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The airline industry is experiencing a little turbulence of its own. Independence Air is now defunct. Delta, Northwest, and United have filed for bankruptcy, while US Air and America West have merged in pursuit of financial stability.
According to Erica Silverstein, contributing editor of SmarterTravel.com, members should understand that airlines “want to maximize the amount of paying customers.” Therefore, she explains, “most of the seats reserved for awards are considered distressed inventory or seats that are not going to sell anyway.”
Recent estimates indicate that the buying power of frequent-flier mileage has decreased, in that more miles are required to purchase a domestic ticket. Currently, each mile is worth approximately 1.4 cents, a 33% drop since 1994 when they were valued at 2.1 cents.
Despite the difficulties with redemption, accumulation is easier than ever. Many co-branded credit cards, such as United Airline’s FirstUSA Visa Signature, allow customers to earn miles for every dollar spent.
Randy Petersen, editor of InsideFlyer. com, says, “hotels are getting more expensive” so consumers should figure out how to redeem points toward overnight accommodations.
Here are some additional tips:
Look for miscellaneous redemption fees: Some airlines have surcharges for rewards redeemed close to the actual departure date. With American, expect to pay $50 if you book 7 to 20 days before departure. This is in addition to security fees and taxes, which vary depending on your destination and can be substantially higher for international travel.
Look for special mileage program deals: Some airlines offer reduced travel rewards for special locations. American has a US Short-Hop Award that allows fliers to travel to select destinations within 750 miles of your departure city for 15,000 miles instead of the 25,000 required for a typical domestic ticket. Many carriers also allow consumers to purchase tickets with a mile/cash combo for select travel spots.
Redeem miles on airline auctions: In the past, United offered items such as Chicago Bears playoff tickets on its Website. Before bidding, you can determine how much you are actually spending. Simply calculate the number of miles the item is going for and multiply it by the estimated value of each mile (.014). A home wine-tasting party for 10, going for 52,000 miles, would equate to a $728 purchase.
Give miles as gifts: Some airlines allow miles to be transferred to friends and/or family. Contact your airline directly for more information. It makes a nice birthday or graduation surprise without incurring out-of-pocket expenses.
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