The Economics of Airline Miles – Part V

The Economics of Airline Miles: Part V – Is it all really worth it?

The ‘Economics of Airline Miles’ started off as a single article I was writing on the topic of the ‘Value of Airline Miles’ to us, the travelers. It grew and evolved and took on a life of its own. It is now a five part series, with this being its fifth and concluding installment. I would like to thank all my readers for the interest and the feedback that helped set the direction of this series and encouraged me to keep writing.

The series so far has had articles on:

Part I: The Value of Airline Miles

Part II: The Value of Elite Status

Part III: How to Maximize Airline Mile Earnings

Part IV: How to Maximize Airline Mile Redemptions

In this article I shall discuss what I hear as the number one reason people give for not focusing on the airline miles they earn when they fly: Is it all really worth it?

I have heard several variations of this questions or sentiment:

  • I never fly the same airline

  • It takes too long to accumulate enough miles

  • Airline Miles is just a scam by the airlines to make you fly them even when there are cheaper options

  • My miles keep expiring

I will address this and a few others. But before I go there let me ask two questions that will set the tone and also allow you to share my thought process on Airline Miles with you.

Accumulating airline miles.JPG

Whose money is it anyway?

If you, like me do most of your flying for business, earning miles should be a no-brainer. Especially if you have a fairly fixed travel pattern – you fly the same routes on the same airlines over and over again. Earn the miles – on those airlines as you go. Yes, we are all good corporate citizens and are always making sure we are finding good flight deals for our companies, but is it really worth your time to scour websites to find the cheapest flight every time? Most corporations discourage buying tickets off sited like Expedia and Kayak anyway. Pick one or two airlines and stick to them. If you have a corporate travel agency that does your travel bookings, find out what airlines they prefer – they always have agreements or understandings with a couple. Stick to those airlines and their partners and maximize your miles.

Remember, it is not your money you are flying with, but it is your rear end on a tiny, not-so-comfortable aircraft seat. It is you flying at 300 miles plus an hour in a thin Aluminum tube for your company. Earn the miles!

What is there to lose after all?

No matter who pays for the flights, my commonest comeback to people who question the value of accumulating airline miles is simply:

What do you have to lose after all?

So what if you fly different airlines when you do fly? Understand Alliances and Partners and maximize where you can. What is the worst that can happen? The miles will expire before you get to use them? So what? What did you lose? Just the effort of providing your Frequent Flyer number whenever you flew? Also, given all the mergers and acquisitions we have been having in the airline industry, who knows, your accounts may not look for fragmented in a few years. Think Delta-NorthWest.

My advice, whenever you fly, make sure you look at the Frequent Flyer program airline you are flying. Is it a part of an Alliance? Who are its airline partners? Do you have miles on any one of these programs? Use that program or register with the airline and get a new Frequent Flyer Account started.

Keep Track of it all

My second tip would be to track all your miles. There is nothing worse that not knowing you had miles on a particular airline or its partner when you fly. There are several websites that will do this for free. Some sites even extract information from the airlines directly so you do not have to do any data entry. I have used points.com in the past. If you are a hard core Airline Miles hoarder like me, I suggest using a custom spreadsheet. I use an Excel spreadsheet that I have evolved over the years. It started from a spreadsheet someone posted on FlyerTalk.

On the question of miles expiring, I am in the process of writing an article on Keeping Airlines Miles from Expiring. Subscribe to us via RSS or Email or follow us on Twitter or Facebook to get notified of future articles.

In conclusion, let me address the question – are airline miles a scam by the airlines? Airlines miles are a technique used by airlines to reward loyalty. Is that a scam? Is any loyalty rewards program a scam? I think not, but you have to stay within reason to keep the program from causing you to lose money or comfort for ‘loyalty’. There are people out there who fly just to earn miles. People who will do a 20,000 miles Mileage Run (IAD-SIN!) just to become an Elite on an airline. That, in my humble opinion, is allowing the program to take advantage of you – unless of course, you love to fly and consider a 3 hour visit to Singapore a treat. To everyone his/her own.

My take is that I have to fly – some for work, some for family and some for pleasure. (Just to be clear – while I enjoy flying, the act of flying is never the ‘pleasure’ part of the trip). Now, I also have the choice to choose any airline that serves my travel plans. If I am to stick to one airline or alliance, the only reason I would have to give this loyalty is if I get rewarded for it. That is where airline miles help me decide which airlines to fly. As I discussed in my articles – Never Fly for Free and Why I never Fly Southwest, I do my mental math and decide if the miles justfy the additional expense or schedule inconvenience caused by taking the airline I earn miles on. Every flight you earn miles on takes you closer to an award flight, any other does not.

My experience with earning miles has been extremely fruitful. I have been able to fly my family around internationally for free. I have myself flown on an award ticket, when the costs were prohibitive and I have enjoyed the benefits of Elite Status for years. I wish the same upon you all and hope my articles are helping.

Share your thoughts by leaving a comment below.

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  1. When you earn airmiles credits on your credit card, someone has to be paying for that. Is it the merhcant, the bank issuer of the credit card, the credit card holder himself or is it the airlines. Further more if it is paid up in advance, what happens to unused airmile credits and the costs of such.

  2. Lon,

    Good question. Credit Card issuers have to purchase the miles they give you from the airline itself. So, for example, if your card gives you miles on say, Continental airlines, JPMorgan Chase who issues the Continental card will first have to buy the miles from Continental and ‘give’ them to you. This is a very good source of revenue for the airlines. Of course, Chase thinks it is of value for them to do this as it gets them your loyalty.

    Eventaually, it is the consumer who ‘pays’ for the everything, as they say. You are paying Chase back by loyally using the card and potentially paying them interest and fees that come with the card.

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