might be worth to note that between 1981 and 1988 when all coach awards were 40K + not a single member ever complained that it was too
many miles for a coach award. It was the "standard" and all members were fine with it."
From my copy of a 1985 AA award chart:
50A. Two free Coach Class tickets on American Airlines or American Eagle.
50B. Free First Class ticket on American Airlines.
60A. Two free Economy Class tickets on American Airlines between the U.S. and London.
60D. Free Business Class ticket on American Airlines between the U.S. and London.
75A. Two free First Class tickets on American Airlines.
100A. Two free Business Class tickets on American Airlines between the U.S. and London.
Randy,
Your statement would imply that the airlines lowered their award levels after 1988, and that they are just now raising their award levels back to the pre 1988 levels and I would have to disagree with that. Today's "double mileage" awards are much higher than the unrestricted awards from the past.
As shown with the above award levels from 1985 two free coach domestic tickets were available for 50K, (25K each). And two free coach tickets to Europe were available for 60K (30K each).
IMHO the airlines have doubled their award levels, but to avoid getting everyone upset with them they still offer a "saver" award at the original levels - but it's just too hard to obtain.
The airlines have the right to raise their award levels as they see fit. And while I agree that you often do stick up for the average frequent flyer. I don't think comments like "since in the origination of all these programs, there actually were no 25K awards, all awards for coach seats were 40K - 50K or there abouts." helps with today's situation.
Happy New Year!
taipeipeter
Jan 1, 06, 1:45 am
--Once a year, at Xmas-New Year's, the Economist does a 2-week issue.
--For those who can't read the article, it doesn't say that much: just that the number of miles is growing a lost faster than the number of seats/flights, and therefore inflation is resulting (modestly now as award flights become harder to get or effectively cost more miles; more dramatically, goes the prediction, in the future.
--They said this before some years ago, and the sky is still up there.
--But my personal philosophy, not necessary good for anyone else, is carpe diem, and I try to spend my miles about as fast as I get them.
Counsellor
Jan 1, 06, 9:18 am
We are all told the programs could change, and they have. And very few if any changes have been for the better IMHO.
Interesting discussion. So much so that last night, while listening to my Iowa State Cyclones get beaten by the Horny Toads (or whoever), I pulled out my files relating to my travel in the 1980s and did a walk down memory lane. I was surprised at what I saw . . .
During the mid- to late-1980s, the two Frequent Flyer programs I was most intimately familiar with were United’s Mileage Plus and TWA’s Frequent Flyer programs. While I was also a member of American’s, I didn’t fly them very much (I did, however, date one of their stewardesses, but that’s a different story ;)). So, I dug out the literature, including the award charts for various years, to see what was offered in the “good old days” compared to now.
Awards varied a bit over the early years as “tweaks” were made, but in general they remained surprisingly consistent from year to year until 1988 and 1989 when the major changes were made.
United’s Mileage Plus did indeed offer its “cheapest” free ticket at 50,000 miles. However, according to the Mileage Plus Program Guide dated September 1985, it was not a coach class ticket, but rather a First Class domestic round-trip ticket with a companion upgrade, and along with the ticket, for that 50K miles you also received (remember this??) three free nights at a Westin, Hyatt or Meridian hotel and also two free weekend days of a rental car! :eek: Ah, the good old days . . .
And in those days, the minimum mileage for every United segment was 750 miles, not today’s 500 miles.
TWA also had a fascinating program. Before the changes in 1988 (effective in mid-1989), the awards included:
- 50,000 miles would get you two domestic coach class round-trip tickets; or
- 50,000 miles would get you one First Class round-trip ticket . . . to Europe . . . along with a companion upgrade; or
- 60,000 miles would get you TWO coach class round-trip tickets to Europe; or
- 85,000 miles would get you TWO Ambassador (Business) class round-trip tickets to Europe; or (my very favorite)
- 90,000 miles would get you TWO First Class round-trip tickets to Europe.
Now, those “two” ticket awards did not have to be used at the same time, like the current Lufthansa two-ticket Companion awards. You could (as I did with one of the 90,000 mile awards) use one ticket and keep the other to use later.
And, the awards did not end with the flights. Along with these awards went certificates for 50% discounts on hotel stays, and free rental car days.
And, like United, each segment on TWA carried a minimum of 750 miles.
Other TWA program benefits included making Silver after 5,000 miles in a twelve-month period, which gave you unlimited upgrades to Business on domestic three-class flights (with an unrestricted fare), and making Gold after 30,000 miles, or four trans-Atlantic segments (two round trips) in a twelve-month period. Gold gave you unlimited free upgrades to First Class on domestic flights, and to Ambassador class on trans-Atlantic flights. (An unpublished benefit was that they would upgrade a Gold’s companion as well.)
And did I mention – you earned miles based on the class of service flown, not (as today) the class of service purchased. That meant your free upgrade to domestic First or international Ambassador class carried with it the class-of-service bonus.
Gawd, I loved that program!!!!!
Anyway, in 1988 they announced a change (effective in mid-1989) that generally raised the mileage cost for awards across the board, but they added:
- 20,000 miles for a domestic coach class round-trip ticket. This was their “standard” award; unlike United (see below), there was no “twice the price gets you any seat”.
At about the same time, United also announced changes to their Mileage Plus awards. Included in the new award chart were the “Saver Awards” where for 20,000 miles you could get a free domestic coach class round-trip ticket (30,000 miles for Hawaii). As Randy points out, the Saver Awards did come with some restrictions, which could be avoided by paying double miles, i.e., 40,000 for an unrestricted domestic coach class round-trip ticket, or 60,000 if you wanted to go to Hawaii.
Now here’s the interesting point: Obviously concerned about the perception that the Saver Awards would be difficult to get, in its United Report of June 1988 United stated,
United guarantees that an average of at least 50% of our seats systemwide will initially be made available for Saver Award travel.
The same guarantee appears in the following issue of United Report.
Ah, if they’d only continue the same guarantee . . . :(
A couple of moderately interesting side points:
For years TWA allowed miles earned before 1 July 1989 to be used against the old award chart, and as late as 2000 I was able to redeem a 90,000 mile award under that chart. What you received was a pair of certificates that you had one year to use to book a flight, so essentially you had *two* years after they cancelled the use of the old chart to actually fly. Furthermore, after American took over, they honored the certificates issued by TWA. For a trip report on one of the award trips, click here. (http://www.flyertalk.com/forum/showthread.php?t=180931)
In those days United’s Mileage Plus had a rather eclectic group of partners. Not just Lufthansa and SAS as you might expect, but also British Airways, Air France, Alitalia, Swissair, and KLM (all limited to flights or round-trips originating in the US and Canada, though).
Thanks for the trip down Memory Lane. Those were truly the days.