Mileage Pro The Insider's Guide to Frequent Flyer Programs

FOR THE MAJORITY OF TRAVELERS—those who fly either occasionally or moderately—often the goal of earning miles is a free trip. For true frequent flyers—the programs’ top 10 percent, typically business travelers—the lure of a free trip takes a back seat to the benefits of earning elite status, including upgrades, priority boarding and other perks designed to soften the hard edges of life on the road.

Whether it is an award ticket or elite status, frequent flyer miles only have value when a program participant has accumulated enough miles to reach an award threshold. In most programs, domestic coach awards require 25,000 miles and entry-level elite status is earned for flying 25,000 elite qualifying miles during a calendar year.

Since combining miles in most programs is not allowed, 25,000 miles spread among multiple programs prove to be effectively worthless. On the other hand, if all 25,000 miles had been earned in a single program, the member could cash in for a free ticket and possibly reach elite status. As noted, elite status is granted if the miles were earned within a calendar year, including miles earned on elite qualifying partner carriers.

Comparing the value of miles divided among numerous programs to the value of miles consolidated in just one program highlights the importance of earning your miles in a single program.

Here is an example. Let’s say you have 4,300 miles in Continental’s OnePass program, 8,700 miles in a US Airways Dividend Miles account, and 2,100 miles in a United Mileage Plus account. Individually, you have nothing of value to use toward a free trip. However, had you diligently earned these same miles (a total of 15,100) with a single airline, you would probably be eligible for a free airline ticket. (Say you had chosen United as your preferred airline, you could have taken advantage of their current ticket award offer of 15,000 miles.)

Choose ’Em and Use ’Em
Since there is no cost to join a loyalty program, the natural tendency is to sign up for each and every program of each and every airline, hotel and rental car company you patronize. But that leads to award dilution—many miles but few actual awards. And monitoring and managing participation in a multitude of programs can be a real time killer as well.
The key to maximizing awards is picking one program and, as much as possible, confining your mileage earning within that program’s network of partners. Which program to choose? It is not a matter of comparing airline programs and ranking them according to the most robust lineup of partners, or the best record of accommodating award requests. The best program is the one that best fits your existing travel and shopping patterns. It is the one that awards you the most miles for the most transactions at the least cost and with the least inconvenience.

As for those program members who earn the majority of their miles from flying, the best program is the one whose airline partners offer the most flights and the best schedules on the routes most often flown.

If the choice of programs boils down to the choice of airline, the choice of airline is driven by two related considerations: The traveler’s hometown airport, which defines the universe of available airlines, and the traveler’s habitual flight destinations, which narrows the list further to those airlines serving the desired city pairs. The best approach is to join the program hosted by the airline you will be flying most often. Then, concentrate your travel and non-travel purchases with that airline and the airline’s partners. The miles and awards will follow.

Tiebreakers
Generally, the combination of a traveler’s local airport and customary travel patterns is enough to establish one airline as the best fit for both flying and mileage accumulation. If not, the following information may help narrow the field.

