Elite Status: New year, more miles needed

Earlier, I discussed the difference between redeemable miles and miles toward elite status.  Redeemable miles are those you use to get free flights.  Elite status miles are based on the number of miles you fly each year and reset at the beginning of each year.  They are a “phantom” points system that help you earn status on that airline, but it is only good for that year.

Well, January 1 was the big day when everyone’s elite status miles reset to zero.  If you earned elite status in 2013, it is good until the end of 2014 (actually, it is good until a month or two into 2015 as a grace period), so your flying this year will be to renew your status for next year.  Confused yet?  Don’t be.  In fact, forget about last year.  Last year is done and you are currently coasting in 2014 on the fruits of 2013’s labor.  Your flights this year are what will help you continue with status next year.

Delta and United added a little twist to their status requirements, however.  In the past, you only needed to earn a certain amount of elite status points to get your particular level going forward.  Thus, at the end of each year, passengers who were close to the next level of elite status would do a mileage run to bump themselves up.  Delta and United caught on, however, and now, to earn elite status, you not only need to earn a certain amount of elite qualifying points but also spend a minimum amount of dollars on tickets with the airline.  Ouch.  One way around this requirement is to spend a minimum of $25,000 on a Delta co-branded American express card, which will waive the minimum ticket purchase for all levels of elite status.  On United, $25,000 in purchases with a credit card will waive the ticket spend requirement for the first three levels of elite status but, to earn United’s highest status level, you will need to fly not only 100,000 miles but also spend $10,000 on tickets.  Ouch.

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Delta thinks you’re fat…

Okay, it’s not quite that bad, but Delta is offering 24 miles per dollar spent at Nutrisystem.  Check out their website for the deal, which is double what they normally offer.  The deal is good through 1/9/14.

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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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Out of office notice: Through 12/21

It’s been a very busy week and I apologize for not being here, but there was a family emergency and other issues that popped up.

In the meantime, I”m putting in an out of office notice until 12/21.  I hope that you will come back then.

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An editorial thank you

I recently hit an all-time high for visitors in a day: four.  Hey, nobody said blogging is easy. 🙂

But for those of you who have subscribed and take the time to stop in, I thank you.  It’s always nice to see my google analytics show a few hits, no matter what the number.

So if you are the person that everyone asks about miles, please feel free to send them my way for the information.  As we go on, my goal is to become a one-stop shop for mileage basics.  I’d love to have the visitors.

-Mike

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American and US Airways complete merger; No near-term changes

On a good day, airline mergers are confusing.  On a bad day, well, you don’t want to be within 20 miles of an airport.  Employees have to be trained on each others’ systems, customer service rules and, for our purposes, frequent flyer programs.  For our sake, there are a couple of important items to note.

First, you won’t notice any changes.  There’s no way an airline would try to do any consolidation during the busy holiday seasons, particularly as it pertains to the customers.  US Airways customers will fly US Airways planes, likewise for American.

US Airways will become a member of the oneworld alliance on March 31, 2014.

Given the upcoming merger, my next post will likely be a full “in and out” of the American Aadvantage program.  I’ll do features on all the programs over the next several weeks.

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Should I buy miles?

It’s that time of year, when everyone is looking for the perfect holiday gift.  So the airlines are helping you out with your shopping by offering to sell you miles.  Should you take them up on it?

The answer, usually, is no.  That shouldn’t surprise anyone; the airlines aren’t going to sell miles unless they stand to make a healthy profit from them.  And even if they offer you what seem like great bonuses, you’re often paying at least a couple of cents per mile, which is a poor deal.  There are, however, two situations in which purchasing miles is not a bad idea.

First, if you are near an award, purchasing a few miles might be the fastest way to get over the threshold.  If you have 49,575 miles in your account, for instance, and you need 50,000 for an award ticket, it may be worth a few bucks.  Award tickets tend to come and go, so if you are ready to book, it’s important to get those miles as fast as possible, and buying them outright is the fastest way to do so.

