How Do Airline Mileage Programs Work?

Frequent Flyer miles, like all points related programs, are typically referred to as ‘incentives’ or rewards for ‘loyalty’.  In a fairytale world of Princes and Princesses this would accurately describe points programs.  But the current status of most mileage programs will not result in a happily ever after.

Wikipedia reports that in 1981 American Airlines was the first airline to start a frequent flyer program.  They named it AAdvantage.  Many airlines quickly followed American’s lead.

Here is the basic premise behind mileage programs.  We (the airline) want you to come and fly with us.  And then we want you to fly with us again, and again, and again.  So here is what we plan to do.  We will reward you for flying with us.  The more you fly with us, the better off you are.

Not only do points earn you additional flights or upgrades. They also become a measure for your status.  The higher your status the more access you have to private airlines features like lounges and priority service.

The rewards programs have grown and morphed into huge money making opportunities for airlines.  So today there are hundreds of ways to get points without flying or using a certain rewards program’s brand.

Unfortunately, there are several problems with mileage programs:

  1. They have provided massive income generating opportunities.  Points are sold to organizations to use to promote their product.  Thus, when you get a credit card from Chase they have provided something to the brand for the right to attract customers with the points.  As a result, they are less about giving you a reward and more about increasing the airline’s profits.
  2. Points programs have become extremely popular.  Airlines are releasing as many reserved seats as before, but there are so many more points owned by people.  The result – limited availability.

While I still enjoy earning flyer points I have refocused my attention to getting hotel points.  I don’t want to be completely negative about mileage programs.  I could not have gone to Europe with my wife and in-laws if we didn’t all fly free on points.  But, I still think hotel points are a better value. Here’s why.  When collecting flyer points just be sure to do so with realistic expectations.  You may get a free flight, but you likely need to book 350 days in advance, fly on a Wednesday, and stay for either 4 or 9 days, along with paying booking fees and taxes.  Doesn’t sound to me that they are really going out of their way to reward the customer.

For more information read about deciding which points program is best for you.

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