The New York Time has caught up with the news from this Spring that Delta and United Airlines are changing the way they will issue award miles starting in 2015. It is, as declared by the paper, the “fadeout” of the mileage run. But is it really??
The story notes that status now comes with a price tag attached: There is a minimum revenue requirement to reach any particular tier in the new Delta & United program rules. Of course, they miss the part where that is relatively easily overcome by carrying the correct credit card, something those dedicated to the craft know all too well.
Moreover, the story continues to focus on the Mileage run as a source for award miles, those used for taking more trips in the future. There is the anecdote shared by Gary Leff of 5x award miles for a cheap fare to Asia in 2003 as an example. Somehow – more than 10 years later – it seems that the Gary and the NY Times have realized things the programs changed. Color me shocked.
The shift has been slow but steady over that time. Fares are going up (not because planes are more full as suggested in the story but because the airlines are getting better at controlling capacity growth and actually operating profitable enterprises) and that makes the cost of earning a point a bit higher. But the true mileage-focused saw a tipping point years ago when generating points via credit card transactions became cheaper – and often less time consuming – than getting on an airplane. Even without a credit card it is possible to simply buy miles outright from many airlines at rates well below those associated with a mileage run today. In that context the mileage run has been dead for quite some time.
But it is not dead. Far from it, in fact, when it comes to elite status. The story almost gets that, though it is suggested that such runs will only be useful for topping off an account:
[M]ileage runs will continue to be useful for travelers who are within a few miles of reaching the next elite status tier. The minimum spend requirement prevents travelers from building their entire path to status on cheap tickets, but one long, cheap flight can still put you over the hump to silver or gold as long as your previous trips were reasonably expensive.
Except that with a <$100 credit card those minimum spend requirements disappear. And I probably get some additional benefits included in that annual fee as well.
It is also suggested that award costs have all gone up making points less valuable. And it is true that for premium cabins and long-haul trips that is generally the case. But it is not a universal rule that all awards are more expensive now. And the part where the VAST majority of awards booked are domestic trips – a product where the rate hasn’t really changed in a long, long time – is ignored. So is the part where higher fares redeemable at the same point value actually increases the value of those points rather than decreasing it. No need to draw a distinction there, I suppose.
Gary calls the story “one of the best mainstream pieces on the current state of mileage runs” which is hard to believe. I guess given that it is roughly the only mainstream story in the past 3 months it is one of the best, but that’s hardly a yardstick to be measured by. Mediocre advice quoted in the NY Times. Hooray!
The mileage run is dead by 2003 standards. And it has been for years. But it is not completely dead. There are still plenty of games to be played.
They’re just different games than they were a decade or two ago.
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You mention several times in this post that a credit card can be used to sidestep the new minimum spend requirements. The only such exception for United expires this year, doesn’t it? Or do you have some inside information that it will be renewed going forward?
I maintain that this was pretty darned good for the New York Times, and compared to most mainstream coverage; the difference between elite and redeemable miles; the economics of mileage runs and the difference between average cost and at the margin; and the nuance of different revenue requirements for status vs. break-even on redeemable miles.
Perfect piece? No, but given desirable length and venue pretty good.
Does it take precisely your perspective? No. The decade-old story was offered as an extreme contrast … lower fares, bigger bonuses .. not as a suggestion that that’s how it was until recently.
The article doesn’t mention co-brand credit cards, but it wouldn’t change the analysis. Fares are pretty high now, mileage running from zero to status never made sense on an opportunity cost basis except for a very small number of people (too small for the audience of the piece) who valued the flying itself rather than seeing it as a tax.
Not perfect. But pretty darned good. And mileage runs haven’t made sense for awhile for redeemable miles, they haven’t ever really made sense from zero to status or at least not in a really long time, but they still make sense at the margin as I noted if you’re close to status (eg flown 90k need to hit 100k and plan to fly a lot in the coming year).
Very little to complain about here really. Or do you have a preferred mainstream article on the subject you can point to, other than anything Scott Mayerowitz may well have written?
@seth
@gary leff
lol you 2 are always beating up on each other. pretty entertaining, but i digress…
can you please provide some info about using status on various airlines with award tix ONLY? which airlines even allow award upgrades based on status?
any opinion on the agean star alliance gold for 3yrs trick please?
thanks!
Seth, for once I agree with you …but probably only until I make Million Miler 😉 Mileage running has been fun though, and I’ve always enjoyed the chance to go flying!
In response to Gary, I disagree with the sentiment that mileage running from zero is somehow a waste. I made 1K last year for a little over $500 out of pocket last year (it’s possible!) with no real reason to fly United, maybe other than attending the Chicago seminars and my continued quest towards lifetime status. I feel the value of the RDMs alone more than justified the flying (not to mention upgrades, lounge access, increased flexibility, etc.), but I actually had a lot of fun doing it…more fun than going to Walmart at least.
Seth I’m a bit confused why you said there are “plenty of games” still to be played but alluded to none of them. Are these “tricks” that need to be kept secret? If not can you please elaborate?