If you only listen to the major media outlets, you could easily come to the conclusion that searching for frequent flyer award seats is like looking for a needle in a haystack, especially if you are planning to travel during peak travel times to popular destinations. “Frequent Flyer Miles Becoming Harder to Use” and “Easy to Earn, Hard to Redeem” are just a couple of headlines highlighting the widespread belief that awards these days are scarce. It is true that airlines have reduced capacity and cut flights in response to the current decrease in air travel demand and with fewer planes in the air, there are fewer seats for paying customers and frequent flyers wanting to redeem their miles. Despite the cutbacks, are the airlines becoming stingier with award tickets? And is this perceived lack of award seats based on fact or fiction?
According to a recent WebFlyer poll, 63 percent of frequent flyers think awards are more difficult to find now than they were one year ago. And reporters tend to agree with this perception. TODAY travel editor Peter Greenberg writes, “For consumers, even though we are addicted to these programs, it’s becoming tough, and in some cases impossible, to redeem the miles.” The New York Times reported, “Travelers have long complained about the difficulty of booking frequent flyer tickets, but now it’s becoming even harder.” Despite the doom and gloom reports of dwindling award seats, 15 percent of our survey respondents believe that award availability has improved in the past year and 22 percent think availability has remained the same. Before we take a look at how our research compares with the perceptions of frequent flyers and their individual experiences, we’ll delve into what the airlines themselves have to say about flight awards.
Every year the U.S. Securities and Exchange requires public companies with more than $10 million assets to file a 10-K report. This comprehensive report includes financial information and in the case of the airlines, information about frequent flyer programs. The airlines aren’t required to publish information on exactly how many seats are designated as award seats on each flight but they will often report the percentage of seats that were filled by passengers flying on awards.
To prevent any confusion, United explains in its report, “These amounts represent the number of awards for which travel was provided and not the number of available seats that were allocated to award travel.” Because airlines frequently release seats for award travel close to the travel date when it looks like seats are going to remain unsold, the airlines themselves don’t always have a specific number of seats allocated for awards ahead of time. But many airlines include the percentage of passengers who flew on award tickets in their 10-K reports and you may be surprised at the total percentage of frequent flyers who were flying for free last year.
American Airlines reported the AAdvantage program had around 62 million members who collectively harbored 607 billion award miles as of Dec. 31, 2008–a six billion mile decrease from the 613 billion outstanding miles in members’ accounts at the end of 2007.
AAdvantage issued approximately 196 billion miles last year, half of which were sold to partners, such as credit cards, hotels, car rental companies and other companies. Of special interest for this article, the airline issued a half a million more free travel awards in 2008 versus the previous year, which is a 19.2 percent increase in the number of awards given out.
In 2008, 3.1 million awards were used for travel on American and American Eagle flights, which represented approximately 9.7 percent of the total number of passengers flown. In the 27-year history of frequent flyer programs, this is the highest total number of flight awards given by any major airline, which doesn’t seem to jive with the pundits who seem to believe there are fewer awards being issued.
Almost one out of every 10 passengers traveling with American last year was flying on an award ticket–and this number does not include all of the awards redeemed by AAdvantage members for award flights on partner airlines or upgrade awards. In 2007, the airline issued 2.6 million flight awards for travel on American and American Eagle in 2007, which represented around 7.5 percent of passengers.
Continental Airlines issued 1.6 million awards to OnePass members in 2008, which represented around 8.5 percent of passengers and the airline estimated that members were holding enough miles to redeem 2.4 million free travel awards. While there were fewer award ticket passengers flying on Continental planes compared to American, the percentage is still quite high.
Continental gave away 100,000 more awards last year than the year before. Between the months of January and July, redemptions on Continental were up 20.9 percent but there was a real slowdown in the fall and Continental ended the year by giving away only 6.6 percent more awards than the previous year. The airline issued approximately 1.5 million awards in 2007, which represented around 7.2 percent of passengers.
