Last week Peter and Terry Maxon talked about American Airlines’ budget crisis. With whispers of bankruptcy, consumers are wondering if their frequent flyer miles are at risk. The Travel Detective takes to his blog to examine the future of American’s AAdvantage Miles and all miles programs.
American Airlines has had horrendous quarterly results the last couple of years at a time when every other airline is making a profit. But, historically American Airlines holds the record as the only legacy airline never to file bankruptcy. The argument could be made that the airline was never able to take advantage of the bankruptcy laws to get rid of debt. American Airlines is just negotiating some union deals now, and when that happens, watch their stock go up and things turn around. I have total faith in that airline.
American Airlines’ AAdvantage Miles are a whole other story. Earning miles is easy. You could earn frequent flyer miles for everything short of breathing. Redeeming miles is a lot harder.
Airlines are filling 87 percent of their seats, that’s eight out of every 10 seats. Now the law of supply and demand takes over and there is no incentive whatsoever for the airline to redeem frequent flyer miles. For the airlines to fill those seats with a miles ticket, in many cases, would be for them to displace revenue passengers.
Airlines have created a monster here where there are more than 17 trillion unredeemed miles out there that may never be redeemed. We all like to boast how many miles we have, and everybody knows how many miles I fly, but I’m on the same boat as everyone else. Gaining and earning miles means nothing if you can’t redeem them.
Fliers should use their miles as soon as possible. The worth of those miles is only going to be devalued on a continuing bases as the airlines change the eligibility rules since they don’t want to give away the miles.
Many people were induced to join this program based on an advertisement that said, when you got to 25,000 miles you got a free ticket. Guess what happened when they got to 25,000 miles? Suddenly the airline would say, “oh sorry we don’t have any seats at 25,000, we have seats at 50,000,” if they want to give them to you. That’s extortion and yet no one gets busted for it because the airlines are protected under the deregulation rule of the federal government.
Remember if you’re sitting on a lot of miles, you gain nothing and you’re earning no interest. Airlines are trying to get you to redeem miles by getting magazine subscriptions. Oh my God, if you do the math you just spent $8,000 for a Reader’s Digest.
I’m angry. Stop what you are doing right now. Run don’t walk, and find a flight you can take anywhere. Just go. Otherwise, you might as well just buy a picture frame and hang your miles on the wall.
Are you having trouble redeeming your airline miles? Are you as angry as Peter? Share your stories in the comments.
For more information, check out:
- Ask Peter: Redeeming Airline Miles, Codeshare Vs. Alliance
- The Milage & Reward Programs Category
- The Travel Detective Blog Archives
- Peter’s interview with Terry Maxon
By Peter Greenberg for Peter Greenberg Worldwide Radio