• Route coverage — It used to be the airline program with the larger route network trumped the program of the carrier with the smaller network simply because it is easier to earn miles within a larger network than within a smaller one. That remains true today, but rather than consider just the program’s route network, you also want to factor in the extended route network created by the airline’s participation in one of the three global airline alliances: oneworld, SkyTeam and Star Alliance. For purposes of earning and redeeming miles, and for earning elite status, an airline’s participation in an alliance can be very helpful. Travelers can earn and redeem miles with their airline’s alliance partners, and they can earn additional elite status in the alliance. Another benefit when traveling internationally is being able to use the alliance partners’ airport lounges—as long as the traveler has elite status with his or her primary airline or has earned elite status with the alliance. (See the Using Airline Alliances chapter on page 119 for more information on alliances and their relationship to mileage programs.)
• The ideal airline will cover at least 60 percent of the cities to which you fly, and its partners in one of the global alliances will be in line with your other travel needs. If you travel to Europe once or twice a year, make sure your airline, or one of your airline’s international partners, covers that distance. You will miss too many miles if you do not choose wisely in the beginning.
• Program partnerships — Just as a program’s network of airline partners translates into opportunities to earn more miles and take award trips almost anywhere in the world, the program’s non-airline partners also enlarge the universe of opportunities to earn miles for, well, just about any transaction that involves an exchange of money for goods or services.
• For example, on a flight from Chicago to Denver, you will earn between 1,500 and 2,000 miles (roundtrip) depending on your airline’s program. An affiliated hotel partner can add 500 to 1,000 bonus miles to that total, and a partner car rental can add another 50 to 500 bonus miles.
• Not all programs are equally generous when it comes to making seats available for award travel or upgrades. Unfortunately, there are no definitive data available on redemption success rates. But it is worth checking with other frequent travelers to see whether competing programs are doing a better or a worse job of meeting member expectations.
• Mileage expiration — Loyalty programs of JetBlue and other discount airlines have mileage expiration policies that make their loyalty programs inferior to those of major airlines. In some cases, miles expire after just one or two years, regardless of your activity. For slow but steady earners, programs with these types of expiration policies will only be an exercise in frustration and disappointment.
• Mileage earning rate — Among airlines, a mile is a mile. But some airlines offer double and triple mileage promotions more often than others. During the past two years, British Airways has offered its members a chance to earn as much as 50,000 bonus miles when flying transatlantic during the slower winter months. Also, when airlines introduce new route service to an area, they often offer double miles or triple miles as an incentive. When Alaska Airlines offered new twice-daily service to Dallas in September 2005, they offered all their members double miles for a period of two months.

Hotel programs’ earning rates are more difficult to compare. Some offer ten points per dollar spent, others five, four or even one. To calculate which program will allow you to accumulate the most value for each dollar spent, take the folio amounts for your last five hotel stays and multiply them by the spending ratios of each of your top three hotel choices (within your travel budget), then compare that amount with the award chart from each hotel’s program. That will give you the rate at which credits are earned for each program. We suggest leaving out partner bonuses and relying on the base rate of earning. Keep in mind that some hotel programs allow double dipping, earning both hotel points and airline miles for the same stay. That puts a kink in our equation, but you can at least get an idea of what you are earning.

• Minimum miles per flight — If you live in Phoenix and fly regularly to New York for business then skip this advice. But if your travel calendar is typically filled with short hops, minimum mileage is important. For instance, for someone traveling regularly between Chicago and Detroit, a program offering a 750-mile minimum will be 50 percent better than one offering a 500-mile minimum. Do not underestimate the importance of minimum miles.
• Flight conjunction requirements — Some hotels and
• car rental companies require that flights be in conjunction with hotel stays or car rentals in order for members to earn miles.
• Award transferability — If you are not married, this might be an important factor. Find out whether you can give awards to anyone you choose, especially a business partner or a friend. There is nothing more frustrating than being the only person eligible to use an award when you have more mileage in your account than you can use.
• Companion tickets — Which program has companion tickets at lower mileage requirements that will allow you to take your spouse or children along on a paid business trip?
• Which upgrades are “fare” to use — If flying in first class is your favorite benefit, make sure your airline program has a reasonable mileage redemption policy for upgrades and has eligible first class fares that you are willing to pay. If you are flying on discounted coach fares, as most people do, consider only airlines programs that allow you to upgrade from any published fare as opposed to full fares only.
• Airline stability — Due to the unstable nature of the airline industry, make sure the airline with which you plan to earn miles is relatively healthy and not on the brink of bankruptcy. When Midway and Braniff airlines went out of business, thousands of frequent travelers lost hundreds of thousands of frequent flyer miles. Given the choice, select an airline that is likely to still be in business when you are ready to use your hard-earned miles.
• Affinity Credit Cards — It is almost impossible to travel these days without some kind of credit card. Smart frequent flyers are those who have traded their existing Visa and MasterCard credit cards for cards affiliated with the airline or hotel programs to which they belong. This is not an additional credit card; it simply replaces the one you have. Affinity credit cards offer the same credit privileges as your other credit cards, but in addition to enhanced travel benefits, such as bonus miles and points just for signing up and additional insurance and collision damage waivers for car rentals, they offer the ability to earn one bonus mile or point for every dollar charged to the card.

