Airline Rewards Game Getting Tougher to Win

[reader]

From Bloomberg News

Airline rewards programs were once fairly straightforward. Carriers doled out perks like lounge access, cabin upgrades and even free flights to tighten bonds with customers who collected points from their journeys. Frequent flyers enjoyed the elevated status that came with sticking to one airline, while savvy users could scour awards charts to find deals that made bucket-list trips to Europe or Hawaii more affordable.

These days, it’s not so simple. Programs designed to encourage loyalty have gradually morphed into complex financial ecosystems – especially in the US, where airlines collect billions of dollars in revenue per year from them. Major carriers like Delta Air Lines, American Airlines and United Airlines now control what amounts to their own virtual currencies, selling points to credit-card issuers at lucrative built-in margins. Some loyalty programs are even worth more than the market value of the airlines themselves.

Two big changes to frequent flyer programs of the past have underpinned this transformation.

First, airlines overhauled how points are awarded. Customers today earn rewards based on dollars spent rather than how far they fly. Some three-quarters of airline points issued by major US carriers now come from credit-card spending, meaning that every swipe at the grocery store can theoretically get you closer to a free trip. At the same time, actually getting on a plane often earns less than before. While the change has widened the consumer base, it’s frustrated many people who remember the old system.

Next, airlines altered how points are redeemed. One by one, major carriers abandoned the awards charts that had helped loyalty members know how many points they needed to put that dream vacation within reach. Instead, airlines moved to a “dynamic” pricing model that varies the value of points flight-to-flight and even day-to-day, based on real-time demand and availability.

Such changes have raised alarm bells among lawmakers and regulators. “More and more, the complexity and even instability of the program is something that’s disadvantaging the passenger,” Transportation Secretary Pete Buttigieg said in an interview with Bloomberg News.

In September, his agency launched a probe into the rewards programs of the four largest US air carriers — Delta, American, United and Southwest Airlines — seeking to find out more about how earned points may have been devalued over time and how dynamic pricing can make it harder for customers to predict how far their points will go.

Continues at

https://www.bloomberg.com/graphics/2024-airline-miles-points/

[vinapu]

precisely because of those changes I stopped sweating this stuff. Still collect miles but treat them as by-product of my travels. If I get something for that , good, if I don't, no harm done  

[floridarob]

The airline execs are happy with Trumps "pro Business" stance....ie fuck the customer hurray for the bottom line and bonuses.

It's not expected that the investigation will continue going forward....

[TMax]

I've been a member of 2 airline rewards, Singapore Airlines and Thai Airways, my only problem ever with Singapore Airlines is they deleted my account for some reason and all the miles earned were gone for good (they did admit they made a mistake and offered a new account but wouldn't put the miles back so screw that). I haven't bothered with the Thai frequent flyer since the covid crap started but I may try to get it going again some day as my travel has recommenced, may look at it for the planned trip late next year.

[10tazione]

8 hours ago, vinapu said:

precisely because of those changes I stopped sweating this stuff. Still collect miles but treat them as by-product of my travels. If I get something for that , good, if I don't, no harm done  

+1