A Peek into Award Redemption

A Peek into Award Redemption

We researched Los Angeles to Hong Kong and only found 24 pairs of awards in 120 tries. But we did achieve a success rate of nearly 82 percent with all other award redemption efforts. Looking at the exact same research from two years ago, we found some improvements. We also found one program that has a major crisis on its hands, if we were to believe the actual results of our research — and we do. We’re left wondering why no one else other than Consumer Reports and InsideFlyer ever bothers to conduct any research in this area (as we do monthly). When will some program do a better job at meeting the expectations of its members?

One hot summer’s day a fox was strolling through an orchard till he came to a bunch of grapes just ripening on a vine which had been trained over a lofty branch. “Just the things to quench my thirst,” quoth he. Drawing back a few paces, he took a run and a jump, and just missed the bunch. Turning round again with a One, Two, Three, he jumped up, but with no greater success. Again and again he tried after the tempting morsel, but at last had to give it up, and walked away with his nose in the air, saying: “I am sure they are sour.” -Aesop

Sour grapes? Is that what award travel has become?

It sure seems that way. A recent WebFlyer poll of frequent flyers found that nine out of 10 feel that award seats are scarcer today than they were just two years ago.

And the media is having a field day “exposing” the difficulty of redeeming your miles.

“These plans have flown off course,” reads one report. “Consumers are steamed about hard-to-use miles,” blares another.

At the same time, though, airlines are shelling out free seats in record numbers. In 2005, U.S. carriers handed over almost 16 million awards to frequent flyers — a 10.6 percent jump from the previous year. This number is only comparing corporate 10-Ks year-to-year. The actual number of awards issued by U.S. carriers was closer to 24 million awards issued since a growing number of awards come from partner participation not listed in these annual corporate reports. American AAdvantage had nearly 45 percent more awards redeemed on their partners than on American Airlines.

And that’s a troubling scenario since consistently on FlyerTalk.com members report having little or no problems getting the awards they want. There certainly are members who report “never getting anything,” but it’s no where near the 87.9 percent who say that awards are more difficult to get than two years ago.

Perhaps Buffalo Springfield put it best: “There’s something happening here; what it is ain’t exactly clear.”

There is absolutely no evidence that airlines have cut back on their award inventories. But there’s plenty to suggest that the demand for those inventories has grown. For one thing, there are more ways to earn miles than ever before. In fact, flying ceased to be the primary means of earning miles two years ago, when credit card miles took the lead. And while that has throttled back a bit, these plastic miles continue to reign supreme.

Those miles, after all, are a cash cow to financially strapped airlines. They sell their miles to hotels, restaurants, car-rental companies and credit card providers, and those companies in turn pass along the miles to customers. Those sold miles bring in nearly $4 billion a year.

But while airlines are doling out miles hand over fist, they’re also cutting back on fleet size and routes. Delta, for example, has taken almost 8 million seats out of its domestic network since last summer, a 25 percent decline. But as we’ve often pointed out, this really has not contributed to problems with award redemption in a major way, since Delta did add major domestic airline partners. The facts indicate that SkyMiles members have seen more than a 210 percent increase in total award seats than in 2000 and actually led all airlines in redemption numbers last year.

And then there is that oft-forgotten fact that members compete for seats with paying passengers. With travel at all time records for capacity and load factor, some of the frustration today is simply related to the fact that any seat is available, whether the currency is miles or money.

In essence, the percentage of the pie dished out to frequent flyers hasn’t changed — if anything, it’s grown slightly. But the pie itself has gotten smaller. And there are more hungry diners in the kitchen.

Two years ago InsideFlyer released a study indicating that frequent flyers of the six legacy carriers — American, Continental, Delta, Northwest, United and US Airways — actually enjoyed a 77 percent success rate in booking “saver” award travel.

We tried to book two coach-class seats between each of seven randomly selected city pairs. Then we tried to book two business-class awards on an international route. We tried both online and through call centers, to see what differences, if any, there would be in available inventory.

To mix things up, we even checked our chances one week out, one month out, three months out, six months out, and 11 months out.

At the time, our overall success rate was about 77 percent. Delta SkyMiles came out on top, with a full 85.4 percent rate of success, and Continental OnePass crept in last, at only 54 percent.

Business-class seats were indeed rare. Together, the six programs could only find available awards 54 percent of the time. (It should be noted that American AAdvantage bucked the trend, racking up a whopping 92-percent success rate.)

We also found that despite some programs’ claims to the contrary, your chances of getting the seat you want do in fact increase when you speak to real person, instead of booking online.

But that was then. This is now.

