Photo: Flickr via dheuts
I get asked the question, “Which frequent flyer program is the best?” all the time.My response is always: “the one that works the best for you.”
However, consulting groups always try to create surveys that definitively figure out which frequent flyer truly are the best.
The only thing is, since frequent flyer programs confuse much of the general public, these results of these surveys just tend to confuse everyone even more.
The Wall Street Journal published an article the other day about the best airlines for redeeming frequent flyer miles based on research from a consultancy called Ideaworks.
The key theme is that: “The survey also signals an emerging industry trend: Airline points are more rewarding than airline miles,” and I couldn’t disagree more. Fixed-value points programs do not offer the type of aspirational awards that traditional frequent flyer programs offer, however they do offer reliability, which apparently IdeaWorks values the most.
Here’s how it went down. IdeaWorks conducted a survey of award seat availability between April and October 2011. IdeaWorks made nearly 7,000 queries on 23 airline websites to test availability. It looked at each airline’s 10 busiest long routes and 10 busiest short routes on 14 different roundrip dates between June and October, making 280 queries on each airline, so that seems like a pretty broad swath, though I’m not sure exactly what routes they were looking at.
They found that Southwest has the best award seat availability among US airlines. The worst? A tie between Delta and US Airways. The survey found that those two had no award seats available at the lowest mileage level on over two thirds of the queries submitted.
The study found that award availability increased on British Airways and United, along with JetBlue, Southwest and AirTran, though it is harder to find even standard level award tickets on American these days, probably because of the bankruptcy.
IdeaWorks carried out (and the WSJ reported on) a similar study of award seat availability on 24 airlines last year, and Delta and US Airways were at the bottom of that list as well while Southwest and JetBlue were among the top airlines for availability. In fact, the two studies came to strikingly similar conclusions, which makes me wonder why they even bothered doing another one.
Points Versus Miles
As I mentioned, the main conclusion of the study was: “An emerging industry trend: Airline points are more rewarding than airline miles.”
The study found that airlines whose loyalty programs where points are earned based on how much a passenger spends (like Southwest or JetBlue) were better than traditional loyalty programs based on miles flown (like the legacy carriers). That’s because travellers can still use these fixed-value points to find seats when fares go higher and there aren’t the same blackout dates or capacity controls.
They just have to spend more points to get that award seat. It’s just like buying a ticket for any available seat, only you’re using points to do so, rather than having to find scarce award seats available at low-mileage levels with traditional airline programs.
The article also predicts that more and more carriers will be converting their program to spend-based points systems in the next few years. The president of IdeaWorks says, “points-based systems provide better flexibility to the consumer, and they are going to become more prevalent. It’s just infinitely more efficient for everyone.” More efficient maybe…but more valuable? I’d argue not.
Here’s where I really take issue, though. The article implies that the single most important factor is award seat availability. For sure, that is a huge factor, but is it the only one? For travellers looking for the seat they want when they want it and are willing to pay the points necessary, it’s probably true.
However, for flyers who have some flexibility and want premium awards, I’d argue that, despite the lack of low-level award seats on short haul routes, there is still more value to be had from mileage-based systems. After all, a $3,000 business class ticket from the US to Europe would could cost you around 300,000 points if your points are worth a fixed value of 1 cent each, whereas you could find that same ticket for as low as 60,000 miles for an offpeak award using US Airways Dividend miles, for example.
Ups and Downs
Still, at least with the passengers flying those fixed-value airlines, these points systems seem to be quite popular. Southwest had 16% more award seat availability in 2011 compared to 2010, and the percentage of travellers redeeming points for them also increased, according to the article.
Then again, United’s availability jumped nearly 16% as well—probably due to the increased capacity from the merger, despite what naysayers had predicted (and despite complaints from United and Continental elites!).
American’s low-level award seat availability dropped from almost 63% in 2010 to just 45.7% in 2011, while Delta was at a shameful 27.1%. No wonder I’m always having to defend the airline!
Another interesting fact to note from the article: in general, discount carriers had more availability than larger global carriers (93.5% compared to 62.9%, to be exact). Does anyone else find a figure in the 90% range suspicious? Are you really telling me that 93.5% of the time, you can find the award seat you want on a discount carrier?
IdeaWorks posits that this is the case because discount airlines have fewer other perks to hand out to loyal customers like upgrades and premium airport facilities. I’d also suggest that perhaps it is because fares on these airlines tend to be lower and thus require fewer fixed-value points for redemptions that they might be more popular options for redeeming points. Still, that figure seems high.
What This Study Ignores
In my opinion, the survey is bogus because it is about one single factor: award seat availability. While that is certainly a significant feature of mileage programs, to extrapolate an entire overview of the frequent flyer world and the relative value of miles from various programs based on this criterion alone while ignoring several other key facets of any mileage program seems irresponsible to me.
Partner awards: First, they did not factor in partner award availability, which is one of the most important aspects of any frequent flyer program. Yet this inventory is not included on most airline sites–especially USAirways.com, which is a horrible site to try to book awards on.
However, you can use US Airways miles for great redemptions on Star Alliance partners like Air New Zealand, Singapore Airlines and Lufthansa, and these awards really should be ranked at about the same availability as United miles since they basically pull from the same inventory.
That didn’t make it into this study because it was all about using miles to book award seats on the same airline those miles were generated on. So no using Delta miles on Air France or American miles on Cathay Pacific according to IdeaWorks’ methodology.
Miles to points is apples to oranges: Distance-based mileage programs are very different from revenue-based mileage programs, and this study oversimplifies those differences. First, as any mileage runner will tell you, you can get a lot more miles for your dollar on many distance-based carriers, while fixed-value miles are directly based on how much money you spend on the airline. And that’s not even counting lucrative mileage bonuses you can earn through the credit card bonuses I talk about on this site all the time, which tend to be more lucrative for distance-based programs (though hey, I’ll concede the Chase Southwest card 50,000 mile sign-up bonus is pretty great). I bet if you surveyed the savviest flyers, you’d find almost all of them value miles over points, and IdeaWorks just doesn’t seem to get that.
Online booking engines are broken: The study also based its findings on bookings made online–which means, as any of you who have done online booking searches with pretty much any of the legacy carriers but especially Delta whose booking engine I say is broken all the time, but all that means to me is that this is astudy of how poorly airlines’ IT departments function rather than an overview of the actual award seat availability on an airline.
Miles’ real value: This also calls into question how best to value your miles. Again, is it a question of overall seat availability or seat availability for the particular routes and classes of service you want to fly?
What suits your needs best? The value you get from your points/miles are directly affected by whether they get you where you want to go for your particular needs. Yes, you might be able to find an award seat on a Southwest flight anytime you like that ordinarily would cost you $159–and there are a lot of flyers like that out there and it’s great that this works for them.
For my own travel preferences, I’d rather be able to find 1/10 seats in a premium class of service on a popular international route because I could literally get over 10 times the value out of my miles on such a route.
To take the other side of this–award seat availability on carriers like JetBlue and Southwest is great because when the price of a ticket goes up, you just have to pay more miles to get that ticket. Well, you can do the same thing on legacies like Delta and American through their Standard/top-tier awards–it just seems more drastic because mileage costs go up higher faster on these for last-seat availability. You can still book them, though.
I do applaud IdeaWorks for trying to figure out what’s going on in the miles and points world and taking airlines to task for how frustrating many of them make it to use your miles. However, I have a hard time agreeing that fixed-value points programs are more valuable solely because they are simpler for the consumer.
What are your thoughts?