Make Room for Hotel Programs
Frequent travelers traditionally have supplemented their airline program earnings with points accrued in the frequent guest programs of one or more major hotel chains.

While hotel programs are rarely treated as primary programs, it is handy (and financially prudent) to have enough points in a frequent hotel program to redeem free hotel nights or to combine free stays with free air tickets when constructing a complete travel package.

In fact, as airfares have declined over the past few years hotel rates have risen, thus the hotel portion of a trip’s cost has increased. So, there is more reason than ever to make free nights a priority.

As with airline programs, the most effective approach is to choose a hotel program that best fits your travel patterns, such as a program hosted by a hotel chain that has hotel properties at the right price points and in the right locations.
For a time, airline programs offered hotel stays as awards. That practice was discontinued, but seems to be making a cautious comeback with American and United recently restoring hotel nights to their award charts. American charges a fee to redeem miles for hotel awards and United limits them to elite members.

A Place for Charge Cards
Some knowledgeable mileage earners participate in one of the two multi-currency charge card programs, American Express Membership Rewards and Diners Club Rewards. As discussed in greater detail in the credit card chapter on page 43, points earned in the Membership Rewards and Club Rewards programs can be exchanged for miles and points in participating airline and hotel programs.

The strategy is to maintain a cache of these convertible points as a reserve account, to be tapped into when other airline or hotel accounts need topping off to reach an award threshold.

Buyer or Flyer?
Frequent flyer programs have evolved to accommodate a wide spectrum of consumer behavior, from those whose earnings derive exclusively from travel, to those who earn awards solely from shopping.

Along the way, we have seen two notable outbreaks of competing programs, expressly designed to wean the frequent buyer group away from their allegiance to airline programs: Online shopping rewards programs and credit card travel rewards programs. Both types of programs are modeled after airline programs, oftentimes awarding miles for transactions (even though there is no travel involved) and featuring airline tickets as awards.

The online shopping rewards programs were early attempts at Internet marketing, with names such as AllAdvantage, Beenz, ClickRewards, CyberGold, DeltaClick, Freeairmiles.com, FreeRide, GiantRewards, Milesbar.com, MileSpree, Milesource.com, MyPoints.com, Silverclicks, SmartMile and WebMiles.com. Most fell by the wayside when the dot-com bubble burst in 2000. Those that remain, such as ClickRewards.com and MyPoints.com, are shadows of their former selves. Travel rewards programs linked to bank-issued credit cards, by contrast, are currently in growth mode.

All major banks have their own offerings, which are independent of the airline programs: Bank of America’s MilesEdge Visa, Bank One’s Travel Plus Visa, Chase’s Travel Rewards
MasterCard, MBNA’s WorldPoints Visa and so on.

In late 2004, Citibank (which also issues program specific cards for American Airlines and Hilton Hotels) launched its own entry, the PremierPass MasterCard.

Because miles earned for using these cards are proprietary—for example, they cannot be combined with miles from other programs—they generally have not found much favor with travelers who tend to use affinity credit cards associated with their chosen airline or hotel program.

Enroll: The Electronic Edge
As in other areas of operations, the airlines (and to a lesser extent the hotel chains) have been slowly but steadily moving many customer transactions onto their Web sites.

JetBlue’s program, TrueBlue, is entirely online. No physical membership card; no paper account statements or newsletters. While other programs retain offline as well as online components, the trend is clearly in the direction of Web-based programs.

And that online functionality begins with signing up for the programs. Every program of any significance allows new members to enroll online. Elsewhere in this book, we have listed Web site addresses for most of the North American programs (on page 183).

And for those who have yet to embrace Web-based technology, yes, you can sign up by phone. You will find contact numbers on page 183 as well.

REMEMBER THIS:

• There is no single “best” program. (If there were, everyone would join
• that program and no others.)
• Join the program that allows you to earn the most awards and perks,
• with the least hassle.
• To earn the most awards, and maximize the chances of reaching elite status, concentrate mileage earning in as few programs as possible.