This is big news: In an era of increasing fees, nickel-and-diming, and shifting frequent flier mile award charts, Delta is going the opposite direction. Retroactive to January 1, 2011, Delta SkyMiles no longer expire.
Until now, you needed to engage in some sort of activity every 24 months — either by earning or redeeming miles — in order to keep your account alive. If you didn’t, poof!, your miles disappeared.
This move is primarily a change for the better for the infrequent Delta traveler. After all, if you were a regular Delta (or SkyTeam) customer, you weren’t really worried about the expiration date, since you kept racking them up.
Rather, this helps the little guy and is bound to build up a great deal of goodwill.
For years, selling miles for cash has been a gray area — legal, but a violation of the terms of the frequent flyer programs.
But now Points.com, the company that lets you switch miles from one program to another, for a fee, has partnered with Paypal, which effectively converts miles to cash.
Since airlines have to agree to participate in Points.com, those “legal” hurdles are out of the way. It’s perfectly legit now to make the switch to cash.
Participating airlines at this point are few and far between, but a few biggies are in there: American Airlines AAdvantage, Air Canada Aeroplan, and US Airways Dividend Miles are the only players, so far.
The biggest problem is the actual value proposition: They’re terrible. Don’t expect big cash payouts.
If you want to get $100 cash, you’ll need 17,734 Air Canada Aeroplan miles, 24,118 American Airlines AAdvantage miles, or a mind-boggling 120,589 US Airways Dividend Miles.
120,589???! For $100??? Are you freaking kidding me? That’s a business class flight to South Asia. That’s three coach tickets to Hawaii. That’s … worth well more than $100.
The other airlines’ options are not much better. AC miles come to 0.56 cents per mile. AA miles are worth 0.44 cents per mile. And US miles… 0.083 cents per mile. That’s insane.
While, in theory, it’s nice to see more choices for redeeming miles, there’s no way on earth I’m participating in this.
United has offered up an innovative new spin on cashing in frequent flier miles: “Weekend Saver” discounts. But is it worth spending your miles on this?
The concept is essentially the same as their e-fares: For last-minute reservations on flights from their hub cities, you pay less than the normal walkup rate. Your travel dates are limited, and you never know more than a week or two in advance which cities will be in the mix. It’s all determined by supply and demand.
For cash fares, this can be a good deal if your travel plans align with the e-fare rules (typically a Saturday departure and a Monday or Tuesday return). But for fares “paid” with miles, the discount isn’t as enthralling. You’re getting a discount on the mileage cost, but the product you’re buying is already discounted.
For example, the e-fare for Chicago to Los Angeles this coming weekend is $135 each way, plus taxes. (That comes to $291.40) The Weekend Saver fare: 19,000 miles, instead of the typical “saver” rate of 25,000 miles. That comes to about 1.5 cents per mile. That’s better than the 1.1 cents per mile you’d be getting if paying 25k miles, but it’s still not great value. But if you’re in a gotta-go, low-on-cash but miles-rich state, this could come in handy.
Nonetheless, it’s nice to see an airline offering discounts.
Back in September, I posted about the amazingly huge mileage bonuses which Citibank was offering new American Airlines AAdvantage Visa and Amex cardholders. For no annual fee in the first year, you could get 75,000 or 100,000 miles for reaching spending thresholds.
I opted for a personal Visa card that offered up 75,000 bonus miles after just $1500 in spending. I quickly reached the threshold, and the bonus appears on my current statement (screenshot above). The miles were reflected in my AA account the next day.
Echoing Gary Leff’s comments on this subject, these bonuses are among the best credit card mileage offers that have ever been made available. If you’re feeling particularly frisky, sign up for one personal card and one business card. If you’ve got a partner, have the partner do the same. This is an easy way to rack up a boatload of miles in one of the best programs out there, a program that actually has solid award availability.
The mega-offers run out on October 31, 2010, so act fast.
Here are the links again.