Members of United Airlines Mileage Plus program also redeemed 100,000 more awards in 2008 compared to 2007. In 2008, 2.3 million awards were redeemed for travel on United Airlines compared to 2.2 million in 2007. These awards represented 9.1 percent of United’s total revenue passenger miles in 2008 and 8.0 percent in 2007.
United also mentions in its 10-K report that Mileage Plus members redeemed an additional 613,000 non-United awards last year, such as Red Carpet Club memberships, car and hotel awards, merchandise and travel on partner airlines. This number is only 66 percent of the 928,000 non-United awards redeemed the year before, which is probably largely due to their participation and then backing out of the Star Alliance upgrade program. Upgrades on Star Alliance partners is a huge deal. That and the fact that they caught a large number of members off guard when they expired a lot of miles that normally might have gone toward magazine redemptions and other types of awards.
An interesting side note–remember when all the airlines revised their mileage expiration policies? At the end of 2008, Mileage Plus members had a total of 478.2 billion miles in their accounts and United estimates that 116 billion of these miles will go unredeemed. United shortened its expiration policy from 36 months to 18 months on Dec. 31, 2007. Because of this change, United was able to record revenue of $246 million from the additional miles that expired and revised the number of miles the airline expects members to redeem in the future from 85 percent to 76 percent. The shortened policies may have been bad news for unprepared members, but certainly helped out the airlines’ balance sheets.
US Airways Dividend Miles members have enough miles in their accounts to redeem 2.6 million awards and in 2008, approximately 0.9 million awards were redeemed for travel, representing around four percent of revenue passengers and is identical to the number of awards US Airways reported members redeemed in 2007.At first glance, the redemption statistics for US Airways in 2008 is troubling. In a year when all other programs showed healthy increases in handing out awards, Dividend Miles matched the number of awards they gave away in 2007 and even more reason for concern was the fact that only four percent of their passengers were flying on an award ticket. But as we said–at first glance. The fact is that US Airways led the industry in percentage of passengers flying on award tickets in 2005 when 9.1 percent of their passengers were on award tickets, a result no doubt caused by their shaky financial future at the time and members seeking to cash out before an assumed bankruptcy of the airline occurred.
Historically, US Airways typically is in synch with other leisure oriented frequent flyer programs such as Frontier and Southwest but the past two years they have fallen behind in the annual number of awards redeemed and now have among the lowest percentage of passengers flying on award travel–a trend that either represents that members cashed out big time during the airline’s tougher days and no longer have the miles to redeem or that the airline is putting more restrictions on their available inventory for awards. Their struggle has also been defined by the lack of seamless awards with domestic partner United Airlines in the past year. And in the future, their struggle may be defined even more if they aren’t included in any reciprocal partnerships with new Star Alliance member Continental Airlines (to join October 25, 2009).
Of the low-cost carriers, JetBlue and Southwest published award statistics in their annual 10-K reports. As of Dec. 31, 2008, JetBlue’s almost seven million TrueBlue members had approximately 196,000 awards in their accounts (including an estimate for partially earned awards) and JetBlue issued 297,000 awards in 2008, representing around four percent of passengers and a 37 percent increase in awards compared to 2007. The airline issued 80,000 fewer awards in the previous year–TrueBlue members redeemed 217,000 awards in 2007, around three percent of passengers.
Members of Southwest Airlines Rapid Rewards redeemed as many awards in 2008 as they did in 2007. Approximately 2.8 million award tickets were redeemed in both years, which represents 6.4 percent of the total number of revenue passengers carried in 2008 and 6.2 percent in 2007. While the number of people flying on award tickets in 2007 and 2008 was the same, the percentage was higher because fewer people flew last year compared to the year before.
