Travel news you can use from The Travel Detective®
Sign up for our FREE daily or weekly newsletter

The Travel Detective on the Future of AAdvantage and All Miles Programs

Airlines & Airports, Featured Posts, Latest News & Archives, Mileage & Reward Programs, The Travel Detective® Blog, Travel Planning — on November 4, 2011 9:52 am
The Travel Detective on the Future of AAdvantage and All Miles Programs

Last week Peter and Terry Maxon talked about American Airlines’ budget crisis. With whispers of bankruptcy, consumers are wondering if their frequent flier miles are at risk. The Travel Detective takes to his blog to examine the future of American’s AAdvantage Miles and all miles programs.

American Airlines has had horrendous quarterly results the last couple of years at a time when every other airline is making a profit. But, historically American Airlines holds the record as the only legacy airline never to file bankruptcy. The argument could be made that the airline was never able to take advantage of the bankruptcy laws to get rid of debt. American Airlines is just negotiating some union deals now, and when that happens, watch their stock go up and things turn around. I have total faith in that airline.

American Airlines’ AAdvantage Miles are a whole other story. Earning miles is easy. You could earn frequent flier miles for everything short of breathing. Redeeming miles is a lot harder.

Airlines are filling 87 percent of their seats, that’s eight out of every 10 seats. Now the law of supply and demand takes over and there is no incentive whatsoever for the airline to redeem frequent flyer miles. For the airlines to fill those seats with a miles ticket, in many cases, would be for them to displace revenue passengers.

Airlines have created a monster here where there are more than 17 trillion unredeemed miles out there that may never be redeemed. We all like to boast how many miles we have, and everybody knows how many miles I fly, but I’m on the same boat as everyone else. Gaining and earning miles means nothing if you can’t redeem them.

Fliers should use their miles as soon as possible. The worth of those miles is only going to be devalued on a continuing bases as the airlines change the eligibility rules since they don’t want to give away the miles.

Paper Money Airplane - Cost of Flying - Save With Travel DealsMany people were induced to join this program based on an advertisement that said, when you got to 25,000 miles you got a free ticket. Guess what happened when they got to 25,000 miles? Suddenly the airline would say, “oh sorry we don’t have any seats at 25,000, we have seats at 50,000,” if they want to give them to you. That’s extortion and yet no one gets busted for it because the airlines are protected under the deregulation rule of the federal government.

Remember if you’re sitting on a lot of miles, you gain nothing and you’re earning no interest. Airlines are trying to get you to redeem miles by getting magazine subscriptions. Oh my God, if you do the math you just spent $8,000 for a Reader’s Digest.

I’m angry. Stop what you are doing right now. Run don’t walk, and find a flight you can take anywhere. Just go. Otherwise, you might as well just buy a picture frame and hang your miles on the wall.

Are you having trouble redeeming your airline miles? Are you as angry as Peter? Share your stories in the comments.

For more information, check out:

By Peter Greenberg for Peter Greenberg Worldwide Radio

  • Anomynuss

    I think businesses as a whole are shooting themselves in the foot with these “loyalty” programs… AA is not the only airline devaluing travel points over time, Air Canada has been running that scam for many decades, and then scammed their customers even more by selling it off as a Division. Their points also used to expire – but businesses in Canada commonly seek monopolies and then abuse their customers – it’s just another “Canadian Thing”.

    As soon as I realised how dishonest these programs were I looked for and signed up with a VISA credit card which gave me points on ALL of my purchases – I no longer even pull out my Air Miles card, because the places which add points to them are usually more expensive than the places which do not (so guess WHO is paying up front for your precious – and useless – Air Miles?). I’m sure my VISA company re-evaluates their travel values periodically too, but I think this is much fairer for the consumer.

    I can also accumulate points and use them for other things than travel – appliances, etc.

    I also think that the airlines-run-by-accountants phase is on the way out. They lack the imagination and human touch for such an intensive and competitive service industry where human relations mean so much. People are NOT self-loading cargo, and people do resent being nickle-and-dimed to death. And I think the LCC, too, shall pass, though to some other format.

  • Travis

    I’m a tourism professor and surprise surprise, I just gave a lecture on this topic last week.  I described how airlines sold off air miles to credit cards for what, 2 or 3 cents on the dollar etc. as well as all the other exciting incentives they throw at you…..yet there is a major backlog of air miles actually being used.  For me personally I used to fly Air Canada or some other Star Alliance member because I felt some type of loyalty to my homeland carrier.  BUT, when I saw them devaluing their air miles, I dumped them.  I’m in Delta country now anyway but am thinking I should go start using my Skymiles ASAP!

  • Marnetteseverance

    Which Visa? I’m interested.

  • Kda

    How about Southwest Airlines’ program, where every seat is available as a free ticket, just depending on when you book, and what is remaining.  As I’ve learned from my brother in law, traveling for business 200 nights a year, it’s the best program going. 

  • Hwtj

    I completely disagree with this post. Sure, if you want flight X on day Y, it may not be available at the low mileage level, but with a little flexibility, you can usually find some seats at that level (except with Delta miles). In fact, I have used miles to go to fantastical destinations in business class, a multi-thousand dollar ticket that I’ve gotten effectively for free. All it requires is proper planning and effort.

  • Sarely

    EL PROGRAMA ESTUVO GENIAL !!!!

  • Milage Guru

    Used to be, not any longer. AA is the best program.
    Any seat anytime on AA for a max of 50K. The any seat anytime on SWA, can be over 100K. Delta as well up to 100K for a domestic ticket.

    Not to mention a LOT of plan ahead business international for 100K R/T, now value of around $15,000 for 100K miles is over .15 per mile. Not to mention a first class R/T to Europe on a plan ahead is only 125K, with a value of up to $25K, is .20 per mile.

    Now do the math–SWA & Delta up to 100K—-AA up to 50K, actually very simple, AA is the best program, period.