What You Need To Know About Changes Coming to Frequent Flier Programs

by Josh Lew
Last updated: 4:30 PM ET, Fri January 8, 2016

Frequent flier programs offer nice perks, this much is a given. However, it takes a lot of flying or spending to get any real value out of loyalty programs (or from the credit cards that often go with them). We've all seen the Jennifer Garner commercials.

Going out of your way to collect miles is often not worth the effort in terms of time spent versus return received. That said, an occasional free companion flight or perhaps an upgrade to business class is enough to make many people into casual miles collectors.

Massive spending needed for major rewards

Chinese billionaire Liu Yiqian earned a staggering amount of rewards points when he used his American Express Centurion Card to buy a valuable work of art - Amedeo Modigliani's Reclining Nude - for $170 million at a Christie's auction in November. AmEx didn't comment, but based on the price of the painting, Liu would have earned 170 million points. According to a report by the Guardian after the sale, that would be enough for him to fly first class for the rest of his life without having to spend another dime.

For the rest of us, however, the occasional upgrade is the best we can hope for.

Changes on the horizon for miles collectors

Actually, frequent fliers will have a harder time earning miles this year. The main reason is that airlines are starting to change the way that they dole out miles and points. This will especially affect people who earn miles from flying (rather than from credit cards). This is because programs are switching from awarding points based on factors like miles flown and type of ticket to awarding points based on one thing: the amount of money spent.

According to the Wall Street Journal, Delta and United have already switched to this kind of rewards program. American will follow suit sometime in the later half of 2016. Miles hustlers will no longer be able to get the "double bonus" that comes from finding a cheap flight AND getting the full compliment of miles from it.

More ways to spend, but less value

The good news is that miles are getting easier to spend. For example, restaurants in Newark's Terminal C have been testing accepting airline miles instead of cash, and United has opened a store called the Miles Shop in the same terminal where passengers can pay with cash or directly with airline miles. More carriers are also letting fliers redeem miles for in-flight expenses like snacks, beverages and Wi-Fi.

Things may be getting more expensive when it comes to spending miles on tickets, however. Low-cost carriers like JetBlue and Southwest base the point-price of flights on demand. That means that it costs more miles to get a ticket for a busy route or a peak time than in does for other routes or times. This has not been the case for legacy carriers in the past. However, Delta has said that it will be following Southwest's lead sometime this year. The other legacies will, most likely, be following suit soon after.

Going forward in 2016, miles mavens will have to adjust their strategies. Some loopholes, such as getting full rewards for cheap flights, may be closing, but new variables will be coming into play.

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