It's harder than ever to redeem frequent-flier miles. Here are 10 ways you can work the system.
Managing frequent-flyier miles is a little like working on your bridge game: With a little bit of effort, sure, you can learn the basics. But becoming a true expert demands a Jedi master's level of determination, patience and skill.
Lately, airlines have made the task of redeeming miles trickier than ever. Why? More people are racking up miles from a variety of sources — yet fewer planes are in the air. "That's kind of causing a squeeze when it comes time to redeem miles. There are simply fewer available awards seats to go around," says Tim Winship, publisher of FrequentFlier.com. In 2003, air traffic was down more than 18% from 2000 (based on departures), according to the Air Transport Association.
Frequent-flier programs now have a whopping 120 million members world-wide accumulating 500 billion frequent-flier miles per year (net of redemptions), according to InsideFlyer, a publication dedicated to frequent travelers. In 2001, American Airlines' AAdvantage program received 11,000 new members each day.
Fortunately, there are ways to gain a significant edge in the mileage game. Here are 10 tips.
1. To Get Miles, You Don't Really Need to Fly
These days, a whopping 57% of all frequent-flier miles are earned not in the air but on the ground, says Randy Petersen, InsideFlyer Magazine's editor. Retailers, hotels, car-rental companies, restaurants, financial-services companies, long-distance providers -- you can earn miles just about anywhere, and usually without spending any additional money. For example, you can earn five Continental OnePass miles for every dollar spent at 1-800-CONTACTS at no additional cost, and 30,000 Northwest WorldPerks miles for depositing $50,000 at online broker E*Trade.
One exception to this rule, however, is airline credit cards. These convert purchases into miles, but come with annual fees that range from $50 to $100. If it takes you a few years to earn a free ticket, well, it wasn't really all that free, was it?
2. Heed the $300 Rule
These days, airfares are cheap. Dirt cheap.
When you finally reach the 25,000 pinnacle -- the minimum amount required by the major airlines for a free round-trip domestic ticket -- don't waste it on something you could comfortably pay for out of pocket. "Save your miles for more aspirational types of awards," says Petersen. "My rule of thumb is around $300." In other words, if the ticket would cost less than $300, you're probably better off buying it outright than using your miles.
A mile is typically considered to be worth about two cents. So if you're cashing in 25,000 miles, that means your free voucher is worth about $500 bucks. Don't blow it on a ticket that's worth significantly less than that.
3. Book Early or Book Late
Anyone who's tried to book a free ticket lately knows it isn't easy. Airlines allocate a small number of seats to frequent-flier awards. So locking in a free seat to a popular destination requires enormous patience -- or a hearty dose of luck. "You might not be able to go to Paris on a Friday night," says Jon Douglas, senior editor at SmarterLiving.com. "But you can go to Des Moines on a Tuesday."
Assuming you have your heart set on something a little more exotic than Iowa, you can lock in the choicest fares by booking your travel 330 days out, says Winship. That's when these seats typically first come available. Alternatively, you could try your luck at booking quite late, say a day or two before you travel. Understandably, the goal of the airlines is to not give away a seat that might otherwise be sold for money. "But if the flight isn't selling out, then the airlines oftentimes will put award inventory back into the system," says Winship.
Obviously, these strategies aren't going to work for everyone. For those who want to book free seats, say, one to two months out, the key is to be flexible: on your dates, your flight times and your destination. "Think about what everyone else is doing and then do the opposite," advises Winship.
4. Think Twice Before Upping the Ante
Just when you think you'll never be able to use that 25,000-mile voucher, chances are you'll be offered a significantly less attractive -- although perhaps highly tempting -- alternative. If you're willing to use 40,000 or 50,000 miles for an "unrestricted" frequent-flier ticket, suddenly you've got seats galore to choose from.
Unrestricted awards have no blackout dates or capacity requirements. So if there's a seat open on the plane, it's yours. But is this a smart thing to do? It comes down to how badly you want that seat. Unfortunately, if you aren't all that flexible, it could be your only choice. "It's harder and harder to get an award ticket at the 25,000 level," says SmarterLiving.com's Douglas. For example, over this past holiday season it was all but impossible to get a frequent-flier seat at the restricted level during the peak travel dates -- but there was no problem getting unrestricted seats, says Douglas.
FrequentFlier.com's Winship agrees. "I'm hearing increasingly from members of these programs that they were coerced into redeeming more of their miles because, by God, that was the only way they were going to get the flight that met reasonably well their requirements," he says.
