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After reading a piece over a View from the Wing that summarized a number of 2018 loyalty statistics from Alaska Airlines, it struck me that most frequent fliers are quite poor at redeeming their miles. By far the most common use of Alaska miles was for domestic coach travel, something that does not offer the best value for your hard earned miles (SEE: The folly and fallacy of using miles for economy flights). I found this perplexing.
If these were Delta miles, I might think differently, as Delta more generally offers award prices that correlate with cash prices. But these are Alaska Mileage Plan miles, a program with a good number of decent to excellent options for premium cabin travel. Why aren’t people maximizing them?!
The top redemption destinations are all the worst value
I was surprised at the list of places most people burnt their miles. Las Vegas? Portland? Los Angeles? I sure hope you’re at least flying from some fairly remote airport that makes it worth it to avoid a high cash fare. But when you can find $49 one-way tickets between San Francisco and Los Angeles, there is no way I would consider burning my miles for that.
But obviously many people are fine with it. Maybe it’s simply the fact that they are getting a free ticket. FREE! Well, typically $5.60, so not quite free. I’d almost rather have the free muffins Costco was offering for signing up for their co-branded Citi card.
But after feeling a bit exasperated at the general tendencies of Alaska frequent fliers, I soon realized that this really isn’t a problem at all. Actually, it’s rather fortunate.
Why it’s good the majority of members don’t maximize their rewards
First, the competition for award space. It’s refreshing to know that those who are a part of Facebook and other groups dedicated to maximizing the value of their points and miles aren’t your average program member. If everyone was looking to use their miles for premium cabin space, competition would be fierce, and there would be very little to go around.
The other possibility is that premium cabin redemption might experience more rapid devaluation. If everyone was redeeming their Alaska miles for Cathay Pacific business class, I would expect to see those rewards inflate in price. Instead of charging a mere 50,000 miles one-way between the U.S. and East Asia (including a free stopover, if you can work that in), I’d expected this to go to 60,000. Then 70,000. Soon Mileage Plan wouldn’t be any different than other programs which charge 70,000-80,000 miles for awards between the same regions.
But it appears that most people aren’t interested in those types of awards, based on Alaska’s loyalty program statistics.
It may just be true that a large number of people have no interest flying anywhere besides the few places that they frequent for either work or personal reasons. In that case, sure, use your miles whenever you accrue enough to fly for free on the same route you always fly. That totally makes sense to me, if that is your situation.
But if you’re using miles to fly from Seattle to Phoenix and then paying over $1,200 cash for a summer ticket to Europe, you might want to re-think your strategy.
Other factors to consider
It may well be that there are a good number of road warriors who earn their Alaska miles by the ol’ butt-in-seat method of actually flying. If this is the case, then you may be “stuck” with some miles that may not be useful for getting where you want to go, and burning them on short domestic hops might be the best option.
But we also know that airlines award more miles through co-branded credit card spend than they do to people actually flying, so this kinda busts the previous point. In general, I find it a better strategy to put spend on cards that earn transferable points that can either be used to transfer into airline miles, or used book travel directly.
For the SEA-PHX hop, you’d need 15,000 Alaska miles plus $11.20 for the cheapest round-trip. This requires $15,000 of non-bonus spending on the card to earn. This same trip can be obtained with 10,960 Ultimate Rewards, assuming you have a Chase Sapphire Preferred and book through the Chase travel portal. This is where using your miles for economy tickets, unless they are obscenely expensive, is not the best choice.
But you could also be a large family of eight, and spending 180,000 American miles to fly one-way in economy from the U.S. to Europe is absolutely the most economical way to get there, even if you could score one-way flights for $300 each. You’re still saving $2,400. Sure, you could also get three Cathay Pacific business class tickets to Australia worth $7,500 or more for the same miles. But flying the family to Europe for free is the better choice. It’s always cool to get eight free tickets.
At the end of the day, and as we’ve written before on this blog, using your miles to get where you want to go is what really matters. There are definitely better ways and worse ways to do this, however. Knowing how to use your miles most effectively is a skill that can save you a ton of money in the long run, and the average U.S. loyalty program member likely doesn’t have the knowledge to put their miles to the best uses possible.
I don’t say any of this with an attitude condemning “the masses” for doing it all wrong. People are more than welcome to use their miles as they see fit, and if they are happy with a given redemption, I’m not going to fault them (unless they buy a toaster). However, I’ve spent countless hours poring over award charts, researching routes and destinations, and looking into the nitty-gritty details of loyalty programs to know that there are so many great ways to use miles in almost any program that I hate seeing them “go to waste” on a cheap economy flight. Award travel is my primary hobby and an enjoyment, and I love maximizing my miles.
So for the person who just wants to fly to Phoenix for the 4th time this year and has the ability to do so freely, by all means, go for it. I’ll enjoy my seat in Cathay Pacific business class, glad that you weren’t competing for the limited award space.