In an effort to get customers to use up their Frequent Flyer Miles, the airlines are decreasing the miles required to book tickets. This will also increase the number of seats on an aircraft that will be available for rewards while enhancing the buying power for each mile. Adding to all of this, the cost for redeeming miles has declined in teaming with airfares.
It has shown that between 2013 and 2018, the six largest U.S. carriers have become much more generous in order to increase the level of redeemed miles. The Bloomberg report is assembled from research and data from IdeaWorks Company and CarTrawler. These two companies found the average price for reward tickets has dropped by 13.5% during their study period.
Airlines have changed their approach by moving their award miles away from the distance flown to the cost of the ticket.
Delta, United, and American had switched to a revenue-based mileage accrual program during 2014 and 2016. This actually is an approach that smaller airlines such as Southwest and Jet Blue have been doing for many years.
Even better news, the airlines are increasing how loyalty miles can be used. As an example, Delta will now allow passengers to use points toward an upgrade, even after a ticket has been purchased. Delta’s rewards program had been repeatedly named among the best and has increased the number of SkyMiles flash sales it holds. Also, Delta is now offering one-way ticket for only 5,000 award miles.
President of IdeaWorks, Jay Sorensen, said that for a long time the airlines have stopped caring if a ticket is sold with money or miles. For many years, there was a negative undertone, from a revenue standpoint, if they sold a seat using miles in general.
Now, they are recognizing these loyalty programs are actually of enormous value. Airlines are realizing there is still money to be made from customers who travel on redeemed miles. In many cases, travelers will use cash to purchase other products and services instead.
In 2016, American Airlines slashed prices in some of their award categories and the following year, they increased available awards with its AAdvantage program. This includes awards that can be used on connecting flights.