Airline Frequent Flier Programs

Nickel and Dimed! US Airways Ch-ch-changes!

(Turn and face the strain)
Oh, look out you rock ‘n rollers

-david bowie

My post on Monday, Feb 11 with advice to a friend on getting an award ticket with US Airways is already outdated.

US Airways has announced a couple of changes to the Dividend Miles program.
1. Flight Segments will no longer earn 500 miles minimum, but actual miles.
2. Award travel booked online within 14 days of flight departure will have a $50 expedite fee. (The no fee for an award ticket booked online up to 6 hours before flight departure was a major competitive benefit for the Dividend Miles program that is now being eliminated.)

The flight segment change may not seem like a big deal, however, the 500-mile minimum for miles earned per flight segment has been standard across the major US airline frequent flier programs. Now we wait and see if other airline loyalty programs follow suit.

Let me explain why this is a big impact.

I live in Monterey, California and flights originating at our local Monterey regional airport are predominantly feeder flights to the major hubs of San Francisco and Los Angeles airports.

In practice this is how the change affects a regional flyer like me. Let’s assume I take 10 trips a year to international locations and cross country domestic. Assume all my flights go from Monterey through San Francisco. (In reality, I try and fly through Los Angeles because the flight out of Monterey to LAX is much more reliable. MRY-LAX=266 actual flight miles. I use Great Circle Mapper for quick mileage checks that are usually within 1 or 2 miles of frequent flier program distance calculations in my experience.)

MRY-SFO is 92 flight miles. Under the old US Airways rules, my United flight segment for MRY-SFO would earn 500 minimum base miles. The new rules for tickets purchased on or after March 1, 2008 for flights on or after May 1, 2008 will earn only 92 miles for this flight.

Upper tier elite status earns a 100% flight miles bonus.

Current miles earned for a flight including MRY-SFO segments on outbound and inbound:
MRY-SFO 500 miles x 100% elite bonus = 1,000 miles
SFO-MRY 500 miles x 100% elite bonus = 1,000 miles
2,000 miles earned for these two flight segments of a ticket.

As of May 1, 2008
MRY-SFO 92 miles x 100% elite bonus = 184 miles
SFO-MRY 92 miles x 100% elite bonus = 184 miles
368 miles earned for these two flight segments of a ticket.

The frequent flier miles earned has been reduced by over 80% on these flight segments.

A frequent flier, with 10 international and domestic tickets that have these Monterey to San Francisco flight segments, will see miles earned over the course of a year reduced from
20,000 miles down to 3,680 miles with the rule change to actual flight miles per segment.

Even if considering miles have a simple value as low as 1 penny each, this means a loss of about $175 in earned mileage per year.

20,000 miles is a good portion of the way to a free ticket.
3,680 miles is a free magazine subscription.

This is a big frequent flier program change.