With 88 percent of you sensing that awards are more difficult to find now than they were in 2004, we decided to try our little experiment again.

And things have gotten better, not worse.

That’s right. The overall success rate for all programs combined actually rose from 77 percent to 82 percent. We got the saver seats we wanted 172 out of 210 times. Availability on Continental OnePass and Delta SkyMiles jumped 3 percent, and on US Airways, a full 11 percent. The other programs dropped just slightly, or held steady at the same rate as before.

But the picture isn’t all rosy. Business-class awards on the international route dropped precipitously. Continental, United and US Airways weren’t able to find even one. Only Northwest WorldPerks was even remotely respectable, with a 60-percent success rate. At least Continental stayed consistent — we could not find business class awards on this same route two years ago. The real disappointment was with United. Two years ago our research showed an ability to get this award 60 percent of the time, this time, not a single award was available. And American was not much better moving from a 60 percent availability to only a single award date available this year — 10 percent.

One trend remained the same — members continue to have a slightly better success rate through the call center than online. Only Continental OnePass showed the same availability in both situations.

Curiously, US Airways Dividend Miles showed a huge discrepancy between online and call center efficiency. In that case, we had an 82.76 percent better chance of getting a seat through the call center than we did online. This was probably due to two factors. First, almost all the successful bookings were on partner airlines. Dividend Miles simply may not list partner availability on its online engine. Few programs do. Secondly, the merger of US Airways with America West has led to not a few computer issues. As Elise Eberwein, spokeswoman for US Airways, told The Washington Post: “We got slammed. We have a long way to go, and we’ll get there. We have to establish ourselves as a customer-relations center that not only apologizes when things go wrong but also works hard to convince customers to give us another try.”

On a side note, while we applaud the apparent efficiency of the US Airways call center, we highly recommend that they be given a crash course in geography. Honolulu is in Hawaii. And Hawaii is a U.S. state.

To view a graphical representation of what we found, have a look at the following charts:


The results are indeed surprising in the face of mounting dissatisfaction among members. But we didn’t cheat. We didn’t use any gimmicks or tricks, and we didn’t pull rank. The numbers are what they are. Of course, we also looked for over 210 awards. That type of breadth is bound to yield a generally positive result. Were we just Joe Average, looking desperately for, say, a business-class award on United from Los Angeles to Hong Kong, we’d join the critical chorus.

Two years ago when we produced our original research, we were encouraged to see that Consumer Reports followed a few months later with their own independent research, showing (within a few percentage points), the same results as we found. While we’d like them to confirm any new research, we’ve always been amazed that most if not all the general media, and even some of the specialists, continue to write of award redemption woes based upon no actual research. We find that this research can actually help our readers determine how their programs stack up — and as we all know, maybe it’s time to change programs from time-to-time if you continue to have problems using your miles.

It’s all a matter of perspective. Are there too many miles being earned by non-travel means? Maybe. But the mileage inflation argument is much less of a problem than some might imagine. Sure, miles are being added to overall circulation in vast quantities, but that isn’t necessarily resulting in far greater numbers of people with high account balances. After all, the folks attracted to these offers are generally already frequent travelers. Ground-bound Jane isn’t going to pick up a miles-earning pork gift basket online and suddenly transform into a wild-eyed mileage junkie.

And if credit cards are generating too many miles, what’s the alternative? You would be hard-pressed to find many frequent travelers in favor of ending these favorable financial relationships. Keep in mind that selling miles keeps programs and carriers in business.

The question then becomes: What can you do about it?

For starters, though it probably need not be said, plan ahead. The further in advance you make your plans, the more likely a seat will be available. And check out our results: Often, seats that weren’t available 11 months out will open up at about three months out.

Check new routes. New routes offer a unique opportunity to award travelers — since they’re new, there is very little chance that the allocated award seats have been used.

Understand the big picture — the 25,000-mile domestic award is not the norm. It is a sales gimmick, and it comes with restrictions. The standard award — generally 40,000 miles — is, and always has been, exactly that: standard.

And if Europe is your destination, try breaking the natural connection the booking engine will give you and see if any seats are available on the morning flights that a growing number of airlines are introducing. While it will often require an overnight in New York or other East Coast departure city, it sure beats the bottleneck that occurs now when everyone tries to connect on the evening flights, especially those living west of the East Coast.

If you have the miles, there really is no reason to think you can’t go anywhere you please. Time and time again, our research confirms that the awards are out there. Use some strategy, and remember that one bad experience does not an industry indict. You may not get the grapes you were jumping for, but hey! What about those berries a little further down?

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