A couple of articles caught my attention this week about the difficulty some travelers have redeeming frequent flier miles.

The first is from the Daily Mail, and setting my opinion of the publication itself aside, I read through the article. About 1,000 British fliers were surveyed and asked about their participation in an airline’s frequent flier program. Among the results:

• Almost half never redeem their miles because the terms and conditions are too restrictive.
• Sixty percent of people think they need to take too many flights before they can claim rewards.
• About 40 percent of people who collect air miles ever redeem them.
• Only 23 percent of those surveyed said they collect airline loyalty points.

These findings shocked me until I stepped back from my far-too-intimate knowledge and personal experience with travel loyalty programs. It is fair to say that the average traveler has difficulty redeeming miles, and I understand their frustrations.

The nuances of an individual program can be mind-boggling and do (mostly) require an in-depth knowledge in order to yield desirable results when it comes time to redeem for a reward. That’s part of the reason why so many bloggers/experts offer award booking services.

But Should the Programs Be Regulated?

The other article I read sort of punctuates the results of that study’s findings, and comes from Christopher Elliott. He writes about a traveler who had a very difficult time trying to redeem her United Airlines MileagePlus miles for a flight (or even hotel or car redemption, which is a story in and of itself – even I didn’t know you had to be an elite or Chase cardholder for a hotel or car award).

Beyond discussing her particular case, he asks the question, “Should frequent flier miles be regulated by the government?” The basis of him posing the question is related to the so-called “promise” for free flights membership in a frequent flier program bestows. And while the perception might be there that airlines “promise” free flights, the reality is that they have no obligation to honor anything. The MileagePlus program rules, for example, state:

MileagePlus membership and benefits, including the Premier Program, are offered at the discretion of United Airlines and its affiliates, and United has the right to terminate the Program and/or the Premier Program or to change the Program Rules, regulations, benefits, conditions of participation or mileage levels, in whole or in part, at any time, with or without notice, even though changes may affect the value of the mileage or certificates already accumulated.

There’s certainly no promise there. Yeah, I know, most people don’t read the T&Cs of just about anything, but calling for regulation of FFPs is just ridiculous in my mind. As of earlier today, though, only 46 percent of his poll agrees with me:

I dare to say the majority of you reading this are pretty savvy when it comes to understanding the programs and how to maximize their value. How would/did you vote that poll?

– Follow Darren Booth on Twitter, @FrequentlyFlyin, for more airline, hotel and travel industry news, reviews and opinions.

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I received the following question from Peter and he (and I) would love additional feedback beyond what I provided. First, his question:

I fly 200K – 250K for business (mostly China) and try to divide it between UA and AA to keep my top tier status with both. I will turn 40 soon and don’t want to spend the rest of my life in the air. That brings me to the question which FF program should I stick to when I cut down my “butt in seat miles” to about 100K-150K/year.

I prefer StarAlliance because I can use miles on more airlines to destinations that I like, but AA is getting better (customer service, meals, planes, …) and I have access to Flagship lounge, I get SWU on any fare and my domestic upgrades clear 80%, UA only about 50%. I fly LAX-PVG a lot and both airlines have great connections.

If you would pick one program, which one would it be?

I think it’s pretty difficult to narrow down a succinct “this airline over the other” answer, as each person is different and might value certain benefits of a frequent flier program and airline more heavily over others.

Here are the main considerations I replied with and asked Peter to ponder:

Lifetime Status: If he is closer to a lifetime status tier with one carrier over another, I recommended focusing his 100-150k per year on that carrier. Given the likelihood that all U.S. airlines will add a revenue requirement to attain elite status each year (a la Delta), I think it’s an important consideration to lock-in some status now, even if it’s not top-tier.

American-US Airways Merger: As we’ve seen with the Delta-Northwest and United-Continental mergers, frequent flier programs change. American is indeed very generous currently with SWU applicability on all international coach fares and has a pretty good record – based on trip reports – of excellent service (which has been my experience compared with United). Will a Doug Parker-run American destroy some of American’s allure and generous frequent flier program perks?

