Navigating the Landscape of Airline Loyalty Programs in 2015
Many of the nation’s airlines have tweaked their frequent flier programs in recent years, but 2015 will be a key point in their broader evolution. Since the first program, American Airlines AAdvantage, was launched in 1981, nearly all airlines have rewarded their customers with miles based on the distance that they fly. The problem with this design is that distance bears no relation to cost.
Some frequent fliers, known as “travel hackers,” take advantage of distance-based programs by earning lots of miles on cheap flights and then redeeming them for more expensive award tickets. Some would argue that these so-called mileage runs pose no problem to the system if these passengers are occupying seats that would otherwise go empty (cheap fares and open award space sometimes reflect limited demand).
On the other side are business travelers who actually pay for expensive tickets and blame these travel hackers for devaluing the benefits of elite status. In the extremely cyclical airline industry, a few executives probably wouldn’t mind the economic security of closely linking rewards to the revenue delivered by each customer.
See: Are Frequent Flier Programs a Fool’s Game?
Delta Air Lines and United Airlines focus on revenue
United Airlines and Delta Air Lines, two of the biggest carriers in the world, will rely almost entirely on the price of your ticket to determine the number of miles earned in 2015, though some of United’s changes don’t kick in until March 1.
Customers with no elite status will only earn 5 miles per dollar, so a 5,000-mile, roundtrip flight across the country will earn only 1,500 miles if you bought it for $300. A frequent flier with top-tier status could earn up to 11 miles per dollar, or 3,300 miles for the same ticket. But if he or she were to buy a $1,000 fare on the day of departure, they could earn between 5,000 and 11,000 miles, even if it’s for a short flight between Boston and New York.
Minimum spend requirements for elite status were implemented in 2014, but in 2015 they increased 20 percent, starting at $3,000 for basic silver status and going as high as $15,000 for the top tier (members are also required to fly a certain number of miles). Sporadic travelers may find it better to give up on status altogether and just apply for an airline credit card that includes a free checked bag and priority boarding.
American Airlines and US Airways join forces
First announced in 2013, the merger between American Airlines and US Airways will take a long time. One major step in this process is integrating the two loyalty programs under the American AAdvantage name, which is expected around March 2015. Many features of the AAdvantage program will be maintained, as the company wants to stay focused on completing the merger. But customers of each airline might still see some improvements.
First, the bad news: US Airways Dividend Miles has four elite tiers, while…