Travel Rewards Credit Cards

Dec 26

JetBlue: Frequent Flyer miles based on dollars spent

When frequent flyer miles were first created, nobody imagined how popular they would become.  Sure, they’d be an interesting program for travelers, but that’s all they’d be.

Oops, got that wrong.  Frequent flyer miles are everywhere, which is a major bonus for the airlines, given the profitability of selling them.  But there’s a problem: There are so many miles outstanding that they become much more difficult to use.  When a $250 ticket from Boston to San Francisco generates 2,500 miles and a $250 ticket from Boston to Philadelphia generates only 200 miles, there’s a clear issue relating to the value of the miles.  Had the programs’ creators understood the future possibilities of the miles, they would have done what JetBlue does: award points based not on miles flown but on dollars spent.

Thinking about it now, such a program makes perfect sense.  The airlines’ profitability is based on dollars spent, not miles flown, and I’d look for more programs to change their programs to make them more like JetBlue’s.

Jet Blue has an extraordinarily easy program to understand: Earn three points per dollar spent on tickets, or six points if you are buying those tickets on JetBlue’s website.  Flying your pet or buying a seat with more space?  Get bonus points for that.  Use the JetBlue credit card?  There’s a few more points.

Rewards are a bit more complicated, but also make sense.  Instead of having blackout dates or various tiers of awards that vary based on an airline’s whim, Jet Blue has one price based on demand for that particular date and flight.  That method allows the airline to offer every seat available for points.

Nothing is perfect, but JetBlue’s plan is the closest one that not only makes sense but is also easy to understand.

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