Alliance Strength: Peter admits Star Alliance is his preferred global alliance and I have to unapologetically agree. Star has the greatest number of truly premium carriers and I certainly value my United miles greater than my American miles for worldwide redemption opportunities.

Service Matters: American’s AAdmirals Club, particularly at LAX where Peter seems to be based, is far stellar to the United Club. Here’s a look at the Flagship Lounge, for example. And in my experience, more of American’s flight attendants seem to have a truly genuine desire to provide exceptional customer service than United’s.

I think it’s almost a “wait and see” game with how American evolves in the merger with US Airways. But if I were Peter, I’d definitely focus that 100-150k on a single carrier for top-tier status. Would it make sense to split it? What are your thoughts?

Related posts:

What the New American AAdvantage Program Might Look Like

Why an American-US Airways Merger Worries Me

How the American Express Platinum Card Can Pay For Itself

American Flagship Check-In and Lounge at LAX

With a merger announcement between American Airlines and US Airways imminent (tomorrow morning by all accounts), we’ll finally put some speculation to rest, but open the door on months of new supposition. [Edited 2/14/13: And it's official]

Of particular interest to me (and many of you, I’m sure) will be the changes to American’s AAdvantage frequent flier program. After all, earning miles and gaining status are at the core of my addiction to airlines. So here then are some guesses as to elite tiers, revenue requirements and upgrades in the eventual new program.

Elite Tiers

I, as many others do, believe American will adopt a four-tier mileage-based elite system being named Silver, Gold, Platinum and Executive Platinum. This would mean a downgrade in name for 25,000-mile fliers, but it wouldn’t necessarily translate into reduced benefits from what they have today.

Adding in a 75,000-mile level as the new Platinum would likely shed some benefits away from current 50,000-mile fliers, also downgraded in name to Gold. I think they’d still be oneworld Sapphire, but their bonus award mile amount would probably drop from the current 100 percent.

And as for the new Platinum 75,000-mile level, I imagine American would provide marginally better benefits than Gold, such as better upgrade priority and bonus award miles. It’ll be interesting to see if they follow the US Airways model of 25/50/75/100-percent bonus award miles by status, similar to United.

Evolving to a four-tier elite program will also help even out the ranks when combining the two programs. And I’m certain American’s unadvertised Concierge Key program will remain.

Revenue Requirement

If you subscribe to InsideFlyer, Randy’s opening remarks in the February issue point to an opportunity for the merged carrier to pull off adding a revenue requirement for elite status at the same time as officially operating as one airline.

And I tend to agree. It’ll certainly take time to reveal the eventual new AAdvantage program, but when it debuts (probably in 2014), I wouldn’t be surprised at a Delta-esque spend requirement for each elite level – particularly with Doug Parker at the helm.

And I think United will announce something similar beginning in the 2014 year, effective with 2015 status.

Upgrades

One of the great things about Executive Platinum status right now is the “protection” of being the only level with unlimited complimentary upgrades. Other levels currently have to use 500-mile e-stickers for the privilege to upgrade.

But just as US Airways offers unlimited domestic upgrades, American will likely evolve AAdvantage to do the same and become competitive with United and Delta. Not necessarily good news for the Executive Platinums out there, I know, but I truly believe it’ll happen.

As far as American’s generous e-VIP (Systemwide) upgrade policy allowing all purchased coach fares to upgrade into business internationally, I think that will change, too. It wouldn’t surprise me if a minimum fare class requirement were instituted with the new AAdvantage program.

It will certainly be interesting to watch everything unfold in the next several months to a year, beginning tomorrow.

