Opinion: Why frequent-flier miles are no longer worth bothering with

I was recently notified by one of the frequent-flier programs I joined years ago that I had some miles set to expire. So I figured it was finally time to book that European trip I have been considering.

It turned out, the miles in my account wouldn’t get me all that much, especially if I wanted to travel at a day and time that any sane person would want to travel. Even then, I was looking at well more than $100 in fees to make use of my “free” flight.

At which point I asked myself: “Why am I bothering to play this game anymore?”

And I may not be the only one thinking this.

Americans have long loved frequent flier and other loyalty programs — research has found that 89% of consumers are enrolled in at least one of them. This eagerness to earn mile after mile was best captured in the 2009 George Clooney film “Up in the Air,” in which Clooney’s character aims to become a 10-million-mile flier with his preferred airline.

But these days, frequent fliers are frequently frustrated by the airline programs. Consider the outrage that followed when Delta Air Lines announced changes to its SkyMiles program, adjusting it so that consumers could earn elite status, with all its attendant perks, only through their spending (as opposed to their accumulated miles or segments flown).

I won’t pretend to understand all the particulars of the new rules, but NerdWallet summed up the net effect thusly, echoing the frustrations of many Delta loyalists: “Basically, Delta determined that the problem with its elite status program was that it wasn’t elite enough. So it kicked all the medium rollers out of its club.”

CEO Ed Bastian has now said the airline will re-examine the situation and make some “modifications.”

“Our team wanted to kind of rip the Band-Aid off and didn’t want to keep having to go through this every year with changes and nickel and diming,’’ Bastian said in Atlanta earlier this week. “I think we moved too fast.”

A Delta spokesperson contacted by MarketWatch had no additional comment.

While the news may hint that SkyMiles members voices’ have been heard, Bastian’s remarks still speak volumes. Because they acknowledge what has happened in the four decades since frequent-flier programs were launched by all the major airlines.

Namely, with each passing year the programs seem to change, a point perfectly illustrated in a 2021 overview from The Points Guy, a leading site that’s all about mastering the frequent-flier game.

It chronicles each of the waves of shifts and modifications to the programs. Some have been positive, such as when the airlines began allowing you to earn miles through car-rental companies, restaurants and other partners. But many more have been negative, such as when some airlines started implementing expiration dates for your miles.

‘The programs are hopelessly confusing, byzantine and almost impossible to use for the average traveler.’

— Travel journalist Christopher Elliott on the state of frequent-flier programs

Even when considering the positives, the consumer has generally been on the losing side — in terms of not just how their miles have been devalued, but also how the programs have become so overladen with rules and restrictions.

Or as veteran travel journalist Christopher Elliott told me: “The programs are hopelessly confusing, byzantine and almost impossible to use for the average traveler.”

Indeed, it’s very telling that Elliott, who’s on the road almost 365 days a year, doesn’t bother with the programs anymore. And he believes others are starting to feel the same way.

“We’re definitely at an inflection point,” he said.

Then again, we still have nearly 90% of consumers who are loyal to the concept of loyalty programs — or, at least, participating in them. But more important, we have airlines making real money off them, so they’ll keep on promoting them heavily to us.

They’re earning that revenue in ways you may not realize. It’s not just about winning your loyalty so you’ll continue paying for flights in an effort to accumulate miles. Rather, as The Points Guy senior aviation business reporter David Slotnick explained to me, the airlines make a hefty amount of money — billions of dollars, in fact — selling their miles to credit-card companies.

Yes, every time you sign up for a card that earns you miles or points through an airline, it’s the card issuer that’s paying for them. Slotnick said the going rate is around a penny a mile or point. It’s something card issuers are willing to do because they hope to make back their money — and then some — in other ways. (Think interchange fees or interest on your debt.)

Of course, if travelers book flights with all those credit-card miles, it costs airlines to run the planes. But here’s the other secret of the frequent-flier trade: Lots of miles go unused — no doubt because the programs have become so, well, difficult to use. McKinsey, the management-consulting company, once estimated that 30 trillion frequent-flier miles are left “unspent.”

Which brings me back to the miles I’m letting go unused because that European trip isn’t going to happen — or at least not without foregoing any of my frequent-flier programs and just paying for a flight.

I’m old enough to remember when these programs made real sense and the math was easy to sort out in terms of how much you needed to fly to get a ticket that was truly free. Heck, I’m old enough to remember when my parents, now long gone, could tally up those miles, too, despite the fact they never could figure out how to use a computer.

All of this kept us loyal to certain airlines — a win-win for the consumer and the carrier alike. After all, isn’t that the idea behind a loyalty program?

Now, that point is increasingly getting lost — just like the points (and miles) themselves.

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