by Bill Hardekopf, CEO of LowCards.com
Mergers have dramatically consolidated the airline industry,
reducing the number of carriers, flights and competition. One of the overlooked
factors of this consolidation is the significant change in frequent flier
Airlines are now rewarding how much members spend rather than
just the number of miles they accumulate.
In January, Delta Airlines
and United Airlines started requiring cardholders to spend $2,500 in addition to
logging 25,000 miles in order to obtain the lowest level of seat. Spending
requirements are waived if a loyalty program participant spends $25,000 a year
on purchases with a carrier co-branded credit card.
Airlines say the
change is to reward their best customers and give the bigger rewards to the
customers who spend the most money. Jet Blue and Southwest Airlines already had
expenditure-based loyalty programs.
As airlines have consolidated to
four major carriers (United, Delta, American and Southwest), fewer competitors
mean airlines now have more power to make these changes. Some experts say the
days of the free domestic ticket for 25,000 miles will soon be over and the
airlines will be happy to see them go.
Some carriers have also increased
their mileage requirements on premium reward travel. For example, Delta
increased the miles for a "Saver Seat" to Hawaii from 40,000 to 45,000 Sky
Miles. United's Mileage Plus members need to spend 30 percent to 40 percent more
miles to get a free seat on any Star Alliance partner airline.
Airlines is merging into US Airways and has yet to make any changes. Citi will
soon issue new credit card accounts for the combined American Airlines
AAdvantage frequent flyer program. The two frequent flyer programs are expected
to merge in 2015.
If you have saved airline miles, it may be time to use
them before they lose more of their value and seats become harder to find. Many
industry analysts advise flyers to start planning a trip almost a year ahead of
time and avoid peak vacation times to obtain a better value.
Hardekopf is CEO of LowCards.com,
a site that simplifies the confusion of shopping for credit cards. It is a free,
independent website that helps consumers easily compare credit cards in a
variety of categories such as lowest rates, rewards, rebates, balance transfers
and lowest introductory rates. It also gives an unbiased ranking and review for