Related posts:

Why an American-US Airways Merger Worries Me

Delta’s New Medallion Qualifying Dollars Revenue Requirement

• I blogged about it separately, but American Airlines  unveiled a new identity today, ahead of any announcement regarding a merger with US Airways. The intro video is #avgeek spectacular, in my opinion.
• Delta Air Lines officially announced a new Medallion Qualifying Miles requirement starting in the 2014 program year. I shared my thoughts on it in a post yesterday. Which U.S. airline will be next to introduce a spend threshold for elite status? My guess: United, and within the next three months.
• Alaska Airlines officially announced Emirates as a Mileage Plan redemption option. Earning miles when flying Emirates has been offered to Alaska’s members since March 2012.
• United Airlines sent emails to MileagePlus members offering buy-up Premier Qualifying Miles to achieve a higher elite status. Many Flyertalkers reported their targeted offers in the linked Flyertalk thread.
• Leave it to Spirit Airlines to launch a fare sale surrounding the confusing Manti Te’o scandal/controversy/hoax/whatever you want to call it. Always good for media exposure. Per the Spirit sale/website, “So, if your girlfriend is around (and real), plan that trip that you’ve been talking about without paying too much for it. And tell those high fares to RIP!”
• Starwood Hotels has signed on to be the exclusive hotel partner for the Chicago Cubs, Wrigley Field and other related businesses/charities. SPG members will have a chance for exclusive access to events and other experiences as part of the SPG Moments program.

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Notable Airline, Hotel and Travel News: January 16, 2013

Notable Airline, Hotel and Travel News: January 15, 2013

Notable Airline, Hotel and Travel News: January 14, 2013

Delta Air Lines published upcoming changes to the SkyMiles program earlier today. Whether it was deliberate or an error, the page has since been taken down from Delta’s website. But not before an astute Flyertalker captured the details, as shown below.

[Updated 1/17: Delta has indeed announced the MQD portion below this morning]

Earning Medallion Qualification Miles (MQMs)

Beginning March 1, 2013, the MQMs SkyMiles members earn on select fare classes will change.

For Delta-marketed flights, the MQM bonus for First/Business F and J fare classes will double from 50% to 100%. Economy M fare class will no longer earn a 50% MQM bonus. This change will apply to tickets purchased on or after March 1, 2013.

The above changes also will apply to F-, J- and M-equivalent fare-class tickets on Aeromexico, Air France-KLM, Alaska, Alitalia and Virgin Australia-marketed flights. This change will apply to travel flown on or after March 1, 2013.

The MQMs you earn on certain other partner-marketed flights will adjust for travel flown on or after March 1, 2013.

Please note that the way you currently earn redeemable miles is not changing.

Medallion Qualification Dollars (MQDs) – Coming Next Year

Beginning January 1, 2014, SkyMiles members residing in the United States (excluding Guam, Puerto Rico and the U.S. Virgin Islands) will qualify for Medallion status based on an additional threshold – the member’s annual spending with Delta, which will be measured by Medallion Qualification Dollars (MQDs).

Members must also meet the existing Medallion Qualification Miles (MQMs) or Medallion Qualification Segments (MQSs) qualification criteria.

The threshold ranges from $2,500-$12,500 MQDs depending on Medallion level.

Alternatively, Delta SkyMiles Credit Cardmembers can be waived from the new Medallion Qualification Dollars (MQDs) requirement if they make at least $25,000 in Eligible Purchases within the calendar year.

First on the MQM side, it actually makes sense to me to reward full-fare first and business class fliers with large bonuses, particularly on the elite qualification side of the equation. Giving F- and J-class ticket purchasers a 100 percent MQM bonus would lead the big three U.S. airlines. United’s PQM bonus is currently 50 percent and American doesn’t give a bump in elite qualifying miles, but does provide 1.5 elite qualifying points per mile under their system.

Removing the third-most expensive coach M-class fare MQM bonus of 50 percent isn’t particularly bothersome as the airline’s main focus is predominantly on full Y-B fares in economy. I say this, of course, as someone who rarely (if ever) buys a ticket that expensive.

What’s most interesting to me is that Delta isn’t reducing either MQMs or redeemable miles earned on the lowest fare classes, if these are indeed the only planned changes for the remainder of 2013 and the 2014 program year. I would have assumed U.S. airlines would lower the earn rates there at the same time as adding an annual revenue requirement. This would bleed-out elite ranks faster for the lower-spend “over-entitled” fliers like myself.