At the end of 2008, Rapid Rewards members had approximately 10.4 million fully and partially earned award tickets (78 percent were partially earned tickets). Interestingly, Southwest Airlines reports that since the beginning of the loyalty program in 1987, around 16 percent of all fully earned award tickets have expired without being used. If you are ever in the position of being unable to use an earned Rapid Rewards award ticket before it expires 12 months from when it was issued, you can pay a $50 fee up to two years after the award has expired and the award will be valid for another full year after it is renewed, which means members actually have four years from when an award ticket is issued to use it. And awards are fully transferable to family and friends–so there’s really no excuse to let those awards go unused.
Based on these statistics, the airlines clearly are issuing award tickets and a few airlines gave out even more awards in 2008 compared to 2007. We recently conducted our own research to see how difficult it really is to book award tickets these days. We researched award availability for coach and business class saver awards with the big six airlines on eight popular domestic and international routes. We enlisted the help of our in-house seasoned award travel planner, Nicki, who has booked award travel for hundreds of frequent flyers over 10 years. And while she may not like this analogy, if there’s an award seat out there, we can rely on her skills to find it as surely as a pig sniffing out its beloved truffles.
To cover all the bases, we looked for award tickets one week, one month, three months, six months and 11 months out both online and by calling customer service. Our three-month search included dates near the end of May when travel is starting to pick up for the summer months and our six-month search put us in the middle of August when summer travel is in full swing and one of the busiest travel seasons of the year. This is by no means a carefully conducted scientific research, but we feel that it is a reliable indication of the success of getting award seats through the Internet or phone.
According to the results of this month’s AirPoll, 80 percent of respondents choose to book their award tickets online. Booking online is convenient and saves time and money, since most airlines charge a $20-$25 fee to book award tickets over the phone.
When we tried booking awards online, we were able to find two coach saver awards on United Airlines an impressive 95 percent of the time. The only route we weren’t able to find award tickets on was for travel between Los Angeles and Hong Kong.
Northwest Airlines came in second with an 88 percent success rate followed by American Airlines at 80 percent and Delta Air Lines at 73 percent. We could only find coach saver awards on Continental 55 percent of the time when searching online and with US Airways, our success rate was a dismal 25 percent. As we mentioned above, only four percent of US Airways passengers flew on award tickets last year, compared to 9.7 percent on American Airlines and our research similarly shows that American is giving away more award seats than US Airways.
Finding a business class saver award seat was more difficult, but on average, we could still find a seat in the front of the plane over 50 percent of the time. American Airlines came in first and we were able to find two business class seats 78 percent of the time.
Delta, Northwest and United all tied for third with a 75 percent success rate and Continental Airlines and US Airways trailed behind the other airlines at 60 percent and 30 percent, respectively.
While the airlines have improved the online booking process by adding award calendars and some partner inventory, not all partner airlines are included in online award inventory, which means members will sometimes need to call to book awards for itineraries that include partner airlines.
Our success rate increased across the board when we called reservations to book awards, although not by a huge margin. We had the highest success rate again with United Airlines at 95 percent when we were looking for two coach award seats, followed by Northwest at 90 percent and American at 85 percent.
Delta wasn’t too far behind at 75 percent with Continental lagging behind at 60 percent. We witnessed the most dramatic increase with US Airways, going from a 25 percent online success rate to 60 percent when booking awards over the phone–if you’re a Dividend Miles member, take note–and pick up the phone the next time you want an award ticket.
When searching for business class awards, American Airlines came in first place again at 87.5 percent with United Airlines close behind at 80 percent. Delta and Northwest again tied for third at 75 percent. Continental occupied the second to last spot again at 67.5 percent with US Airways trailing behind once again at 62.5 percent.
Award Availability Now vs. Before
When we last conducted similar research roughly two years ago (2006), we were able to find the award seats we were looking for 82 percent of the time and two years before that, we were successful 77 percent of the time.
Our overall success rate this year was 78 percent and we were able to find two coach saver awards on all the airlines combined 186 times out of a total of 240 tries.
Certain city pairs are notoriously difficult for finding award seats and if we based award availability only on a flight between Los Angeles to Hong Kong, our ability to find awards would dip to 40 percent, a number that would certainly support media reports of diminishing awards, but doesn’t accurately reflect the actual number of awards available.
