Paradigm lost

September 30, 2020

After nearly forty years spent chasing miles, the Covid crisis has made me realize that points-earning cards may no longer be right for me.

I signed on to the American AAdvantage program in 1981 when it launched and still have the flimsy plastic card AA sent me then.  At the time I was often flying several times weekly, heavily on Eastern, Delta, and United, so later joined their respective programs the moment each was offered. Soon after came the onslaught of hotel and rental car programs, and later mileage- and points-based credit cards.  I greedily gorged on them all.  But now, with apologies to Milton, I am forced to wonder if it’s a paradigm lost.

Used to be, in the early days of frequent flyer programs, my wife and I could fly JFK-London first class on a TWA 747 for 50,000 miles total.  25,000 miles each for the royal treatment when Trans World still had panache and elegance.  Their lounges were styled Ambassador Clubs.

It wasn’t just Teenie Weenie Airlines, either.  Original awards on every airline required relatively low mileage, not subject to capacity constraints if any seats were still available for sale, and mile accumulations were generous, often in 1,000-mile minimums per flight segment, and often goosed—such as being doubled—based on marketing gimmicks.

The decade of the 1980s was the golden era of frequent flyer programs.  By 9/11, the frequent flyer schemes were twenty years old, and the industry faced its first major downturn. Programs had by then become markedly more austere, with tiered awards, fewer awards seats (especially premium seats), and stratified so-called “elite” levels of so-called “loyalty” based on mileage flown per year.  Super-duper elite level flyers were allowed free upgrades and other perks not available to “general” members.

That tightened further in the early 2000s with restrictions on how super-elite levels could be reached (e.g., money spent annually mostly replaced miles flown), and elite levels were parsed again to create tippy-top groups.  To qualify, I had to concentrate almost all flying on one carrier and pay higher fares.  I was becoming disgruntled even on Delta, where I had five million-plus miles and had been designated “Lifetime Platinum” elite.  But Platinum meant next to nothing by then, nor did my Lifetime Gold on American.  No matter how I tried, in most years I could hit all kinds of high mileage plateaus, but never spent quite enough dollars on fares to break through to higher elite levels.

During the same period, mileages required for coveted international premium cabin seats skyrocketed on every airline.  The mileage inflation impacted domestic flight awards, too, as did the tedious capacity controls on award seats.  At one point, Delta wanted 960,000 SkyMiles for a single round trip business class seat to Johannesburg.  Readily acknowledging that JNB is more distant than London, nearly a million miles for a ticket to anywhere is an astonishing number, especially compared to paying 25,000 miles to London on TWA in first class in 1984. Heck, I was having trouble even getting coach award seats RDU to Billings, Montana.

Then came the 2008-2010 recession and another big downturn in air travel, especially business travel.  In its aftermath, the airlines retooled their frequent flyer schemes again.  Award charts, a hallmark since the beginning, disappeared from websites.  Award mileages became dynamic, mysterious, based on algorithms benefiting only the carriers, not the members. 

The black magic lack of transparency further dampened my enthusiasm to dash after miles and points.  But I kept on doing it, like a meth addict who can’t stop tweaking.  I even signed up for a couple of new points/mileage-based credit cards to get the spending threshold bonuses that came with the offers.  I made every one, too, and saw those thousands of miles enrich my accounts at one airline or another.

But I felt a nagging question in the back of my mind:  Were all those points and miles worth it, especially given how expensive, not to mention elusive, airline awards had become?

Ditto for the hotel programs, which though I haven’t mentioned until now, went through the same early boom and later steep devaluation.  After being a Hilton Diamond VIP member for years, for example, I mostly stopped paying attention to those increasingly useless points even before the 2009 Great Recession.

I remember looking in my wallet late in 2019 and thinking that I should be using my Discover Card more because it gave me a simple refund on what I spent.  Otherwise, my credit cards were all based on points and miles:  American Express Platinum (Membership Miles), Delta SkyMiles Amex, two different AAdvantage-based MasterCards, a Wells Fargo MasterCard with its point counting system, and a Chase Visa that was racking up points.

Following every single previous economic slowdown since 1981, travel came back quickly, and my loyalty—obsession, really—to the frequent flyer programs did not wane or change.  Now, however, the Covid-19 plague has shut down everything, making air travel impossible for the better part of a year, and I feel like I may be waking up.  These loyalty programs don’t seem to have the hold on me they did even early this year. 

I question now the value of running after those rabbits. As a good friend and travel expert reminded me today, my growing angst with the programs is no minor conclusion and no minor matter. I have a lot to ponder and research to do.  I’ve awakened now from my forty-year torpor and am questioning my addiction to the loyalty program paradigm. As I discover what options are out there and compare those to what I’m doing now, I will share my thoughts.

2 thoughts on “Paradigm lost

  1. Frequent flyer programs were designed to:
    1. Fill seats – as not all planes fly full, so during down periods more awards become available.
    2. Create a loyalty program to encourage more business. (again, long term fill seats)
    3. Increase travel, because the more you travel with our without points, the more money they make.

    If your goal is aligned with theirs, and are willing to go against the grain and be flexible – sometimes you can get amazing deals. Most people do not though, and the airlines clearly know math.

    Before COVID, we saw massive devaluations. Now that COVID has happened, we have seen massive loans against their award programs. Right now, the planes are not flying full so devaluation is not happening. Once things recover – they clearly will devalue at a record pace. That could be a couple of years..

    I try to keep my points in transferable cards. If I see something good, I can transfer and buy. If not, I can redeem on gift cards to many retailers that I already shop at.

    Long term, the bigger question is when people do more ACH/Debit or similar transactions and the larger issues can’t charge a 2-4% on each transaction – won’t all of this end anyway?

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