The Best Mileage Programs Are Close to Home

On Frequent Flyer Miles
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Editor's Note: This story was originally published on August 7, 2007. To see the most recent SmarterTravel articles on related topics, please click on any of the following links: frequent flyer, mileage earning, mileage redemption, On Frequent Flyer Miles, Tim Winship.

Mileage junkies are a notoriously calculating bunch. They're forever seeking out new ways to earn miles and maximize the value of those miles when redeeming them.

One potential strategy involves looking beyond the borders of one's own country, in search of better value in mileage programs operated by foreign airlines. In looking for better deals overseas, the assumption is that non-U.S. carriers march to a different (and more generous) drummer. The truth, though, is that the best loyalty program for you is most likely found in your own backyard.

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Different strategies

For context, let's look back at the history of frequent flyer programs.

Today's loyalty programs trace their roots to 1981, when American introduced the AAdvantage program. It was one of a slew of marketing innovations in response to the deregulation of commercial aviation in the late 1970s.

Initially, non-U.S. carriers were in no hurry to roll out loyalty programs of their own. Outside the U.S., airline executives were ambivalent about, if not hostile toward, mileage programs. At the time, airline marketing consisted of soft-focus beauty shots of an alluring flight attendant serving a sumptuous meal to a coddled traveler reclining in an impossibly cushy seat. The idea of promoting an airline using rebates, or bribes, seemed downright tacky.

But the size of the American market made it a crucial one, and foreign airlines could not ignore the effects of the new loyalty schemes. Not only did these carriers lose American customers to mileage programs, they soon realized their own customers were also enrolling in the programs of U.S. airlines.

Forced by the undeniable success of the American programs, foreign carriers reluctantly began rolling out their own programs. Their ambivalence showed. They often restricted mileage earning to more expensive fares, reasoning that cheap tickets were sufficient to lure price-sensitive travelers. They also set award levels somewhat higher than in U.S. programs.

In short, there was a period during which American programs were more generous than those in Europe, Asia, and elsewhere. That disparity created an incentive for travelers residing in those regions to participate in U.S.-based programs, rather than programs operated by the airlines based in their own countries.

But in a competitive global marketplace, such disparities are bound to be short-lived. For the same reason that overseas carriers were forced to operate their own programs in the first place, they eventually revised their policies to more closely resemble those of American programs.

Today there is little difference between the earning or redemption rates of U.S. programs and their counterparts in other parts of the world.

Think globally, act locally

If earning rates and award levels are comparable whether the program is based in the U.K., Jordan, Japan, Peru, or the U.S., why choose one over the others?

Program managers know their programs can't be all things to all people, so their primary focus will always be on catering to the interests of home-country customers. To do that, they tailor their programs to meet the needs of the local market first and citizens of other countries second.

Specifically, airlines typically populate their programs with country-specific partner companies. While many programs may have similar lineups of participating airlines and hotel chains at their core, they will differ at the margins, offering earning and redemption options geared toward residents of particular countries.

For example, members of British Airways' Executive Club can earn miles for shopping at U.K.-based Tesco retailers. That's nice, if you live in London. Similarly, members of United's Mileage Plus can earn miles when shopping at Safeway stores, which is of no help whatsoever to a Londoner.

For the local market, the local program rules.

There's no place like home

At least where frequent flyer miles are concerned, U.S.-based travelers have it best.

Because the U.S. market for travel is so large, and the competition so intense, American consumers enjoy a wealth of mileage program choices. The largest of those programs are by far the largest in the world, offering participants more opportunities to earn and redeem miles than programs based anywhere else.

When it comes to earning miles, Americans need look no further than the programs of their hometown airlines.

 
 
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