Time to cash your FF miles
 

I received this in a Joe Brancatelli email today. I am not a "member", so I am not able to read the whole story. Has anyone on this forum read the article? Does anyone give this any credence?

"BRANCATELLI FILE: TIME TO CASH YOUR FREQUENT-FLYER MILES
Allow me to offer you this bit of practical advice: Cash your frequent-flyer miles. Cash them as soon as you can. Cash them today, because tomorrow they are guaranteed to be worth less. the business cycle of the Big Six is eroding the practical value of your miles as each day passes. Read how and why you should cash out at http://www.zyworld.com/brancatelli/MEMBER/bf.htm


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Richard Laakso PM 2.8MM Starwood platinum

First of all Brancatelli is a bit of a crank, he has nothing positive to say about any airline unless it is JetBlue or Southwest which he seems to think is the only sensible way to run an airline. However, I think he is right that you should use miles now since they are going down in value. But that doesn't take a genius to figure out, airlines have been changing programs to reduce the value of miles on a regular basis for the last two years. And there are plenty of people on these boards who have been advocating cashing in your miles for a long time.

One of his reasons is an estimated 25% decline in the value of miles over the next ten years.

Does it really make sense to use up 250,000 miles this year on a trip that you're making just to use up miles or wait three years for a trip you really want to make even if it takes 300,000 miles then?

A bit of a crank? Can he say anything nice? He never sees anything half full. Its always doom and gloom.

Good advice. Cashed in all my NW miles this past week to book two trips from HNL-BOS. Not quite the steal I wanted (one standard and one rulebuster award), but having only 458 miles in my account puts my mind at ease... or does it?

I think many like to have a high balance in their FF accounts because people think more = better like as it is for money. Either way, I'll try to keep my balances in check.

ALOHA

Sure Joe is a bit of a curmudgeon, but he often nails some key issues. His "Why we love Coke and hate the airlines" essay a few years ago was one of the funniest and inightful things I've read about the airlines.

BTW, I agree that the value is decreasing. I haven't found a restricted/saver award for quite a while, but of course the standard awards are easily available on the same flights. The "prices" for free travel have been raised without really changing their published structure.

I think this is a combination of several factors. The first is the massive number of accumulated miles in the accounts of all the people flying prior to economic downturn/terrorism/SARS/whatever reason they chose to reduce flying. The second is the reduction in total flights (and therefore total capacity) across the board. I'd guess that the percentage of seats on a plane that are allowed to be saver awards is roughly the same is a few years ago, but now there are more people trying to get fewer available award seats.

Personally, I'm saving miles for use on a "big" trip in the next year or two, or in the event a last minute emergency comes up and I don't want to pay a last-minute full-fare ticket. I don't plan for my balance to ever make it to seven figures. http://www.flyertalk.com/forum/smile.gif

It's interesting to contrast Brancontelli's comments with the article in Randy's latest magazine regarding saving up miles for retirement.

My somewhat uninformed guess is that deals both to earn and to burn miles will ebb and flow with the economy and the health of each airline.

So, I'll keep earning, and keep cashing in for my annual trip overseas, and will adjust my strategy when it becomes necessary.

JP

I've reduced my miles by 2/3 the past year.

I have enough (mid 200's) for last minute trips abroad/domestic, yet I will not hoard like I used to.

I now feel that hoarding miles is like putting $ under the mattress. The miles are not working for you.

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Visit FlyerTalk Dining http://flyertalk.com/diningfr.shtml

Maybe because there's nothing positive to say these days. Ya think???

His facts are accurate and his conclusions are logical. Any way you cut it, airline service has deteriorated substantially in the last few years!



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Think of how stupid the "average person" is, then consider that half of them are dumber than that! -George Carlin

I've taken Brancatelli's advice to heart. I've burned over 3 million miles in the past 5 years. I'm one of those that need a vacation from my vacations. I believe miles will continue to deteriorate in value, but more importantly, the raison d'etre of accumulating miles, to vacation worldwide in nice historic, scenic or cultural spots will also continue to be undermined by events outside our control, wars, politics, pollution, rampant tourism, even our own health, financial or family events. I've rather take advantage of my and my spouse's current state of health and the airlines current state of health and go where we can. So what if we have 0 miles banked when we're retired. We can always go fishing, if fishing still exists.

I was taking his advice before he gave it and burning miles as radidly, but as prudently, as I can.

Joe is right-on about the clueless heads of the major airlines. And I also agree with him about JetBlue. It is now my airline of choice. The fare value is incomparable! Since Southwest doesn't fly into NYC, I am not faced with the questionable choice of using it.

I am both a fan and supporter of JoeSentMe.com.

How do you maintain any Elite level, if you are intent on using up your stored FFer miles?

Do you get different treatment on Award tickets when you are Elite and non-Elite?

I suspect you are just another passenger, when you don't have any Elite clout!

I take a different point of view.

It seems to me that airline prices are about as cheap now as they have ever been. So it is not unreasonable to me that airline prices are as cheap as they ever will be. Therefore I have been saving my miles and am buying tickets.

Sure the airlines might devalue the miles. But it seems more likely to me that they won't devalue the miles and they'll increase the price of tickets. In that case, miles are a great hedge on inflation.

Joe does seem to have a bit of a vendetta toward the bix six airlines - his columns in IF seem to rip them month after month while he praised the cheap carriers. Though, by contract, he was featured in a Q&A column where he said that if he had to take one airline and one only it would be AA. I guess those cheapies are only good if you need the limited routes they serve and you do not need international flights.

In any case, I partially agree with him that I would not trust airlines to "be my bank". I spend miles when I have the chance to get a reasonable value for them but I would not "take a run at the miles bank" to burn as fast as possible. I will save them for a good use. Considering that I really only earn them for things that I would buy anyway, they are, to me, a bonus. Even if I lost all of my miles that I have now, I still have made enough return on what I have redeemed that they were worth it. Do the miles influence my purchase decisions - sure - if the flight routing, price, etc. are all nearly equal - but I will not spend more hours in flight for more miles, drive to a further airport for more miles nor will I spend more money (unless it is negligibly more) for more miles.

As for the IF article on the "travel 401k" of miles - I would not go that far, I would rather save cash that earns interest and is much more easily used to acquire travel than any points/miles. Not only that, but I am no longer a frequent business traveller and do not accumulate miles as quickly as I used to.