What’s the Point? (Are your frequent-flyer miles any good anymore?)
In the debate between collecting airline miles (such as Aeroplan) or credit card reward points (such as RBC Avion) used to come down to this: do you want to use your points for business class travel or economy? It's not quite so simple anymore.
With airline programs, for only, say, 30% more points you are eligible to book business class tickets, a product that typically sells for 200+% more retail. It is a good deal! Credit card programs, on the other hand, such as Avion or Airmiles, are only practical for economy class travel. (In theory you could cash in a huge quantity of points for a business class ticket, or pay the difference between their economy class budget and the business class price, but in both cases this is usually unwise.)
The big advantage of most of the credit card rewards programs is that for a comparable amount of points to airline programs, you can use your credit card points to “purchase” a retail price ticket – for any airline, any time. As long as you’re prepared to fly economy class, the credit card programs are the clear winner, especially if you have experienced the frustration of trying to redeem airline points to destinations or on dates that everyone else wants. (We love those calls a few weeks before Christmas asking us if you can book Aeroplan seats to Hawaii over the holiday!)
On the other hand, if you only want to use points for business class travel, then you need to build up your airline program points. However, over the past year, we have noted a disturbing trend with the way airlines manage points inventory. Up until a year ago, savvy clients (and travel agents) have been planning points trips over one year in advance. The moment the points seats are released by airlines (generally 11 ½ months in advance), we pounce! This has been a very successful strategy for years in securing those hard to get business class (and first class) seats to destinations where comfort really counts – say, Sydney or Hong Kong or London.
No longer! Air Canada, for the past year, has consistently released only one business class seats for Aeroplan (and Star Alliance) members. Given that almost all points trips are for couples (they are mainly used for holiday travel), this is useless. Our points specialists have monitored daily, some times for up to six months before additional business class seats are released. Air Canada, and others who practice this policy, will eventually release more business class seats for points on some flights that are not selling well, but the problem is it is impossible to predict if or when! It means a tremendous amount of work for us and frustration and uncertainty for our clients and Aeroplan’s members!
It also means that this new policy rewards the casual, unsavvy member who lucks out and checks for points seat on a whim. And it punishes the savvy traveler, who is quite likely also an important customer of that airline.
Air Canada is not the only airline engaging in this policy. Lufthansa, Air New Zealand, and probably most of the Star Alliance carriers are doing this. In the case of Lufthansa and Air New Zealand, it appears they don’t even release one business or first class seat. They simply hold back releasing anything until they feel like it. So in these cases, not even the solo traveler benefits by planning ahead.
We have seen the same pattern on Oneworld Airlines such as British Airways or Qantas, but perhaps not quite so drastic a hold-back policy. (I cannot comment on Skyteam Alliance carriers because we do not book enough of them to see a clear pattern.)
What is triggering this practice? I think it is a combination of two things:
1. Most major airlines grant their top tier members (eg. Aeroplan’s Super Elite) preferencial access to premium seats on points. So it makes sense to them to restrict access to their lower tier members and to frequent-flyers who earn points solely through credit card purchases.
2. Airlines constantly tinker with their “yield management” software to try to squeeze out every possible extra dollar from each flight. If by holding back on releasing premium seats to frequent-flyer programs they can sell a few more premium seats early, that is exactly what they will do. (I wonder, however, that many people would book a paid ticket for business class or first class so far in advance.) But perhaps by allowing each flight to play out in the market place for, say, six months, without the handicap of 4-6 six seats being tied up on points bookings, the airlines can better assess loads and booking patterns to better set their airfares and marketing strategies.
From the point of view of the consumer, I question these days whether bothering to build your airline programs is really the way to go. Especially in Canada, I would speculate whether the era of travelling business class for free is coming to a close. In the U.S., on the other hand, all of the airline loyalty plans have good upgrade programs where you can purchase an economy seat and use points to upgrade. Canada, dominated by a single carrier with business class and a points program, does not have that option, unless you are flying a U.S. airline and using a U.S. frequent-flyer program.
For those of you who are Super Elite with Air Canada, or have comparable status on another airline program, this is not an issue. Generally, the top tier members can get a premium seat on the airline they have status with. On other “partner” airlines, however, they are in the same boat as the rest of us.
So, what do you do if you really want to travel business class or first class on points? My advice is, for now, downgrade Aeroplan as your primary points program, unless you are Super Elite or have the potential of becoming Super Elite. Choose an airline program other than Star Alliance (which all share the same points inventory and same frustrations) such as Alaska Mileage Plan (with partners in more airlines than any other program), or American Airlines (which has a very good upgrade program, as well as a very professional points redemption desk). In most cases, I would stay away from the “Skyteam Alliance” programs – airlines such as Delta, KLM, Air France, simply because they do not offer enough flight choices out of Canada, compared to the other two alliances.
Another good choice is most Avion cards (not all). With RBC Avion you can have your cake and eat it too. It functions both as a flexible credit card rewards program, where you can “purchase” any economy ticket for a reasonable amount of points – and earn frequent-flyer points on the ticket too, and most versions partner up with the British Airways Executive Club frequent-flyer program, which has both good and bad features. Bad because its call center is fairly unprofessional and unpleasant to work with, but good because BA and other Oneworld Alliance carriers still do offer reasonable access to premium seats. David Elmy
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