US: Airlines want you to burn your miles

As seats shrink and fees multiply, it’s hard to find value from an airline these days. Except when redeeming frequent-flyer points. The six largest US carriers grew more generous from 2013 to 2018 as they sought to encourage mileage redemption. The average price, in loyalty miles or points, for a domestic rewards ticket declined 13.5% over that time, according to data compiled by IdeaWorksCompany and CarTrawler. “Airlines are recognising that in order for the loyalty program business to be sustainable longer term, consumers have to stay engaged and continue to want to earn this currency,” said Joe DeNardi, a Stifel analyst who tracks reward travel. “One way is to allow them to use it more effectively.” To entice travelers to use—rather than hoard—their miles, airlines have decreased the number of miles needed to book a ticket, increased the numbers of seats per plane available for rewards travel, and enhanced the buying power of each mile. The prices to redeem miles have also declined in tandem with airfares. To be sure, not every flight has seen these generous changes, and airlines tend to offer better prices on off-peak flights where they won’t sell as many seats. Carriers have also shifted the method of awarding miles from distance flown to a ticket’s price. Delta and United Continental swapped to revenue-based mileage accrual in 2014 and American Airlines followed two years later. That put all three legacy carriers in line with the accrual method both Southwest and JetBlue have used for years. Carriers no longer care “whether they sell a seat with dollars or miles,” said Jay Sorensen, IdeaWorks president. “Historically it was negative from a revenue standpoint if they sold a seat with miles in general. Now airlines are recognizing that these loyalty programs are tremendously valuable.”<br/>