Sat 31 May 2008
Hyper-inflation Is Here; Check Your Airline Miles
Posted by RichSlick under Observations
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A friend updated me on some news regarding airlines miles. Evidently there has been a recent devaluation of 20% to 200% of airline miles. I don’t travel too frequently with miles so I don’t keep up to date on all the programs and plans and I also ditched using credit card airline reward miles about a decade ago because of the inflationary worthlessness of the miles and other issues related to them but here’s the scoop.
Airlines used to offer domestic ticket from city to city for about 25,000 miles but the new requirement seems to be 50,000 miles for point to point travel. How’s that for 200% deflationary value! International flights seems to have gone from 250,000 miles to 300,000 miles for a single ticket which translates to 20% devaluation.
I suspect that it won’t stop here and in 2009 we’ll see a new round of air mile inflation, that is of course if there is any airline left before they all merge into one giant airline much like AT&T bought up all the baby bells.
My advice is to dump your credit card airline mileage card and switch to cash rewards. Oh yeah, spend all those frequent flier miles before they become truly worthless!
Here’s a link to some of the changes on Continental as an example.
3 Responses to “ Hyper-inflation Is Here; Check Your Airline Miles ”
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July 1st, 2008 at 7:02 am[…] miles so they’re becoming worth much less every day. Additionally, airlines continue to increase redemption reward miles and with oil projected to hit $150/barrel you might as well get something out of your air […]
May 31st, 2008 at 11:05 pm
I know that the truth doesn’t always gel quite so well with your inflammatory headlines, but here are a few clarifications:
1) There are still 25k awards out there. Unfortunately, there is a perfect storm going on in the airline industry right now. There are full flights with lots of paid customers - making award seats harder to come by. Why? Because…
2) There are a ton of airline miles chasing these few seats. Airlines are “printing” miles faster than ol’ Ben is printing money (and, boys, that’s pretty fast!).
When the 25k award was the norm, miles were mostly accrued by - get this - flying! Nowadays, credit card spending, partner tie-ins with rental car companies, dry cleaners, grocery stores, home loan refinancing, brokerage accounts and even power companies all help boost mileage accounts.
With the ease of earning all of these miles, and the short supply of seats, it was inevitable that award prices would go up. However, there is still value out there to be had - especially if you don’t have to go to Hawaii, Orlando, or Paris for vacation.
I just booked a 45K first-class award ticket (the cheaper variety) on American to fly MCO-MCI//DEN-BNA-MCO - again, all first-class, all on one 45k mile ticket. American does over very lenient rules on open jaws and stopovers, which made this possible - and there are a lot of people who say that you should never use miles for a domestic award - but, for me, for my vacation, I got a good value for the money laid out.
June 1st, 2008 at 7:32 am
Thanks for the heads-up. Although I have not seen that big of a jump elsewhere.
My first thought is any small-scale point inflation could “wash” against increases in ticket prices. But if airlines raise prices via misc fees, it could be a double-whammy.