Burn your miles before they burn you
If you’re a Flash Fare Flyer (not a bad tongue twister), you don’t really need to worry about the skyrocketing price of mileage awards these days. It’s like the price of buying a new or used car. Have you seen that craziness lately? Mileage awards follow similar, don’t-look-now "dynamic" pricing.Uber in the Sky: Dynamic Pricing
Start getting more used to a dynamic pricing award world. Just as Uber has a dynamic pricing algorithm that changes the price of a ride based on time, route, and demand, so do airlines, except you can multiply their algorithm complexity by a big number. It can get silly, such as American Airlines charging 960,000 miles round-trip to Sydney in Business Class (no, not in First).
You don’t have to look any further than our special report on United back in December, where we were seeing inflation sitting at 59%+, and last month’s special report on American, where pricing was up to 800,000 miles in Business Class to Rome. Nuts!
Sure, there will always be pockets of opportunities for opportunity travelers, and those who are flexible on dates, destinations, and airlines will fly like rock stars. But if you’re not flexible, your miles aren’t going to be worth the paper they’re printed on.
Why Do I Think That?
Much of what remains unchanged is airline partner availability. I think partner airline award tickets are still cheap because the technology that integrates partner data from one airline to the other is NOT yet sophisticated enough to handle dynamic mileage pricing, or it would.But They’re Getting There
Last month there were rumors that Oneworld is coming out with alliance upgrades, where upgrades will be available right across the alliance partner airlines. It all sounds good at-a-glance but don’t get too excited, as it’s likely to follow the Star Alliance upgrade scheme – only valid with inflated full B and Y fares. That’s primarily international business travelers who fly on short notice and/or without a Saturday-night stay, and who have a coach-only corporate travel policy.But it does signal that partner technology integrations are maturing, and that’s the last barrier to skyrocketing partner pricing. It wouldn’t surprise me if that happened next month… six months from now… or in a year. But it’s happening. And as soon as it does, your miles are going the way of the U.S. dollar or the Venezuelan bolivar: up.
Are You a Miles Millionaire? Dump Those Turkeys Now Before Dynamic-Pricing Devaluation Gobbles Them Up
This means you have to look at your miles not as something you’re proud of — “hey Mom, I’ve just tipped over to the kajillion miles level!” Deflate that ego. You want to burn through those 2,000,000 miles or whatever they are. If all you have is 250,000 miles, then you don’t have that much to lose — basically a pair of tickets — as opposed to a warehouse full of devaluation.But if you’re a miles millionaire, spend those turkeys now. And keep your loyalty assets in points NOT miles to the extent you can. Burn miles first; points last. That way you’ll be able to transfer points to the airlines that are last to devalue.
Over the months and years to come, as one airline after another inflates their pricing, it’s because they’re in a non-competitive/price-fixing environment like big sports leagues are. Alliances are driving most of the airlines’ decisions nowadays with few exceptions.
Airline Dynamic Pricing = Miles Vacuum. Fold ‘Em, Don’t Hold ‘Em
If you’re thinking about miles and you’re a mileage flier who refuses to fly coach or premium economy, make sure your trip planning starts with what’s feasible. That means building your bucket list around what is available to you. If there was ever a time to not book backwards, it’s now.How can you get a sense of what’s available? Here’s a host of special reports to give you a sense of award availability trends. I don’t know anyone that publishes award seat availability reports like FCF does, do you?
Like United, American AAdvantage Miles’ Inflation Follows the U.S. Dollar
United We Fall: UA Elites Are Getting the Rough End of the Upgrade Stick to Europe
AA Oddsmaker. Up Your Chances of a Mileage Award Ticket in a Tough Market to Europe
Use Your American Miles Before They Get Shaken and Stirred
