Demystifying reward travel for "Traditional Miles" American, Delta, United, and Alaska Airlines

Last month, the Wall Street Journal ran an article, The Best and Worst Frequent-Flier Rewards Programs for 2016, under the leader "Southwest Airlines again outperforms larger competitors in a survey of 25 carriers, while American Airlines sees a big drop" (warning, you will need a paid WSJ account to read it). The article alludes, but does not address in depth, that frequent-flier rewards programs generally fall into one of two categories, each suited to a different type of traveler. We'll call them "Traditional Miles" schemes common among the big legacy carriers (i.e. American, Delta, United), and "Points for Dollars" schemes common with carriers such as Southwest and jetBlue. Knowing which to favor based on the type of traveler you are will help you get the most from your airline rewards, and actually use them faster!

Consider this the next in our series helping you to be a smarter traveler, the kind that chooses tickets on airlines so as to maximize your enjoyment of the journey and the rewards you get back from it. Check out How (and why) to choose your preferred airline, and Best one for you: Breaking down the strengths and weaknesses of America's largest airlines to get caught up!

Traditional Miles (+Perks)

In today's post we're tackling the Traditional Miles (+Perks) model that makes the American, Delta, United, and Alaska Airlines particularly attractive for very frequent travelers, but perhaps less enticing for more casual leisure travelers. We'll take on the Points for Dollars model in a future post.

Traditional Miles (+Perks)... which airlines offer it?

Big legacy carriers such as American, Delta, United, and also Alaska Airlines.

Who is it good for?

Membership for the traveler at the base (i.e. few if any perks) level is free. Traditional Miles rewards schemes are particularly good for travelers who fly frequently enough (at least 30 flights per year) to reach elite status and become eligible for certain perks. Their generally steep threshold of miles needed to book even a single trip make them much less attractive for infrequent leisure travelers who fly so seldom as to take a very long time to accrue enough miles for a free ticket, and who don't fly enough in a single year to even get a whiff of those perks. Such travelers should look into the less complicated "Points for Dollars" programs offered by Southwest and jetBlue (to be discussed in a future post).

The concept of revenue based earning further complicates the process of accessing special perks by earning elite status. In a nutshell, on United and Delta (and on American beginning in 2017), it isn't enough to simply fly a certain number of flights (called segments) or miles per year in order to earn elite status. One must also spend a certain amount of dollars in order to qualify. In other words, reaching United MileagePlus Premier Silver status (for example) either fly 25,000 miles in a year and spend $3,000 on tickets, or that you fly 30 segments in a year and spend $3,000 on tickets. The thresholds are generally consistent across the big three legacy carriers, so in essence it means that travelers who aren't going to travel either 25,000 miles or 30 segments in a single year -- and spend $3,000 doing it -- have absolutely no shot at ever earning perks through elite status.

How does it (generally) work?

You earn "miles" every time you fly. In the old days, the number of miles earned was about equal to the number of miles flown, i.e. if there are 345 miles between your origin and destination airports, well then you earn 345 miles. Nowadays the airlines have complicated this with a "revenue based" model, meaning that the number of miles you earn is multiplied generally in the traveler's favor if the ticket is booked at full price or above (i.e. refundable or business class) and multiplied sometimes not in your favor if you've bought a discounted ticket. As if this wasn't complicated enough, some more frequent travelers get special little multipliers on their tickets. For example, as an American Airlines "Platinum" member, I earn a minimum of 500 miles per flight (even if my flight actually traveled less than 500 miles), and I get a 100% mileage bonus each flight, all meaning that I can take a 300 mile flight which gets bumped up to 500 miles and then multiplied by 100% to equal a net of 1000 miles credit in my account. Confused? So are we!

How do you redeem miles for free travel?

Regardless of how you get your miles, or what the math is on how many you're earning, ultimately your accrued miles get deposited to your account for that specific airline's rewards program. From there you can redeem miles for plane tickets in accordance with what airlines call their "award chart". For example, a coach ticket whose origin and destination is in the Continental United States will run you 12,500 to 20,000 miles one way and 25,000 to 40,000 miles round trip. That same trip on United will run you 10,000 to 25,000 miles one way and 20,000 to 50,000 round trip. Be warned, though, that using miles for short domestic trips is one of the worst bangs for your buck in travel. For example, a round trip ticket from Washington DC to Boston selling for $149 is going to the same number of miles as a round trip ticket from Boston to San Francisco selling for $500. Spend your hard earned miles in a way that maximizes their value!

The biggest bang for the buck on redeeming miles for travel, though, is to use them for first and business class tickets, particularly when traveling internationally. Imagine you want to travel on American Airlines from the contiguous 48 states to Europe. That flight in the "main cabin" is going to run you anywhere from 30,000 to 65,000 miles one way. That same flight in first class will set you back 57,500 to 135,000 miles, despite the first class ticket costing perhaps 10 times more than the main cabin variety. Put another way, it's possible to go from coach to first for less than twice the number of miles, even though the ticket would have cost 5 to 10 times more if purchased with cash.

It's entirely possible that you don't care about flying first class, that you don't have enough miles to do it anyway, or that you'd rather use your miles to take more trips in economy than fewer trips in first. All valid. The real lesson to be learned, though, is that you get a terrible return on investment when you redeem miles for trips whose actual ticket price is relatively low.

Beware! Airlines that employ the "Traditional Miles" rewards system are often stingy about the seats they allow you to book rewards for. There are sometimes blackout dates, i.e. dates (like holidays) on which the airline is declining to allow travelers to book seats using their miles. There are also sometimes caps on the number of seats available on a particular plane, meaning that reward eligible seats on popular routes can fill up and make those particular flights unavailable to you.

What about these "perks"?

But wait, what about those "perks"? "Traditional Miles" rewards programs tend to take longer (much longer) to earn you free travel, so they try to make up for that by offering perks to their most frequent and loyal customers. This is what makes them a compelling offer to very frequent travelers, and nearly a waste of time for infrequent leisure travelers. If you don't make at least 30 flights a year on one of these airlines, you are never going to enjoy the perks. They simply won't be available to you. If, however, you fly enough to get into the 30 flights (and more) range, you'll suddenly become eligible for "status" with your rewards program. Basically, the more segments (flights) you fly or miles you accumulate in a year, the better your "status" will be. Each successive layer of status unlocks better perks such as free or discounted upgrades from coach to business / first class, a mileage multiplier such as the one I described earlier where I get a 100% bonus on miles, free checked bags, early boarding, free alcoholic beverages, and on and on it goes. This is how we flew first class from St. Thomas to Philadelphia several months ago.

What about when I fly on other airlines?

In general, miles can only be shared among airlines in the same "Airline Alliance" (an organized association of global airlines that share routes, miles, tickets, join marketing, etc). In other words, if you're a Delta SkyMiles member flying on their alliance partner Air France, the miles you fly on Air France can be deposited into your Delta account. Likewise, in most cases, one could use Delta SkyMiles to book reward travel on another airline in the same alliance. For reference, American is a member of the OneWorld alliance, Delta with SkyTeam, and United with the Star Alliance. Alaska is not a member of any alliance, so is a bit of an odd bird, but has partnered directly with a variety of other airlines to share miles for its members.