Award Search Chart
To broaden the scope of our award search, we decided to look at how many awards we were able to find through our monthly award searches during 2008. Each month, we research the availability of awards for a city pair and publish the results in our Award Search chart. We looked at all of our award searches for last year and our overall success rate was consistent with what we found when researching award availability for upcoming dates for 2009. Out of 360 searches over the phone, we found awards 270 times, or 75 percent of the time. Our success rate for online bookings dropped to 60 percent, probably due to the lack of partner inventory online.
United Airlines was again the overall winner when booking through their call center. We were able to find awards either on United or one of United’s partner airlines 83 percent of the time, followed by US Airways at 82 percent, American Airlines at 76 percent, Delta at 73 percent, Continental at 66 percent and Northwest at 63 percent. US Airways fared much better in our monthly research, which could be because of the randomly selected city pairs we chose to research.
Before you switch your loyalty to United, keep in mind that United Airlines has been in the news because it filters award seats on Star Alliance member carriers, which means that even if a partner such as Lufthansa has open award seats available for booking, you may not be able to book them with your Mileage Plus miles. In a Washington Times article published last fall, United spokesman Jeff Kovick is quoted as saying, “We manage award availability on our Star Alliance partners just as we do with United’s own saver awards.”
If your primary redemption goal is to redeem miles for flight awards on Star Alliance member carriers, you may want to consider earning miles with US Airways or Continental Airlines, which is switching its allegiance to Star Alliance from SkyTeam later this year.
For online bookings, Delta came in first at 72 percent, followed by American at 65 percent, Continental at 62 percent, Northwest and United at 60 percent and US Airways at 40 percent. Although Delta SkyMiles aren’t the easiest currency to redeem, the airline does include many of their partners in their online search engine, allowing members to avoid the phone booking fee. However, Delta charges a $25 fee for bookings that include a partner airline, which makes a fee for partner awards unavoidable.
Survey vs. Reality
We conducted an informal survey of frequent flyers and asked them a few questions about award tickets. One of the questions we asked was which airline offers the best chance for award redemption for their first choice of dates. Based on the results of our survey, 41.8 percent of respondents felt that American Airlines offered the best chance for award seats, followed by Delta at 24.1 percent, Continental Airlines at 22.8 percent, United Airlines at 20.3 percent, Northwest Airlines at 13.9 percent and US Airways at 5.1 percent. Based on these numbers, it looks like United is not getting the reputation it deserves, after all, it has come in first at giving out awards in our research while coming in at fourth in the eyes of the travelers.
While American Airlines has a very good reputation for offering award seats to members, it came in number three based on our monthly Award Search charts and our research for this article when we searched for coach awards. For business seat awards, however, it came in first place. And for numbers of awards alone, no airline beats American AAdvantage.
We also asked members to rate their last flight award redemption. The majority of respondents did not have much difficulty booking an award, with 51.8 percent saying it was easy and 32.9 percent thinking it was a minor hassle. A few members found the experience frustrating, 10.6 percent said it was a major hassle and 4.7 percent thought it was downright depressing.
The hotel programs rarely receive media attention about members experiencing difficulty redeeming points for award nights and 66.7 percent confirmed they rarely, if ever, have any problems redeeming points. Only 7.4 percent of those surveyed said they have had problems with redeeming points for free stays through hotel programs. In fact, Hilton HHonors redemptions remain at an all time high. Since 2005, Hilton HHonors redemptions have grown by more than 20 percent year over year, and in 2008, the program experienced a 25 percent increase in redemptions compared to the previous year.
Finding an Award
At the end of the day, our research and number crunching won’t help you if you aren’t able to book the awards you want when you want. And we aren’t saying that finding award seats is easy–our goal was to call the airlines and look online to determine whether awards are vanishing like the doomsayers report. Based on our research, we conclude that awards are still out there. To help you find them, we’ve compiled a list of tips in the sidebar “Getting Your Just Rewards”.