75,000 miles after $1500 in purchases within 6 months, no fee the first year:
- 75,000 mile bonus: Visa
- 75,000 mile bonus: Visa Business
- 75,000 mile bonus: American Express (issued by Citi, not Amex)
100,000 miles: 50,000 miles after $750 in purchases within 4 months, and another 50,000 miles after $10,000 in purchases within 12 months, no fee the first year
Reader and friend of the blog Bill writes in:
A friend of ours doesn’t think she’ll be traveling anymore and wants to give us (insert drumroll here) 300,000 USAir Dividend Miles. I looked on their website and their transfer page has a dropdown that only goes to 50,000 and has a charge of $500 (Plus 7%) for that. That would mean it would cost about $3300 to transfer 300,000 miles, which would be about the same as just buying the tickets in the first place. Surely I’m misunderstanding this. If not, why don’t they just say “you can’t do that”?
You’re not misunderstanding this, Bill. Transferring miles comes with limits, and with high price tags. Airline-internal programs (between friends) and the points exchange offered by Points.com (between strangers) are both pricey.
At those prices, you’re frankly better off buying miles outright from US Airways. (I generally don’t recommend that either, given the high price, but US Airways has a 100% bonus running right now through November 15, 2010, for you to consider. Anyway…)
So what’s the best way to transfer miles to another person for award redemption?
Simple. Don’t do it.
Your very generous friend should just book the tickets for you, rather than transferring miles to your account. This is perfectly legitimate, according to the US Airways Dividend Miles program rules:
1. You may redeem your miles for award tickets for use by any person you designate. Simply provide the passenger name(s) at the time reservations are made.
2. Name changes are not permitted. If you or the person you designate are unable to travel, you may redeposit your miles into your account for a redeposit fee.
Of course, you’ll want to pay your friend for the cost of any taxes and fees incurred. She will be stuck with those costs when she books the ticket, so stay on her good side and reimburse her quickly.
One other warning/recommendation: There have been reports of travelers being questioned by airline staff when the travelers aren’t the ones whose mileage account paid for the tickets. Some folks with high frequent flier miles balances have sold their awards, which violates the program policies. So, to avoid a hassle, make sure your friend writes a short note on your behalf. The note should simply read something like this:
To whom it may concern,
I have given Bill a gift of this ticket, issued with miles from my account [number]. Bill has not paid me anything for these tickets. If you have any questions, please feel free to contact me at [phone number].
[Bill's generous friend]
Good luck getting the tickets you want. And consider yourself lucky to have such a generous fiend.
As of Friday, American Airlines and British Airways (and I suppose Iberia, too) finally made their membership in the oneworld alliance closer to equal footing: Prior to Friday, you couldn’t earn or spend AA miles on trans-Atlantic BA flights from the US. As of Friday, you can earn and burn AA on BA, which truly upgrades the alliance. But…
If you’re going to cash in your AA miles for a flight on BA, though, you’re going to pay through the nose. BA slaps fuel surcharges onto the base airfare, which are payable even on frequent flier tickets. Those fuel surcharges can run as high as $500 for a roundtrip ticket in a premium cabin, on top of the miles you cash in. What would cost you $150 cash or so on an AA flight will cost you 5 times as much if booked on BA metal. This is completely and utterly lame.
The logic (and legality) of these fees has always escaped me. When I buy a plane ticket, I’m buying transportation from point A to point B, and the on-ground and in-flight services associated with that transportation. Fuel is part of that transportation equation.
By backing out the “fuel surcharge,” airlines act as if the consumer is just renting space on the plane. But last time I checked, I wasn’t just renting a chair. I also paid for the the movement of that chair across the oceans.
Maybe I’m seeing the glass half empty here. I’ve spent much of the weekend (and all of today) in bed, sick as a dog, so I’ve had had plenty to time to get crabby. Yes, this is better than before. Yes, other airlines and airline alliances play similar games. But these discrepancies within an alliance defeat the spirit of cooperation. They insult and dispirit customers, and they embolden the critics who argue that miles are “worthless” because of airline shenanigans.
I am glad they did something to improve the alliance. But I still hoped for better.