Second, and this is rare, is when the airlines offer elite qualifying miles for a purchase and you are near a break point for status.  Generally, when airlines sell miles, they only sell miles that are good for redemptions and not toward elite status.  If you need your miles for elite status and the airline is offering them, then that’s the way to go.

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Turf wars: Bonus miles when an airline invades another’s territory…

Background info.  You can skip down a few paragraphs if all you want to know about is the mileage opportunity: As you may know, most major airlines operate on the “hub and spoke” system.  In other words, if you want to fly to A to B, just about any major airline will be able to get you there, but you’ll likely have to connect in that airline’s “hub,” which is a city that the airline dominates.  Delta’s major cities are Atlanta, Detroit and Minneapolis (among others) so, for instance, a passenger traveling on Delta from Boston to Los Angeles would likely have to connect in one of those cities.  United controls Chicago, Newark and San Francisco (again, among others), while American has a significant presence in Dallas, Chicago and Miami.

It’s rare that a major carrier invades another carrier’s hub.  It’s an uphill battle to win business anywhere, but to challenge an airline on its own turf, where it has a loyal customer base, all its resources and a ridiculous number of flights is costly and almost never works.

Which is why it is so interesting to see Delta’s assault on Seattle, an Alaska Air hub.  Alaska Air is known as the prostitute of the airline industry: It’s not in a monogamous alliance but has partnerships with just about everyone, including Delta.  Delta lacks its own true presence on the west coast, although it did just announce a Los Angeles-San Francisco shuttle, similar to its east coast product.

Delta figures that its size and financial strength will allow it to win share from Alaska in Seattle, but I don’t think the battle will be particularly easy.  First, Alaska Air is well known for its high quality service and ability to connect passengers in Seattle.  Delta won’t have those same advantages.  Likewise, Alaska Air has a very profitable business flying people between the Pacific Northwest and Alaska.  Nobody else could put up the infrastructure to challenge Alaska Air on these routes.  So be prepared for a very interesting fight.  And when airlines have large turf wars, they buy off their customers with mileage opportunities.

The Mileage Opportunities

Alaska Air: Sign up here to earn double miles and double elite status miles (known as elite qualifying miles) for travel between now and May 31, 2014 on seven routes out of Seattle.  Double miles is not uncommon, but double elite qualifying miles is an excellent deal that we don’t see as often.  Alaska’s deal is very similar to Delta’s (below).  You must register for the deal at the deal above.

Delta Airlines: Register here.  Delta’s is the most interesting of the three from my (i.e., a mileage geek’s) perspective.  Delta is offering double miles and elite status (known on Delta as Medallion Qualifying Miles) miles to six cities out of Seattle, including Anchorage and Portland, two Alaska Air strongholds.  Interestingly, Alaska Air did not feel a need to offer doubles to either of those cities, indicating its confidence in its strength in those markets (and it’s probably right).  But what also makes Delta interesting is that you must book the flights by December 31, 2013 to fly by October 31, 2014.  So why is this restriction so interesting?  Well, for a couple of reasons.  First, booking by December 31 for flights as far out as October will appeal to leisure passengers, since business travelers tend to book closer to the date they fly.  But Delta needs the business traveler if it is going to succeed, since business travelers pay much higher fares than leisure passengers do.  The double MQMs will appeal to the business travelers, but they’re not going to be in a position to earn them in 2014 if they have to book in 2013.

United Airlines: Wow, a three-some!  With Alaska Air and Delta both offering bonuses into Los Angeles and San Francisco, United has been forced into defense mode to defend its turf.  Since it’s playing defense and not offense, it’s offering the worst deal of the three, which you can register for here.  So why is United’s deal lacking? First, you only earn double miles for redemptions, not for elite status.  Second, like Delta’s you must purchase your travel before the end of the year but you have to fly by May 31.  That won’t help the business travelers who will be flying next year but don’t know when.  But, more importantly, the deal is only good for those booking tickets going forward.  In other words, if you booked a ticket last week, before United launched its deal, you won’t get the bonus,

The Bottom Line: It’s free to register for the bonuses, so you might as well do so, even if you don’t think you will fly qualifying flights.  But if the bonus is important to you, be sure you understand all the restrictions.