Here's a tip. Before you even think about upping the ante like this, ask if any restricted business-class or first-class seats are available, says Douglas. Often those seats require the same number of miles or even fewer. On American Airlines, for example, an unrestricted coach ticket requires 50,000 miles, while a restricted first/business ticket goes for 45,000 miles. If you're going to use all those miles, you might as well try to fly in style.
5. Pay Close Attention to Partnerships
You can't underestimate the importance of airline partnerships when it comes to earning and redeeming miles. Currently there are two major alliances among the major U.S. airlines: United and US Airways; and Continental, Delta and Northwest. (Each alliance also works with several international airlines as well as regional U.S. airlines.)
Through these alliances, you can fly one airline but have the miles accrue to the program of another. Likewise, if you've got an award on one airline, you can use it for travel on one of its partners. Obviously, the easiest way to rack up the miles is to continue to add to just one airline's program -- so this allows you to do that, while still flying different airlines. Tapping into another airline's flight schedules also opens up destinations -- and the awards seats needed to get there.
One catch: You can't combine the miles of one airline with another to get an award. (In other words, you can't take 5,000 Delta miles and add them to 20,000 Continental miles to get yourself a free ticket on either airline.) So make sure you specify which frequent-flier program you'd like to use before you fly, says Petersen.
6. You Can't Beat Elite
Chances are you know someone -- everyone does -- who's got frequent-flier miles coming out the wazoo. The secret? Elite status, baby.
Elite status -- which is granted to customers who fly a lot on a particular airline -- is more than just marketing lingo. Not only does it make flying a significantly more pleasant experience (among other things, you get early boarding, and an exclusive check-in line) -- it also makes it easier to get frequent-flier miles. Elite-status members typically get a 25% to 100% mileage bonus (just how much depends on which tier of elite status they fall into) each time they fly.
Alas, unless you travel for work, it's awfully hard to achieve elite status. Indeed, only 4% of frequent fliers achieve this level, says Petersen. To qualify, you need to rack up a certain number of points over a specific time period, such as 25,000 points in a one-year period. And in some cases, earning these points can be tougher than earning standard frequent-flier miles. That's because if you fly on a discounted ticket -- as identified by the fare class -- you may earn fewer points toward elite status than if you pay full fare.
That said, elite is so sweet that some customers are willing to make "mileage runs" (travel with the primary purpose of gaining miles) to achieve or maintain it. (To see what we mean, check out the message board of FlyerTalk.com, where frequent-flier junkies trade tips.) The airlines themselves also offer "challenges," or promotions where a flurry of flying over a short period of time could earn you elite status, says Douglas.
7. Don't Consolidate Miles
Some folks, frustrated over not being able to accrue enough miles for free seats, look for a quick fix by consolidating miles. Bad idea.
As mentioned in point five, you can't consolidate by rolling miles over from one airline's program to another. You can, however, do it through a third party, like Points.com -- albeit at a very steep price. "The conversion loss is so horrific, it's almost insulting," says Winship. For example, exchanging 20,000 American AAdvantage miles into America West miles will yield just 2,093 miles.
So what to do with orphan miles? "Learn to live with those," says Petersen, pointing out that there are less expensive ways to get some extra miles. (For ideas, just check out the airlines' partnership programs or sign up for one of Petersen's Mileage Makeovers.)
8. The Easy Way to Track Miles
Members of several different frequent-flier programs have miles spread out all over the place. Fortunately, there are Web sites and software programs that allow fliers to track all of them at once. One we like is available at MileTracker.com, which offers free and simple software that tracks all the major airline and hotel programs. Those looking for a few more bells and whistles (such as tracking for elite status and monitoring of expiration dates) can check out MaxMiles Mileage Miner, which charges $29.95 annually.
9. Watch Out For Expiration Dates
These days, frequent-flier miles typically expire after three years of inactivity. The good news is that airlines define activity broadly, says Douglas. For example, miles accrued from credit-card activity or a hotel stay should keep your account active and your miles safe. Make sure you don't let any miles expire needlessly.
10. Donate Miles You Won't Use
If you have miles you know you won't use (say you've got only a small amount, and they're on an airline you never fly or the miles are about to expire and you can't be bothered with trying to save them), you should consider donating them to a charity. Unfortunately, you won't get any sort of tax break for your donation, but at the very least, you will generate some good karma.
You can find information at any of the airlines' Web sites or at MileDonor.com, a Web site run by Petersen. One popular charity is HeroMiles.org, where miles are given to soldiers returning from Iraq and Afghanistan on emergency leave -- such as for the death of a family member or the birth of a child. While the Pentagon will pay for these soldiers to fly into three U.S. airports, it will not pay for a secondary flight home. Already more than 516 million miles have been donated.