Strategy key to frequent-flyer game
By Marnie Hunter
CNN
(CNN) -- The tense climate in the airline industry has some frequent flyers on the edge of their seats.
The financial struggles of the big carriers, discounted fares from low-cost airlines and complaints about the availability of award seats have some travelers questioning the value of their miles.
"I think it's pretty much inarguable that the value of frequent-flyer miles is on the decline," said Tim Winship, publisher of FrequentFlier.com.
As discount carriers force down the average price of airline tickets, the value of each mile traded in to secure an award ticket drops as well, according to Winship.
"The value of a frequent-flyer ticket at the end of the day depends on the value of a revenue ticket that you might have bought had you not used your miles," Winship said.
When a traveler's route overlaps with those served by low-cost airlines, it may be foolish to use frequent-flyer miles for anything less than a first-class ticket, according to Randy Petersen, founder of InsideFlyer magazine and WebFlyer.com.
Award tickets to destinations where low-cost carriers don't compete, such as Europe or Hawaii, also are a great value for the miles, he said.
'Saver' seats
Difficulty obtaining award seats to specific destinations on specific dates also drives down the value of miles, Winship said.
On most airlines, the restricted, or "saver," award on a domestic flight requires 25,000 miles, but the seat capacity is tightly controlled. Unrestricted award seats on the same route for double the miles are much easier to secure.
"A lot of consumers use the term 'bait and switch' when they hear this," Winship said.
But Joe Brancatelli, editor and publisher of a site for business travelers called JoeSentMe.com, sees no problem with a traveler using twice the miles to get the flight, destination, day and time they want. If flyers are earning miles responsibly, the miles are a free perk, he said.
"No one should ever be doing anything goofy to get a mile," Brancatelli said. "[Flyers] shouldn't be charging on an airline credit card that's charging them 14 or 15 percent interest, or 20 percent interest, because you can never win that game."
Flexibility is key to getting tickets for the fewest number of miles.
Travelers have the best chance of getting restricted awards if they travel on Tuesday, Wednesday or Thursday, according to Petersen. Using awards on Saturday is the toughest time because of the competition for the restricted seats.
Sometimes getting a restricted seat just is not possible.
"It doesn't matter how many days you call in advance, you are never getting a free seat to Orlando on President's Day weekend at the restricted level," Brancatelli said.
Struggling airlines
While having a hard time getting an award seat can be frustrating, many flyers are more concerned about whether their miles will even be around when they're ready to travel.
With United and US Airways in bankruptcy and Delta struggling to avoid the same fate, travelers are nervous that their miles will disappear before they have the chance to cash in for a free getaway.
While it may be time for passengers to reassess their choice of frequent-flyer programs, unloading miles in a panic is ill-advised, Petersen said.
"Despite the natural instinct to go and burn your miles, I don't think that's very good advice at all," he said.
Industry experts see US Airways' situation as the most dire among the struggling airlines. Petersen suggests US Airways flyers set up a frequent-flyer account with partner United Airlines. While United also is in bankruptcy, Petersen doesn't see the airline in any danger of liquidation over the next six months to a year.
With a United account, passengers will build up miles in a program with less risk, while retaining the ability to redeem the miles later for US Airways awards, if the outlook improves in the coming months.
In terms of redeeming existing miles for US Airways tickets, Petersen doesn't see a problem with that strategy through the end of the year. Cashing in miles for tickets on a partner airline up to eight months out is also a way to safeguard accumulated miles.
Switching to a credit card that accrues miles with an airline with less imminent risk is also a good idea, Petersen said.
While travelers have the option of converting miles to another airline through a Web site called Points.com, Petersen doesn't recommend this tactic until an airline is on its last leg because flyers lose nearly 70 percent of the original miles in the conversion.
Resisting the urge to stockpile
Whether a frequent flyer's airline is in dire straits or not, many travel experts advise against stockpiling miles.
Brancatelli encourages travelers to keep enough miles around for emergency tickets at the unrestricted level -- whether it's to visit a sick friend or parent, or just to get away to maintain equilibrium. The rest of a frequent flyer's miles should be used, he said.
He points out that frequent-flyer accounts are not insured like financial accounts, so storing up miles for use far into the future, perhaps into retirement, is a foolish proposition. "Half the airlines won't be there," he said.
Winship also discourages hoarding miles.
"If you believe, as I do ..., that the value of miles is indeed on the decline, then it really follows that you're better off redeeming them sooner rather than later," he said.
