Thanks! You're all signed up.

X

Airlines Rewrite the Rulebook on Expiring Miles

SmarterTravel

These are dispiriting times for members of the nation’s travel rewards programs. These loyal flyers continue to watch the value of their frequent flyer miles decline as a result of a flurry of policy changes.

The latest consumer-unfriendly policy change is from American, which announced that beginning June 15, members of its AAdvantage program must have activity in their accounts every 18 months in order to keep their miles from expiring. The new expiration period is now half of the previous time limit that, until recently, governed most major mileage programs.

As the operator of the original and largest mileage program, American has long been a trendsetter in travel rewards programs. While the airline wasn’t the first to amend the three-year mileage policy, doing so signals the official demise of the old industry standard.

Of the full-service carriers’ programs, the current expiration policies are as follows:

  • Three years: Alaska Mileage Plan, Northwest WorldPerks
  • Two years: Delta SkyMiles
  • Eighteen months: American AAdvantage, Continental OnePass, United Mileage Plus, US Airways Dividend Miles

With two of the top three U.S. carriers now in the 18-month camp, a reduced standard is likely to be adopted by Alaska and Northwest by the end of the year.

Changes are driven by financial considerations

The airlines typically don’t justify program changes any more than they explain ticket price increases, but the reasons for the changes aren’t hard to find. First, the new expiration policies will inevitably reduce the number of outstanding miles in members’ accounts, which are carried on the airlines’ books as contingent liabilities. Reducing liabilities makes for healthier balance sheets and happier accountants.

A revenue effect is also likely to flow from the new rules. Forcing program members to be more active will increase the number of tickets they buy and the number of purchases they make with the hotels, rental car operators, and other partner companies that award miles in the programs. Both are good for the airlines’ bottom lines.

While the new rules may rankle hard-core frequent travelers, the real-world effect on their mileage accounts will be negligible. They travel so often that it will be easy to keep their miles viable, even if they participate in multiple programs. If they cut back on trips—because they change to less travel-intensive jobs, for example—they’re still unlikely to be blindsided by the new rules.

For the casual frequent flyer program participant, the shorter expiration period can be a difference-maker. These travelers will now need to be extra-vigilant: If they allow their attention to stray, they could lose many of their miles.

To retain miles, stay informed and active

The good news for those whose miles are at risk is that maintaining a mileage account indefinitely is a relatively straightforward matter, requiring more awareness than effort. Mileage retention is a simple two-step process.

First, mileage collectors must keep abreast of their programs’ latest policies and the expiration dates for banked miles. Those dates should be prominently displayed on the periodic account statements sent to active members. But note the Catch-22: generally, only members with recent activity receive statements. Inactive program members will have to remind themselves to visit the airline website to access their accounts and review expiration information.

The second step is staying active—or at least sufficiently active to head off the loss of miles. Since any transaction that changes a member’s bottom-line mileage balance will extend the life of all miles in the account, there are many low-impact options available if airline flights and hotel stays aren’t on the horizon.

On the earning side, the airlines’ mileage malls allow program participants to earn miles, and keep their accounts active, for everyday shopping. Simply make a purchase at one of the many online retailers participating in the airline’s program. American’s mall, as an example, includes over 200 online merchants, including Bloomingdale’s, Circuit City, Dell, Gap, Lands’ End, Office Depot, Starbucks, and Waterford.

On the redemption side, most programs allow members to cash in as few as 400 miles for a magazine subscription. Don’t forget that donating miles to charity, as permitted by most programs, works as well as more self-centered transactions in extending the life of miles—a rare win-win in the realm of mileage programs, where winning is now harder than ever.

Top Fares From

Comments