The beginning of the end of travel rewards?
#16
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Original Poster
Join Date: Aug 2018
Posts: 590
In a few years, you may find that F awards cost upwards of 300,000 miles one way. So that's not literally "the end" but it basically is the end.
#17
Join Date: Jul 2013
Location: IAH
Posts: 488
I'll be honest, from a selfish point of view I'd be quite happy to see the big sign up bonuses die or at least get clamped down. They were always distorting the market and they created a lot of competition for premium seats - I'd be happy to see them go.
If that happened and it managed to take down some of the bloggers as well, I wouldn't shed a tear. Don't think many of them add much value to the conversation these days.
If that happened and it managed to take down some of the bloggers as well, I wouldn't shed a tear. Don't think many of them add much value to the conversation these days.
#18
Join Date: May 2009
Location: South Park, CO
Programs: Tegridy Elite
Posts: 5,678
#19
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Join Date: Jun 2001
Programs: DL 1 million, AA 1 mil, HH lapsed Diamond, Marriott Plat
Posts: 28,190
AA, DL and UA (in their annual reports) have all acknowledged they sell more miles than they award through their own flying. That's not to say those sold miles are all credit card bonuses. There are plenty of sources of mile issue inflation.
#20
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Join Date: Dec 2002
Location: Danville, CA, USA;
Programs: UA 1MM, WN CP, Marriott LT Plat, Hilton Gold, IC Plat
Posts: 15,716
As one who has been in the game from the beginning (or fairly close - I redeemed one of my first reward tickets on PSA, in 1986) I can honestly say that the game is always changing, and usually not to benefit the customer.
- In the 1990s it was easy to get elite upgrades at the lowest status levels (as a United 2P, no less) and the award pricing was great (e.g. DL 75k award for 2 F tickets to Hawaii - with lots of inventory). But credit card signup bonuses were pretty weak.
- In the 2000s the hotel programs really started to shine with Hyatt FFN awards (stay 2 nights, get 1 free). The 9/11 tragedy also brought some stellar deals as airlines sought to get people flying again (think AA's "Fly 2 trips, get a free ticket anywhere we fly"). There were also a number of mistake fares that were honored and largely flew under the radar because there were fewer bloggers and no twitter.
- In late 2000s everyone blogger with a heartbeat jumped on the churning bandwagon as credit card signup bonuses spiked and there were no limits on how many times you could get a bonus (well except for your credit score).
- After 2008 recession, programs have been gradually dialing back the perks as airplane seats and hotel rooms are near capacity. Elite benefits are plummeting.
- Over past 3 years banks have finally started to address churning and eliminated most opportunities. It is not clear to me why they did not do this 10 years ago, but maybe there was still profit from these transactions due to their relationships with travel providers. In any case, the bonuses remain high, but generally for new customers or new products.
#21
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Join Date: Jul 2001
Location: Watchlisted by the prejudiced, en route to purgatory
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Extreme devaluations in mileage awards have happened even for mileage programs where credit card bonuses have been miserly or nowhere near as widely popular as they have been with US airline programs.
#22
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Join Date: Jul 2002
Location: MCI
Programs: AA Gold 1MM, AS MVP, UA Silver, WN A-List, Marriott LT Titanium, HH Diamond
Posts: 52,555
One huge change that has impacted me - both positively and negatively - is that airlines now actually try to sell their F/J seats to individual buyers on many routes.
In the 90's, it was almost exclusively corporate buyers + upgraders. Airlines would price the seats astronomically high and then give corp discounts of 40-50% if not more. (I know some of my J tickets for work in the 90's, ex-ORD on AA, were 45% off list price.) Since the corporate travel didn't fill every seat, and you could kind of predict when it wouldn't fill the seats, the upgrade game was quite a bit better.
Now, airlines have realized that individuals will buy the seats and pay a profitable premium for them. They can use a few simple fare rules (advance purchase, nonrefundable, etc.) to firewall the individuals from the corporate buyers and collect a lot of revenue from the seats without cannibalizing the full-J sales.
The positive angle, for me, is that now I've actually bought a few J and F tickets for leisure trips. Trips where the total F/J airfare is equal to the cheapest coach seat + an "upgrade fee" I find reasonable for the product. The negative angle, of course, is that awards are often a lot harder to find...
In the 90's, it was almost exclusively corporate buyers + upgraders. Airlines would price the seats astronomically high and then give corp discounts of 40-50% if not more. (I know some of my J tickets for work in the 90's, ex-ORD on AA, were 45% off list price.) Since the corporate travel didn't fill every seat, and you could kind of predict when it wouldn't fill the seats, the upgrade game was quite a bit better.
Now, airlines have realized that individuals will buy the seats and pay a profitable premium for them. They can use a few simple fare rules (advance purchase, nonrefundable, etc.) to firewall the individuals from the corporate buyers and collect a lot of revenue from the seats without cannibalizing the full-J sales.
The positive angle, for me, is that now I've actually bought a few J and F tickets for leisure trips. Trips where the total F/J airfare is equal to the cheapest coach seat + an "upgrade fee" I find reasonable for the product. The negative angle, of course, is that awards are often a lot harder to find...
#23
FlyerTalk Evangelist
Join Date: Jan 2005
Location: home = LAX
Posts: 25,932
Citibank - the jig is up...
