Frequent Flyer Miles to be Worthless?
 

Just watched the President of Aviation Dynamics interviewed on the Business News Network...he states there will be a number of smaller carriers in the U.S will enter into chapter 11 proceedings in the near future due to the cost of fuel, inefficient/ineffective management and lack of cash liquidity. Air Trans to be the first?

He also states the he expects that Frequent Flyer Miles will become worthless as all airlines strive towards 100% payloads, he reiterated "worthless" at least twice.

I wish I had a link for you...

Well that's pretty scary. I personally think Spirit will be the next to go but I do thing that there is hope for the miles/points of CO, UA, etc but do agree the smaller carriers have got to be in trouble.

With airlines charging more and more fuel surcharges on frequent flyer mileage tickets, "free tickets" have become worth less -- and as fuel surcharges increase (instead of being reflected in the fare directly) miles become worth less and less.

Worth less - yes, in general but not for all programs for all flyers.

Worthless - can't see that happening.

I currently have two trips ticketed in F, trancons for the family (two adults, two kids) (SFO<->JFK & SFO<->MCO). The month in which I booked the MCO trip is still wide open for F & coach. Each ticket cost me $10 to support the comical TSA. That's it.

I have been hearing people complaining for years how there's no availability for seats. Bull-puckys. I've never had a problem getting seats if when I am willing to think ahead a few months--and my kids have been lots of places on award tix.

I have to agree with Pushback. I've never had a problem redeeming miles, and I've used them to travel both domestically and internationally. While I've never tried to redeem miles for a trip to Hawaii at Christmas (and have no interest in going to Hawaii, anyway), I've always gotten tickets to my destinations of choice within a few days of my planned travel dates.

That's the key. Bottom line? Burn 'em as you earn 'em. Inflation is coming and your mileage investment earns no return.

The Link has been posted on the BNN website:

http://watch.bnn.ca/the-business-new...008/#clip57573

Talk specific to frequent flier miles is at 6:25 although I encourage you to listen to all of it.

To my knowledge, no US-based airlines apply fuel surcharges to award tickets for US-based passengers, so fortunately this is not something a lot of us have to worry about (yet). There was some speculation on other threads as to why this may be, but there never was a definitive answer.

Doubtful. FF programs are the only profitable business operation at many carriers.

Now you will certainly find miles depreciating in value as the redemption requirements go up and the inventory disappears as capacity shrinks. So in some sense the programs will be worthless for certain awards.

But the programs are here to stay.

As for bankrupt carriers, well, that's always been a risk. Sometimes things work out great (PanAm, TWA) where another carrier buys the program, and sometimes they don't (Braniff, Aloha).

as long as i can get longhaul F i dont care what it costs...

after watching the report I'm inclined to agree--it isn't so much that the airlines will inflate the miles needed to redeem rewards tickets (although they may in fact do that), but they will limit the amount of reward seats available for flights. This in turn will make it more and more difficult to book. Thinking very seriously of cashing in a good chunk of my miles in the next 6 months.

This is not necessarily true. If the number of miles needed to redeem a particular ticket remains steady while the free market price of that ticket rises, the frequent flier mile currency is actually gaining value along the lines of the price increase. In recent months, this has been precisely the case with major US carriers. (There are exceptions, of course, but in general, prices in dollars have risen while prices in miles have remained the same.)

I don't see Air Tran going under anytime soon. I think DL would like to see them go however.

Isn't DL now charging fuel surcharges for ex-EU itineraries, regardless of where the customer is based?