And regarding the revenue requirement, is it time to “move” to Canada (or Guam, Puerto Rico, the U.S. Virgin Islands or anywhere else globally) for some Delta elites as the new MQD concept applies to only 50-stater U.S. residents? The spend threshold for each tier ranges from $2,500 to $12,500, probably something like this (my total guess) [Updated 1/17: And I was wrong on the Plat tier amount, it's confirmed at $7,500]:

• Silver Medallion: $2,500
• Gold Medallion: $5,000
• Platinum Medallion: $9,000 $7,500
• Diamond Medallion: $12,500

United’s rumored, yet unrealized changes for the 2012 program year also had a spend requirement I blogged about in 2011. The proposed levels were:

United Airlines Rumored Spend Requirements From 2011

Yeah, I know it’s still Premier 1K, but “Diamond” was speculated at the time as the top level.

And now might be the time to get a Delta credit card if you don’t already have one. The MQD requirement will allegedly be waived if you spend at least $25,000 in eligible purchases each year.

It remains to be seen what the actual changes will be, but I’m certain they’ll be announced this year, as I blogged about yesterday. Here’s the link to the ever-growing Flyertalk thread discussing the possible changes.

Delta fliers: Is this a big deal to you?

Related posts:

The First Airline in 2013 to Change to a Revenue-Based Frequent-Flier Program Is…

My Thoughts on the Rumored United MileagePlus Changes

Looking Back at 2013 and What’s Ahead in 2013

Well, it’s happened. The first frequent flier program to officially change to a revenue-based accrual model in 2013 is… Sun Country’s Ufly. Yeah, not earth-shattering at all for most readers.

And in doing a little background on the program, it appears the previous incarnation of Ufly was more akin to the former Southwest system where a flight – no matter the distance – earned a set number of points. Five points were awarded for coach travel and seven points for first class. Once you racked up 100 points, you were eligible for a free ticket.

Now, Ufly members will earn 10 points per dollar on the base airfare. Redemptions start at 6,500 points and Sun Country revenue manages those redemptions based on peak/off-peak flight demand, distance and other factors as shown in their example chart below.

Sun Country Ufly Redemption Calendar Example

So if I wanted a weeklong trip from Minneapolis to Orlando leaving on a Saturday, it would cost me 40,000 points roundtrip, the equivalent of spending at least $4,000 on base fares to accrue that amount of points. Perhaps that is indeed a fair price, but it’s shocking to me as a mileage-based junkie who earns similar free tickets at much lower spend. But again, that’s just me… a flier who needs to wake up and smell the eventual new reality.

Which Legacy U.S. Airline Will Be the First to Throw Down?

Many airlines, especially non-U.S. carriers, have had revenue-based programs for years. And it’s increasingly likely our beloved mileage-based programs here in the U.S. are slowly on the way out.

Southwest now has a revenue-based model, Virgin America launched Elevate from the get-go as such and rumors (I really should say all-but-certain-truths) abound that the legacy airlines will follow suit. Delta is frequently named as the large airline most likely to come to bat first with the change.

And call me crazy, but I read into the introduction in my United Airlines Premier 1K credentials kit that arrived last week (bolding mine):

Darren,

Congratulations on achieving MileagePlus Premier 1K status. We truly value your travel spending and flight activity with United, and we look forward to providing you with exceptional privileges to make your experiences with us more rewarding.

A quick glance at previous years’ kits didn’t have the “travel spending” language. They were more flowery with words or phrases like “loyalty” and “your business.”

I think Delta will definitely be first to announce a change, followed by United. Depending on what happens with a possible American-US Airways merger, I think they’re both just too busy to work it out this year.

Which major airline do you think will be first?

Related posts:

US Frequent Flyer Programs Focusing More on Revenue

Stick With United as a 1K or Switch to Virgin America as Elevate Gold?

Looking Back at 2012 and What’s In Store for 2013

Frequent Traveler University kicks off tomorrow evening and the schedule of events over the course of the weekend looks fantastic. I’ll be there all three days and hope to meet some new friends and catch up with “old” ones. Are you attending?

