Travel tune-up: re-thinking airline loyalty programs

Photo from UW Digital Collections, via The Commons on Flickr

Photo from UW Digital Collections, via The Commons on Flickr

About 25 million people had plans to travel by air this Thanksgiving weekend and, as they return from their holiday, some are already making travel plans for 2015 using the frequent flier miles they earned from airline loyalty programs this past year.

But changes in some of those programs might make some travelers rethink their allegiances now.

Alaska Airlines will begin offering increased mileage bonuses for a number of fare classes and elite Mileage Plan members. Starting January 1, the airline will be offering big mileage bonuses to first class, refundable coach and MVP Gold upgradeable travelers.

Both Delta Air Lines and United Airlines are joining the fray by upping the antes for flight miles and elite programs, through a mix of cash spend and frequent flier miles.

Beginning January 1, 2015 the cash spend required for reaching various levels of Premier status on United Airlines in 2016 will be raised. And starting March, 2015, United passengers will earn award Mileage Plus frequent flier miles based on an equation that takes into consideration ticket price and frequent flier status instead of actual miles flown.

As of January 1, 2015, Delta Air Lines SkyMiles members will earn miles based on ticket price and elite program status as well and, as these charts outline, the cash spend for reaching for reaching various Medallion levels is increased as well.

Various websites (many of which earn commissions from promoting mileage-linked credit cards) parse the minutiae of the airline mileage rules but “come next February, I think a lot of people are going to drop status because of these changes,” said Brian Kelly, founder of ThePointsGuy.com. “Even though they may have flown the same amount as the year before, they most likely won’t hit the revenue requirements.”

It may be more difficult to accrue elite status, but United and Delta have still rolled out some helpful all-access perks.

In August, Delta introduced Delta Studio, which offers movies, TV episodes, music, games and other free entertainment options on all of its domestic aircraft and two-cabin regional jets.

Just this week, United expanded its free on-board wireless video streaming to Android devices, and will also offer bonus mileage incentives to smartphone app users via MileagePlus X.

And, as part of a major make-over underway at United’s hub at Newark Liberty’s Terminal C, passengers will be able to use Mileage Plus award miles to pay for purchases in restaurants and stores via the 6,000 iPads OTG Management is installing as part of the project.

In the second quarter of 2015, American Airlines’ AAdvantage and US Airways Dividend Miles members will become part of the same frequent flyer program.

Mileage balances will be combined, elite levels will be aligned and a new upgrade policy for elite status members flying on American and US Airways will be put in place.

Do you want to check luggage with that ticket?

In the first half of 2015, JetBlue will launch a three-tiered flyer program that will allow some passengers to get up to two pieces of luggage checked for free, along with other incentives.

Meanwhile, Hawaiian Airlines will offer its travelers the option of earning travel miles “based on distance flown, not based on ticket spend and Elite status,” spokeswoman Alison Croyle told CNBC. “The airline will also not require any minimum spend to make elite status.”

Based on the host of incentives and upcoming changes, airline watchers say passengers need to decide whether certain loyalty programs are worth keeping.

Elite status is becoming harder to earn and less valuable, at least at the mid and lower tiers,” said ThePointsGuy’s Kelly.

“So you need to identify what you want out of your program,” he added. “Calculate how much extra you pay for your loyalty and see if you’re receiving more than that back in perks and the value from miles. If not, then it may be time to switch.”

(My story about airline loyalty programs first appeared on CNBC in a slightly different version.)