Big Changes in Frequent Flier Programs
Mergers have dramatically consolidated the airline industry, reducing the number of carriers, flights and competition. One of the overlooked factors of this consolidation is the significant change in frequent flier programs.
Airlines are now rewarding how much members spend rather than just the number of miles they accumulate.
In January, Delta Airlines and United Airlines started requiring cardholders to spend $2,500 in addition to logging 25,000 miles in order to obtain the lowest level of seat. Spending requirements are waived if a loyalty program participant spends $25,000 a year on purchases with a carrier co-branded credit card.
Airlines say the change is to reward their best customers and give the bigger rewards to the customers who spend the most money. Jet Blue and Southwest Airlines already had expenditure-based loyalty programs.
As airlines have consolidated to four major carriers–United, Delta, American and Southwest–fewer competitors mean airlines now have more power to make these changes. Some experts say the days of the free domestic ticket for 25,000 miles will soon be over and the airlines will be happy to see them go.
Some carriers have also increased their mileage requirements on premium reward travel. For example, Delta increased the miles for a “Saver Seat” to Hawaii from 40,000 to 45,000 Sky Miles. United’s Mileage Plus members need to spend 30 percent to 40 percent more miles to get a free seat on any Star Alliance partner airline.
American Airlines is merging into US Airways and has yet to make any changes. Citi will soon issue new credit card accounts for the combined American Airlines AAdvantage frequent flyer program. The two frequent flyer programs are expected to merge in 2015.
If you have saved airline miles, it may be time to use them before they lose more of their value and seats become harder to find. Many industry analysts advise flyers to start planning a trip almost a year ahead of time and avoid peak vacation times to obtain a better value.