10 Things We Hate About Frequent-Flyer Programs

Award Price Increases

When we asked Winship to name the worst new trend in the frequent-flyer space, he cited award price increases. "This is something we have seen consistently since the beginnings of these programs. Every time an airline or a hotel program increases the number of miles or points required for a free flight or a free room night, it devalues all of the miles sitting in your account. And the programs have written language into their terms and conditions that gives them the right to change the program—including increasing the prices for miles and awards—whenever they choose and without warning."

The Decreasing Value of Entry-Level Elite Status

For those who travel less often, frequent-flyer programs progressively offer less and less value. According to Winship, "Looking at the road warrior vs. the infrequent traveler, increasingly, earning just entry-level elite status is worth less. In particular, the principle associated with elite status is upgrades. There are obviously a limited number of upgrades to go around, and they are increasingly scarce today. If you are an entry-level elite member, your chances [of getting an upgrade] have gone down drastically."

Non-Flight Awards That Offer Less Bang for Your Miles

Non-flight awards, such as retail offers, seem all well and good, but they can distract travelers from getting maximum value out of miles. "On the redemption side of the programs, the least valuable awards would be non-flight awards, and by that I mean the opportunity to use your miles for hotel stays, car rentals, and consumer electronics," explained Winship. "Those awards are bad deals for consumers. If you do the math and look at what kind of actual value you're getting for your miles, you'll find that you would be getting between a half a penny and three quarters of a penny in value when redeeming for those sorts of awards, compared to 1.2 cents and more when redeeming your miles for a free ticket. So bottom line, you're best off avoiding those awards in favor of free tickets, because that's where the value lies in these programs."

Cash Surcharges for Upgrades

You'll likely need more than miles when angling for an upgrade nowadays. "The new trend right now is to charge not just miles but a cash surcharge for upgrades," said Winship. "It's headed in the direction of that becoming the industry standard. So when you want to upgrade, it will be not just miles but miles plus cash—in some cases as much as $500 each way. These are significant amounts of cash. I'm already missing the old days."

When It's Easier to Earn Miles … It's Harder to Redeem Them

More is not merrier for frequent flyers. Winship told us, "They say that there are more than 1,000 different companies from which you can earn miles when doing business. And that includes just about every category of business, whether you're buying jeans at the Gap or getting a mortgage on your home. So from that standpoint, earning miles has never been easier. It's the other side of the equation that's the bottleneck: Increasingly, you find people who are not earning any significant portion of their miles through travel. You've got more elite members out there, and what the airlines have been doing is reducing capacity. So you have more people chasing after fewer first-class seats. The people who get squeezed out are the lower-level frequent flyers."

Lack of Consumer Protection

Air travelers need to know that frequent-flyer programs are not well regulated and that members have little recourse against the airlines. "When you sign up for one of these programs, you basically sign away your rights as a consumer," said Winship. "You agree to play on the airlines' terms. And their terms give them the right to do whatever they want. From that standpoint, they've covered themselves legally."

Furthermore, there's little travelers can do about the airlines' hefty terms and conditions. According to Winship, "We can't choose one airline over another because they all have effectively the same disclaimers. Essentially, there's no choice. If you look at the airlines' terms and conditions, you can see they've basically copied each other."

Consumers Are "Flying Blind"

Which programs dole out awards more lavishly than others? It's almost impossible to tell. "The government does not force the airlines to disclose in any meaningful way how generous they have been with their award availability," Winship told us. "So consumers don't know [the level of award availability] when they sign up for an airline's program. All they have is anecdotal evidence as to whether that program is better or worse than any other program in terms of awards. Consumers are basically flying blind when signing up."

The Rise of Revenue-Based Programs

One new trend in frequent-flyer programs is bad news for consumers. According to Winship, "There's a shift from the traditional mileage-based programs that are currently in place at major airlines to what I call revenue-based programs like those of Southwest, Virgin, and JetBlue. The revenue-based programs award points in proportion to the cost of the tickets that you buy. With this new sort of program, there are winners and losers. The winners are typically business travelers and people who are traveling on unrestricted tickets. The losers are the people who are traveling on discounted coach tickets, plus people who leverage the value of frequent-flyer programs by earning miles through cheap travel and them redeeming for expensive flights. With the revenue-based model, there really isn't any leverage possible—so that's going to be a big sea change."

Limited Seat Availability

Overall, what is frequent flyers' biggest complaint? "Award availability is the primary focus of most people who participate in these programs," explained Winship. "[They're saying,] 'I did my part and I earned my miles, and you're telling me that no seats are available?'" It's not impossible to cash in miles for free tickets, but flight, date, season, and destination restrictions—as well as competition from other program members—makes cashing in for the right flight a very tough proposition.

The Risk Of Devaluation

According to Winship, the biggest risk flyers take when joining frequent-flyer programs is the danger of devaluation of miles over time. He told us, "That has to do with the increase in price of awards, it has to do with the decrease in availability of awards, and it can also be related to partner changes. If a partner airline or hotel leaves a program, this can have an adverse effect on the value of your miles, especially if it was a partner that you relied upon either to earn or redeem your points. So there are many factors in play here that can contribute to the devaluation of your miles."

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