Here’s the schedule of events, all taking place at the Sheraton Gateway LAX (the event is currently sold-out):

Related posts:

Chicago Seminars: Day Three Summary

Chicago Seminars: Day Two Summary

The Chicago Seminars Have Arrived!

In the news this week is a story about Lynn Harrell, a world-renowned cellist, whose Delta Air Lines SkyMiles account was terminated for a violation of program rules.

For years, Harrell traveled the world and always bought a second seat for his cello under the name of HARRELL/CELLO. The cello even had a SkyMiles account, created by Harrell’s travel agent 15 years ago. And both Harrell and his cello earned and burned miles on Delta until January this year, at which time he received a termination notice.

Harrell posted the letter he received from SkyMiles on his blog, which states:

During a recent review, it has come to our attention that you have continued to earn miles for your cello even after you were advised in 2001 that this was not permitted. Per the terms and conditions of the SkyMiles program, mileage credit is not awarded for tickets purchased for musical instruments. Therefore, SkyMiles account 4XXXXXXXXX has been closed.

On his blog, Harrell says his travel agent never received the original warning in 2001. But he told NBCNews.com that he either just forgot about it or never saw it when his secretary handled the correspondence. Besides that discrepancy, what is simply amazing is that it took Delta until January this year to catch the ongoing violation.

Each airline’s frequent flier program has its own T&Cs, but all do have the right to terminate a member’s account. And while no one really does, members are supposed to read and understand those rules. Here’s Delta’s language:

Delta reserves the right to terminate your membership in the SkyMiles program at any time if you violate the SkyMiles program rules, any term or condition of Delta’s contract of carriage, Delta’s fare rules, or any other Delta rules and regulations that apply to your travel. Termination of your membership will result in a loss of all accumulated mileage credit in your account, the cancellation of any unused Awards, and the loss of all other SkyMiles benefits. Terminated members are not eligible to participate in any aspect of the SkyMiles program, including without limitation any special promotions or SkyMiles partner offers. In lieu of termination, Delta may at its sole discretion deduct mileage from your account but permit you to continue participating in the SkyMiles program.

I agree with Harrell that Delta could have processed this audit in a more timely fashion, but will side with Delta on the termination for the simple fact that they have the right to do so.

Was it the nice thing to do? No. They could have taken the less-harsh approach in their policy and simply terminated the cello account and deducted any mileage used from that account from Harrell. But they went the fully punitive route and terminated both accounts, barring Harrell from participating in SkyMiles in the future.

Harrell’s blog post is thoughtful and worth a read, though he incorrectly states that airlines sell “customer’s miles.” They don’t take miles from people and sell them, as he claims in the comments referencing this article. They simply sell blocks of “new” miles to credit card companies and other partners who then give them to members for completing some type of transaction.

If I were the auditor, I probably would have bestowed the less harsh punishment given the volume of business Harrell (and his cello) seemingly gave Delta over the years. With the media exposure Harrell has received, I’ll be curious to read if Delta reopens his case.

What’s your opinion?

Boy, American is really in the giving spirit lately. If the free Admirals Club passes weren’t already enough of a welcome surprise last week, this morning they emailed me yet another gift.

It’s a targeted offer with a dedicated link, so sadly I can’t post it to share with the masses, but I’m certain I’m not the only one to receive it. The fine print of the email reads, “This email was sent to darren@frequentlyflying.com because you have recently attained AAdvantage Executive Platinum status.”

If you think about it, they’re really being smart marketers. Offering useful perks above and beyond what you already receive as a top-tier elite – especially being a new Executive Platinum – really helps build loyalty and drive future purchase decisions. And the timing of them arriving after receiving the EP credentials in the mail allows them to bring American top-of-mind again at this later date.

Thanks, American, for another fantastic gift!

If you haven’t already started receiving email solicitations from airline and hotel loyalty programs regarding the Freddie Awards, here’s a link to the home page explaining the prestigious awards and another link taking you directly to the voting portal. Additional information appears below.

The awards ceremony will take place April 26, 2012 at the Renaissance Newark Airport Hotel.

Cast your vote now!

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