Got Airline Miles? Now Is a Good Time to Use Them

Deals designed to boost customer loyalty also make it a good time to earn miles

Commercial Airplane
••• Greg Bajor / Getty Images

The coronavirus has exacted a hefty toll on the travel industry this year, but for airline loyalty program members, that means it’s a good time to use—and earn—frequent flyer airline miles.

Mile values are pretty stable and flight prices—both in dollars and miles—are below pre-pandemic averages, according to research conducted by The Balance. At the same time, airlines are selling miles to credit card issuers in order to boost revenue. For their part, issuers are turning those miles into hefty bonus offers and short-term earning opportunities for travelers who have been grounded this year. All of these things have created an environment primed for consumers who want to earn or use airline frequent flyer miles right now.

“It’s definitely been a tumultuous year for anyone when it comes to travel,” said Erin Murray, vice president of marketing for Points, a leading loyalty program consulting firm. “It has become critical for airline loyalty programs to maintain a strong customer base. And right now, that means there is absolutely more value available for the consumer.”

Key Takeaways

  • Thanks to lower average flight costs and nominal mile value changes, frequent flyer rewards may go further to cover a plane ticket (or two) right now.
  • Airlines are selling miles to banks to boost revenue but also increase customer loyalty via credit card bonuses and other short-term offers.
  • While travel is starting to pick up, 2021 is still expected to be a rough year for airlines, so experts are advising frequent flyer program members to use miles ASAP before they’re inevitably devalued.

Airline Miles May Go Further During the Pandemic

Based on popular flight route data collected for nine major U.S. airlines this year, The Balance found the average value of frequent flier miles hasn’t changed dramatically during the pandemic. Per-mile values either dropped a few percentage points (just fractions of a cent, in dollar terms) or held steady. Only one airline's miles—Hawaiian Airlines’—actually have a higher average value right now than they did in March. 

These small changes are good news for consumers sitting on a pile of miles after staying at home for several months. But even better news is that average flight costs have fallen, according to The Balance’s research. That means your miles may go further than they did earlier this year.

Eight of the nine airlines we track now have lower average flight costs (in dollars) than they did in the first quarter. Two of the largest airlines, Delta and United, have seen the largest average ticket price drops, both upwards of $100, according to popular flight route data tracked by The Balance.

The same trend was observed among average award flight prices for six U.S. airlines. The fact that the two figures are in sync aligns with how most airlines price award flights. “Almost every frequent flyer program has moved to dynamic pricing, which means that rewards pricing is based on actual pricing,” Murray said. “So if you are seeing price discounts on the market, you will likely see award price discounts.” 

Hawaiian Airlines, United Airlines, and Delta have seen the largest average award flight price cuts—several thousand miles, in some cases—since the first quarter.

There Are Flight Deals to Be Found, Within Reason

The lower award flight price data has surfaced outside of The Balance’s research data, too. 

An airline industry survey conducted for The Wall Street Journal by IdeaWorksCompany, an airline and travel industry research and consulting firm, found award flights are, on average, much cheaper than they were a year ago. 

The survey looked at domestic flight prices on the most popular airline routes to determine how much airlines have been charging passengers to buy a ticket during the coronavirus pandemic. United award flights had the lowest average round-trip cost, at about 12,388 miles—about half of the average recorded a year prior. The survey also noted big savings on first-class tickets for Delta, American Airlines, and United, as reported in the WSJ Your Money Briefing podcast.

“Overall, reward prices are down, for some airlines more than others,” said Jay Sorenson, president of product, partnership, and marketing practice for IdeaWorksCompany. “If you are able to redeem the miles for a destination in first class, that is a grand use of miles right now. Secondary to that would be redeeming them for coach travel.” 

The Balance’s flight research data found the same thing. Your miles will likely be worth more if you use them to book a premium award ticket rather than a lower-cost coach fare.

However, airlines aren’t making widespread price cuts or going all out to advertise the deals right now. “I think airlines have a bit of an ethical conflict with pricing right now. Putting America on sale during a pandemic doesn’t seem wise,” Sorenson said. “But now does seem to be a very good time to book travel, especially if you are looking to redeem miles.”

Even if you can’t find a good deal on your desired flight, it’s likely easier to book an award flight these days. “If you think about the current environment, there are so many nearly empty flights,” Murray said. “So there are actually more options for award travel right now.” 