So they didn't start to address churning only 3 years ago, it's just that they greatly ramped up their anti-churning efforts in the past 3 years.
For another example, Chase's 24 month wait since you earned the last bonus was an anti-churning step that originated many years ago. It was just not nearly as big an anti-churning step as 5/24 which came more recently.
#24
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Join Date: Jul 2001
Location: Watchlisted by the prejudiced, en route to purgatory
Programs: Just Say No to Fleecing and Blacklisting
Posts: 102,095
One huge change that has impacted me - both positively and negatively - is that airlines now actually try to sell their F/J seats to individual buyers on many routes.
In the 90's, it was almost exclusively corporate buyers + upgraders. Airlines would price the seats astronomically high and then give corp discounts of 40-50% if not more. (I know some of my J tickets for work in the 90's, ex-ORD on AA, were 45% off list price.) Since the corporate travel didn't fill every seat, and you could kind of predict when it wouldn't fill the seats, the upgrade game was quite a bit better.
Now, airlines have realized that individuals will buy the seats and pay a profitable premium for them. They can use a few simple fare rules (advance purchase, nonrefundable, etc.) to firewall the individuals from the corporate buyers and collect a lot of revenue from the seats without cannibalizing the full-J sales.
The positive angle, for me, is that now I've actually bought a few J and F tickets for leisure trips. Trips where the total F/J airfare is equal to the cheapest coach seat + an "upgrade fee" I find reasonable for the product. The negative angle, of course, is that awards are often a lot harder to find...
In the 90's, it was almost exclusively corporate buyers + upgraders. Airlines would price the seats astronomically high and then give corp discounts of 40-50% if not more. (I know some of my J tickets for work in the 90's, ex-ORD on AA, were 45% off list price.) Since the corporate travel didn't fill every seat, and you could kind of predict when it wouldn't fill the seats, the upgrade game was quite a bit better.
Now, airlines have realized that individuals will buy the seats and pay a profitable premium for them. They can use a few simple fare rules (advance purchase, nonrefundable, etc.) to firewall the individuals from the corporate buyers and collect a lot of revenue from the seats without cannibalizing the full-J sales.
The positive angle, for me, is that now I've actually bought a few J and F tickets for leisure trips. Trips where the total F/J airfare is equal to the cheapest coach seat + an "upgrade fee" I find reasonable for the product. The negative angle, of course, is that awards are often a lot harder to find...
#25
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Join Date: Jul 2002
Location: MCI
Programs: AA Gold 1MM, AS MVP, UA Silver, WN A-List, Marriott LT Titanium, HH Diamond
Posts: 52,555
I recently redeemed 5,500 miles for a $120 one-way DL ticket and got excited about it. I know there's no way my limited stash of DL miles will ever get me into a long-haul J seat.
My best stash for long-haul J is AS, and I figure I've got one more big redemption left...once the merger dust fully settles, they'll probably gut that program too.
#26
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Original Poster
Join Date: Aug 2018
Posts: 590
It's all part of the drive towards a future when even Flyertalkers are back to looking for value in their miles through short cheap coach tickets. As the J/F awards get taken off the board, that's what's left. Since airline advertising to the masses is always expressed in terms of these flights, they'll probably still be there.
I recently redeemed 5,500 miles for a $120 one-way DL ticket and got excited about it. I know there's no way my limited stash of DL miles will ever get me into a long-haul J seat.
My best stash for long-haul J is AS, and I figure I've got one more big redemption left...once the merger dust fully settles, they'll probably gut that program too.
I recently redeemed 5,500 miles for a $120 one-way DL ticket and got excited about it. I know there's no way my limited stash of DL miles will ever get me into a long-haul J seat.
My best stash for long-haul J is AS, and I figure I've got one more big redemption left...once the merger dust fully settles, they'll probably gut that program too.
#27
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Join Date: Dec 2002
Location: Danville, CA, USA;
Programs: UA 1MM, WN CP, Marriott LT Plat, Hilton Gold, IC Plat
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With price of J falling this may even be a better option now - 70k UR transfer for hard-to-find TATL one-way in J vs $1400 cash back on a 2% card - and we are seeing quite a few tix at that price or lower.
#28
Join Date: Jun 2015
Location: DTW
Programs: Alaska, Delta, Southwest
Posts: 1,663
I can’t speak for anyone else, but if TATL/TPAC J//F awards are taken off the board then I will simply revert to a 2% cash back card and maybe occasional hotel card. Ditto for the bank cards - I don’t need Chase or Amex points if they don’t transfer to a partner that offers what I need.
With price of J falling this may even be a better option now - 70k UR transfer for hard-to-find TATL one-way in J vs $1400 cash back on a 2% card - and we are seeing quite a few tix at that price or lower.
#29
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Join Date: Jun 2003
Location: Miami, Mpls & London
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Posts: 48,952
Perhaps this is one reason that we now see no-annual-fee AA and DL cards that earn 1 mile per dollar, and free (or low fee) cards that earn more than one transferrable point per dollar? Think of award tickets in terms of the amount of spending required for a ticket, rather than the number of miles.
#30
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Perhaps this is one reason that we now see no-annual-fee AA and DL cards that earn 1 mile per dollar, and free (or low fee) cards that earn more than one transferrable point per dollar? Think of award tickets in terms of the amount of spending required for a ticket, rather than the number of miles.