A new analysis of award travel costs among U.S. airlines that base their loyalty programs on dollars spent shows some big changes in the past few years – with good news for Delta’s flyers and bad news for United’s.
The study by IdeaWorks Company and CarTrawler looked at how average reward travel prices paid in points/miles changed from 2013 to 2017. It found that the average reward price for a domestic roundtrip on Delta fell by 19.1 percent, from 28,964 miles to 23,443 — the result of “a genuine effort” by Delta to reduce award prices, IdeaWorks said. On United, however, the average price jumped by 28.7 percent, from 26,357 to 33,929.
The proportion of United domestic award flight queries priced at 25,000 miles or less dropped from 83 percent four years ago to 43 percent this year, the study found.
The price of American Airlines’ domestic award tickets fell by just 2.3 percent over the four-year period, from 31,071 miles to 30,357.
But reward travel prices on the Big Three were far higher than on the airlines that ranked first and second on the cost chart: The cost of a JetBlue flight inched up half a percent, from 15,774 TrueBlue points in 2014 to 15,849 this year. And for first-place Southwest, the price fell by less than a point, from 9,353 to 9,300 Rapid Rewards points.
Why the big difference? “The pay-with-points method (JetBlue and Southwest) links reward prices to prevailing air fares,” IdeaWorks said. “Program members can seek out low reward prices on flights that have lower fares. Reward prices adjust to demand in the same way fares have since supersaver rates were introduced decades ago. The mileage-based method is far less precise and typically ranges from 25,000 to 50,000 miles for a roundtrip domestic US reward.” However, it added that the Big Three are now “embracing more graduated pricing methods which removes the predictability of the traditional 25,000-mile and 50,000-mile classic reward option.”
Besides costing the customer less for award flights, Southwest and JetBlue are also more generous for non-elite economy flyers, IdeaWorks noted, both providing six program points per dollar spent, vs. five miles per dollar for the Big Three.
The above analysis changes considerably for elite-level frequent flyers, the company said, because they accrue points/miles at a higher level. Thus “ultra-frequent travelers may realize better reward value” from United, Delta and American.
Alaska was not included in the study because it still bases its loyalty program on the traditional miles-flown method. IdeaWorks noted that the average price paid for reward travel on Alaska this year was 18,500 miles, which would have placed it third, after Southwest and JetBlue.
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