Flight Deals and Bonus Offers Benefit Cardholders and Airlines Both

The news of largely stable mile values and lower flight costs is even more positive considering how easy airlines and credit card issuers have made it to earn extra airline rewards this year, even if you haven’t been traveling. 

Travel rewards card issuers such as Chase and American Express have offered extra rewards on groceries and restaurant purchases. For some airline-branded cards, like the American Express Delta SkyMiles suite of products, this means cardholders can earn more than double the miles they normally would on such purchases. 

More recently, several issuers have upped the sign-up bonuses attached to their airline-branded credit cards to attract new customers. For example, the United Explorer card now boasts a new-cardholder bonus worth about $1,533, based on The Balance’s average mile valuations.

While this is great for travelers who want to quickly accumulate miles for a trip later, it’s also good for the airlines. By selling miles to banks who then boost credit card bonus offers and limited-time earning options, carriers can bring in extra revenue during a year of massive financial losses. 

“Loyalty programs are steady streams of revenue for the travel providers,” said Murray. “As they go and look for revenue, they are selling more miles to these partners than they ever have before. That’s what you are seeing with really rich acquisition offers from credit card issuers.”

Making more miles available to consumers is good for encouraging long-term loyalty, too. “Even when people aren’t traveling, people still want to amass the credit card miles,” said Brian Sumers, senior aviation business editor for Skift, a travel industry news and research organization. “Right now you kind of want to put money on your card and dream about the trip you will take when the pandemic is over. People love to travel and they love to dream about travel.”

Stormier Travel Skies May Be Ahead

Glowing airline mile values and flight deals won’t last forever. Just like the U.S. dollar, if there are too many miles on the market and not enough being used, you get inflation. That means your airline miles won’t be worth as much and loyalty program perks could fade away, too—a loyalty program phenomenon known as ‘devaluation.’ 

“If airlines keep issuing miles and they aren’t being redeemed, that is liability on the books for the airlines,” Murray said. “The only way the economic model works is if there is a steady stream of earning and redeeming miles.”

When an airline sells miles to a bank, the revenue from that sale comes in two parts: one from the initial sale and another when the mile is redeemed later, according to Sorenson. Typically airlines didn’t have an issue striking a balance between issuing miles and redeeming miles, but like many other things, that changed this year. 

“The pandemic has added another layer of complexity,” Sorenson said. “People who are buying fares are, in large numbers, not flying. People who typically buy fares with cash are not flying, and people who use miles to buy flights are also not flying.”

While air travel has started to pick up, the volume is still well below where it was this time last year. As of publication date, TSA checkpoint travel numbers were about 72% below 2019 levels.

“There is an overhang that is building and it’s hard to say if there will be problems with this in the future because it really depends on how travel comes back,” Sorenson said. “2021 is probably going to be a worse year for the airline industry than 2020 was.”

In 2020, the travel industry had nearly a full quarter of solid revenue and profits, Sorenson explained, and while things fell apart in March, government assistance helped get them through this year. The 2021 outlook is still up in the air, despite promising COVID-19 vaccine trial news that boosted airline stocks on Nov. 9. If travel is slow to rebound, frequent flyers should expect to see loyalty program devaluations compensate for the lack of air travel and mile redemptions. 

Want to Travel Soon-ish? Use Your Miles Now

There are many factors at play when deciding to book travel right now, especially as COVID-19 cases continue to rise in the U.S. However, if you are interested in traveling in the coming months, consider taking advantage of the frequent flyer deals available now. 

“The general rule is to use your miles as soon as possible,” Sumers said. Sitting on airline miles is always a risk, because airlines can strip value from their loyalty programs, raise prices, or add award expiration dates at any time. While those things aren’t happening now, they could later. 

Most major airlines are still waiving or have eliminated flight cancellation and change fees, even for award flights. So if you have to or want to change your plans later, you can still get something on the books now without worrying about those potential costs later. 

“If it’s worth flying in the near future for you, use the rewards,” Sumers said. “Book the flight and don’t worry about the actual value of the miles. No one knows what the future will bring.”

Article Sources

  1. The Wall Street Journal. "Airlines Sweeten Frequent-Flyer Deals to Lure Travelers." Accessed Nov. 11, 2020.

  2. Transportation Security Administration. "TSA checkpoint travel numbers for 2020 and 2019." Accessed Nov. 11, 2020.