If you’ve been planning to take a vacation with your frequent flier miles, expect airlines to make that process more difficult and more expensive than ever. Industry mergers and increased passenger counts are limiting seats on flights these days, making the investment in an airline’s loyalty program a bad deal for consumers in almost every case.
What is different about cashing in frequent flier miles for flights these days? As consolidated airlines like US Airways (NYSE:LCC) survey the future, they notice a higher percentage of filled seats on flights. More efficient routes have allowed airlines to trim their expenses, making for better earnings yet fewer seats to reward travelers for loyalty. The proliferation of traveler reward credit cards like United (NYSE:UAL) and Delta (NYSE:DAL) offer passengers is also increasing ways for customers to earn miles.
As a result, attaining “elite” status on airlines will be more difficult since it will be more common, according to CNBC. Most airlines will increase the amount of miles needed to qualify for the upper echelon categories while others start selling the perks of the elites for small sums. In other words, it could be cheaper to find a discount flight with low-cost upgrades and get cash back on credit card purchases than to expect an airline to redeem miles cost-effectively for a flight you want.
The bad news doesn’t end there. Spirit Airlines (NASDAQ:SAVE), a one-time discount option that now typically eclipses the fares of other providers, will charge fees in excess of $100 for “free” flights earned via miles. The miles themselves are even up for grabs: Delta is giving only a percentage of miles earned on student and discount fares.
That price-per-mile model will likely become the norm for most major airlines. How much you spend on a flight will be the deciding factor on how many miles you end up receiving. The system will work for redemption as well. By assigning a value per mile, redeeming flights on the shorter end of the spectrum — say, New York to Chicago rather than New York to L.A. — would cost you fewer miles on the other end. Frequent flier programs just aren’t much of a value for travelers these days.
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