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Earning miles with credit cards

First, I should note that earning miles with credit cards is one of the easiest ways to rack up a lot of miles quickly.  I’m also going to point out that the amount of information regarding credit card miles is so vast that it would be a blog in and of itself, so I’m going to start with the basics and get more involved as we go.  There are two primary ways to earn miles with credit cards.

First, most credit card companies have sign-up bonuses.  The bonuses can be as low as 5,000 or 10,000 miles and as high as 100,000.  They often come with caveats, such as spending a certain amount of money on the card within a certain period of time.  Some cards give you elite status if you spend enough, others give you free checked luggage.  Just read the terms and conditions, as well as the advertisements that are plastered all over the airlines’ pages.

Second, you generally get one mile for every dollar that you spend.  Often, you get bonus miles for spending on the airline itself.

Note that these credit cards often have annual fees (occasionally waived the first year) as well as punitive interest rates if you don’t pay your full bill at the end of the month.  There’s not much you can do about the first, at least according to the terms and conditions of the card, but a call to customer service will often get the annual fee waived.  The second is easy: just pay your bill on time.

For now, be aware that credit cards are an easy way to generate miles and I’ll discuss more in-depth strategies as we go.

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What is a “mileage run?”

It’s usually around this time of year that newspapers will write articles about the crazy things that mileage addicts do to bump up their accounts at the end of the year.  Often, it’s in regards to people who are only a few miles (or thousand miles) away from the next tier of elite status and want to make it over the hump.  And since only miles that you fly count toward elite status (also known as “butt-in-seat” miles), they need to get on a plane.  The problem is, they have no plans to take trips before December 31.  What to do, what to do…

In this case, some people will take what is known as a “mileage run.”  The concept is simple: For a mileage run, you don’t care where your flight takes you.  You simply need a certain amount of frequent flyer miles.  For lack of a better term, it’s a trip to nowhere that usually involves choosing a cheap destination, boarding the aircraft, arriving at your destination and then hopping back on the same plane and returning to your origination.  For a mileage runner, the only thing that matters is getting a certain amount of miles as cheaply as possible.

Example: Let’s say you’re a New York resident and have 23,000 miles year-to-date on American Airlines.  You know that getting 25,000 miles for the year will earn you elite status for 2014, so you decide to do a mileage run.  Since Florida always seems to be a cheap destination (not a lot of business travelers on this route), you check out a couple of the flights to Florida.  Bang!  A round-trip flight to Palm Beach is only $218 and earns 1,035 miles each way!  You book a flight that leaves out of La Guardia at 7:30 am and arrives at Palm Beach at 10:40.  The return is only 45 minutes later, at 11:25 and gets you back to New York at 2:10 pm.  It probably uses the same plane, so you don’t need to worry about a late arrival.  You’ve earned elite status and have the whole afternoon left!

The above example is about as simple as it gets.  A non-stop flight in an inexpensive market is every mileage runner’s dream.  Often, you simply have to go to your airline’s website and keep trying destinations until you find one that meets your criteria.  It can take a few minutes, but leisure destinations such as Florida and Las Vegas often have great fares.

If nothing else, mileage running leads to great stories.  Often, you will see the same crew on the return as you had on the outbound.  Since mileage running has become so common, they’ll know exactly why you’re there and everyone will have a good laugh.  Other times, you’ll find yourself on a flight from New York to Boston.  By way of Los Angeles.  Even the customs officials are in on the game.  I once did a mileage run to London and the woman at customs thought it was suspicious that I had only spent a few hours in the country until I explained what I was doing.  After that, she shook her head, rolled her eyes and stamped my passport.

Bottom line: There’s little that a bit of ingenuity and fun can conquer.

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