I still remember my first trip to Korea, when I was asked to enrol on the air miles scheme of Korean Air. After a quick meeting in Helsinki I was to fly to Seoul via Frankfurt and I can still remember walking to the Transfers Desk and being asked to put down some personal details in order to start accumulating air miles. At that point in time I barely knew anything concrete about air miles.
Without too much thinking, I put down my personal details and said thank you when the counter desk girl handed me my temporary paper card and told me I was to get the plastic one in 2-4 weeks time.
Since that time I have earned and redeemed thousands of miles accumulated by flying – because there are numerous other types of “miles” that can be accumulated and redeemed without moving an inch – I wonder why the call them miles. I have earned miles flying business to Tokyo and have redeemed miles on flights to Australia or Peru. I have also lost many thousands of miles (expired, never logged) and I have been quite cross about it! Other times, I have also redeemed miles on buying worthless carry-on bags or useless pens so as to make some use of soon-to-expire miles.
Many a times I get to talk about such loyalty schemes and I usually get the question on whether it is worth bothering?
Well, my answer is that provided a decent traveller (business or not) logs at least 3-4 flights on a yearly basis, it is worth bothering. So, here is some advice that one can make some use of.
We start from the basics…
Advice 1. Enrol in any airline scheme that you fly for a first time and make sure you log all miles. You might loose some of your time (and your temper sometimes), but that is all you might loose while the potential gain is high!
In other words. If you never were a member of a scheme, you would never be able to fly for free. You don’t want to be regretting not logging your first trip that could add up those precious miles enough to qualify you for your first free flight. If you use a main airline on a regular basis, even on the difficult schemes you might be able to get a free national flight after a year or so.
Goal 1. You don’t want to be missing miles that in the future you will regret.
Once you start accumulating a reasonable number of miles you start questioning yourself. What is the actual process of mile accumulation – because initially you don’t really care? What schemes exist? Can I use them for a life? What is the process of redeeming? Do I need to pay more for the service? What are the general terms and conditions?
… which brings us to the second advice!
Advice 2. What ever scheme you enrol, make sure you read the terms and conditions and make sure you are always up-to-date on the way such schemes “work”.
In other words. Out there, there are myriad of air loyalty schemes with myriads terms and conditions. Make sure you know how each scheme you have enrolled works, how you accumulate and redeem miles. The miles you get are per flight, related to the actual distance you fly or to the money you pay? Can you have a rough metric on miles that can be earned – because this was usually a well-kept secret until you actually flew! You have to be able to know most of the practicalities that in some occasions are a deciding factor in bothering with a scheme or not.
Goal 2. You need to establish a firm understanding both on the main practicalities and on all those “bells and whistles” for every scheme so that you don’t find yourself unprepared at the end of the year when miles are expiring and having to set the counter again to zero.
Once you know the technicalities behind each scheme, you need to establish an understanding on issues that require further refinement. How many flights can I fly to get a free ticket? Is one scheme better than the other? What if I fly frequently between two cities and I have the opportunity to select between two airlines?
Advice 3. Take time and establish understanding on the performance of each scheme independently and in relation to each other. Work on a yearly-performance period, rather than on a single flight basis.
In other words. Find the value of each scheme through the “performance evaluation” process. Is it worth sticking with one airline because of the loyalty scheme? Should I book only “World Airways”, because in 10 flights I might get one for free? Is the accumulative number of the additional Euros of those 10 flights (compared to another airline) more than the free ticket plus taxes? Are those schemes truly “legitimate” that after a small number of flights you qualify for a nice European flight or do you have to fly 10 round the world business trips to qualify for a one way ticket between Heathrow and Gatwick? Basically the two sides of the coin are the following.
The cheapest ticket (with no airmiles) may not be the one with the biggest long term “value”. In the same way, a “free” air-mile award ticket is not necessarily the cheapest option. You pay for taxes and surcharges so the actual gain may be just 50-100 euros while the whole year you have already paid more than 500 euros in choosing an expensive airline. Of course the above are seen under the perspective of what type of traveller you are e.g. business.
Goal 3. Be able to select at each time what are the best suited tactical and strategic moves for flight ticket booking.
By simplifying the above, a traveller should be basically be able to answer if Cost[Airline A] is higher or lower than Cost[Airline B], assuming the means of comparison is the award of a free ticket we have.
Cost[Airline A] = Cost[Airline A.X flights] – Cost[Airline A.FreeTicketMinusTaxes]
Cost[Airline B] = Cost[Airline B.Y flights] – Cost[Airline B.FreeTicketMinusTaxes]
Cost[Airline A.X flights] is the cost of the total flights i.e. X that are required to be awarded a free ticket for Airline A and Cost[Airline A.FreeTicketMinusTaxes] is the cost of a free-award ticket minus the taxes one has to pay. Of course the above depend on a number of parameters like booking period, travelling period etc but at least some useful results could be extracted.
All in all
Air mile loyalty schemes for some years have been quite appealing. It was easy to accumulate miles and easy to redeem. On many occasions there was no expiry period, there were few taxes and it did make sense to be offered a truly free ticket. There were no combinations of miles, points, tier points. However, many schemes did lack the easiness in use. They could not have expected to call a long distance number even to ask about availability of flights for award booking.
Still, as schemes became more widespread so did the cost of the schemes increase. It was not just about issuing a card, but a whole division of well-paid professionals were employed to make such schemes work. The complexity of such schemes also increased and it was gradually much easier to just log in the internet and get all details and the actual booking without speaking to a single agent in Antarctica. At the same time though more restrictions were put and flight taxes and surcharges increased. This meant that air miles redemption schemes became slightly more difficult to justify! Low cost airlines appeared and challenged even more such schemes.
Some questions need answering! What is the real gain for airlines? Do they actually use such schemes to really attract customers or are such scheme fall under another marketing strategy to just show that one cares for customers while the value is of little use. What if there were no business travelling. Would such schemes exist? Why in some cases such schemes are (or seem to be) tailored for the business traveller – or the traveller that flies primarily business? Why does it seem that provided you are not a high executive flying business every month, your chances of earning a reasonable amount of miles is probably diminished?
The value of each scheme depends on many preconditions. Not any scheme, of any airline fits any traveller. Depending on the destination, type of travel, period of booking, diversity of flights, loyalty schemes can be of gain. Still, while a scheme is everything else, like customer care, ease of use, it is – it has to be – primarily about miles. If it is difficult to accumulate and redeem miles or if such schemes change frequently, it just makes them unattractive to travellers. I remember travelling to the other side of the globe – Hawaii – and earning literary zero (0) miles. For the love of God! I did make this trip. Right? Earn me 100 miles just for the sake of it!
As a closing statement
- If you are a business traveller such schemes seem really attractive! Go for it!
- If you are a non-business traveller and under the low-cost airline status, such loyalty schemes do struggle to provide value and outperform tickets of low cost airlines. Evaluate and compare!
PS. And when you thought you had mastered the art of air mile loyalty schemes, other combined loyalty schemes “arrived”. Hotels, credit cards, phone bills, kilos of Stilton consumed or bought on a weekly basis … all have been linked with air miles and vice versa…Life has to be complex!