A frequent flyer promo you shouldn’t pursue

I understand that the airlines operate their frequent flyer programs in an effort to generate revenue, not to give things away to passengers. Still, I wonder sometimes about just what they think of customers when I see some of the promotions that come out. If you could guarantee that your investment would be cut in half would you still complete the transaction? I didn’t think so. Yet that’s just what is on offer right now from JetBlue.

In addition to the “normal” ways of earning points, JetBlue allows members to buy points directly. Lots of programs offer a similar feature and it can be useful in limited occasions to top off an account for an award or something like that, but it rarely makes sense to buy points in any large volume. There are exceptions (US Airways’s 100% bonus is one that has been pretty common lately) but generally it just isn’t a good plan. At least the value of those programs is somewhat variable depending on the type of award and the cabin of travel. In the case of the JetBlue program that simply is not the case.

JetBlue TrueBlue points are worth between 0.8 and 1.3 cents each, depending on the reward being redeemed. It is not really possible to tweak the system and get more value from them. So the idea of paying 2.7 cents for one of those points – watching the value of your investment drop by 50-75% immediately and irrecoverably – just seems wrong to me. Right now JetBlue sells points for 2.5-2.88 cents each. Add on the 25% bonus that is running through January 15, 2011 along with the 7.5% excise tax and the $20 transaction fee and you’re rarely going to get much lower than that 2.7 cents per mile cost.

Unless JetBlue dramatically changes the structure of their loyalty program – a move that seems HIGHLY unlikely in the near future – buying points there is a rather questionable investment.

And, just to be clear, I’m not picking only on JetBlue here. American Airlines commonly runs similar programs (right now it is a 25% bonus on transfers from one member to another) as do the other carriers. None of them are generally a good value. Indeed, only the US Air deal mentioned above has ever consistently shown itself to be a worthwhile investment and then only if you’re into long-haul premium cabin seats.

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Seth Miller

I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, and LinkedIn.