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Competition Heats up for the Best Mileage Program

On Frequent Flyer Miles
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Photo: PhotoDisc
Editor's Note: This story was originally published on May 1, 2007. To see the most recent SmarterTravel articles on related topics, please click on any of the following links: American, ATA, Delta, frequent flyer, JetBlue, low-cost airline, mileage earning, mileage redemption, On Frequent Flyer Miles, Southwest, Tim Winship, United, US Airways.

The undisputed stars of the airline industry over the past seven years have been the discount carriers. But as full-service airlines have lowered their costs through bankruptcy and restructuring, they've been able to close the gap between their "full-service" ticket prices and those of the discount carriers. At the same time, the discount carriers' costs—for fuel, to underwrite expansion, etc.—have been on the rise, forcing them to raise their ticket prices to maintain profitability.

Bottom line: The historic price advantage claimed by the low-cost carriers has never been slimmer. For all the discount carriers' boasting about their rock-bottom fares, consumers in many cases can find comparable prices from the legacy airlines.

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With prices closer to parity, the value added by frequent flyer programs can in theory be a tiebreaker, moving the needle in favor of the legacy airlines and away from their lower-cost rivals.

Whether mileage programs are a difference-maker for any particular traveler depends on which aspects of the programs are most important to that individual, and just how important they are. Following are some of the key program features and benefits that today's savvy travelers factor into their choices between old-line carriers and discount airlines.

Earning and redemption

Airline loyalty programs, first and foremost, are about earning miles and cashing them in for meaningful rewards. The more opportunities to earn miles, and the more available award options, the better.

If bigger is better, the mileage schemes of the major airlines are clearly the best. The programs of American, Delta, United, and their ilk boast hundreds of partner companies that provide miles to program members. On the award side, their tie-ups with multiple airline partners mean miles can be redeemed for flights to destinations practically anywhere in the world.

By comparison, the programs of such low-cost carriers as Southwest and JetBlue are bare-bones affairs. Southwest Rapid Rewards participants can earn credits with four car rental companies and six hotel chains, as well as for credit card charges and flights on ATA. On the award side, credits can be redeemed for flights on Southwest or ATA. Members of JetBlue's program are limited to earning points for JetBlue flights or charges to the TrueBlue credit card, and redeeming points for more JetBlue flights.

Advantage: the full-service airlines.

Promotional opportunities

In addition to the ongoing mileage-earning partnerships, programs are more or less attractive insofar as they offer their members more or fewer limited-time opportunities to earn bonus miles for flights or other activities. It's no surprise that the largest programs offer the most opportunities.

To appreciate the point, one has only to compare the special offers currently in place for members of the programs of American and JetBlue.

According to American's website, AAdvantage members have, as of this writing, a wide range of mileage promotions to choose from, including eight separate flight bonuses, three bonuses from hotel chains, nine car rental offers, and six other miscellaneous bonus mile offers.

Perusing the JetBlue website, by contrast, there's only one special offer for TrueBlue members: double points for flights booked online. That's not even a true promotional offer because it's a permanent feature of the program.

Advantage: the full-service airlines.

Elite benefits

For those who travel enough to earn elite status in an airline program—typically awarded for flying 25,000 or more miles during a calendar year—full-service carriers have a definite advantage over discounters. That's very simply because the discount airlines generally don't have first-class cabins or airport lounges, so they simply aren't in a position to offer the upgrades and other perks associated with elite status in a full-featured program.

Advantage: the full-service airlines.

Mileage expiration

Until recently, the contrast between the mileage expiration policies of the full-service carriers and their low-cost counterparts was especially stark. Where the former allowed program members to extend the life of their miles indefinitely by earning or redeeming miles every three years, the latter summarily wiped members' miles off the books after just one year. If hoarding miles for the long term—or just having sufficient time to reach an award level before points disappeared—were a priority, the old-line carriers were the clear choice.

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