People have different opinions when it comes to booking award tickets with frequent flyer miles. I, for one, love booking award tickets and enjoy the challenge that comes with doing so. Booking award tickets are like puzzles to me and I love solving them. Other people hate booking award tickets, consider them too much of a hassle, or even go so far as to believing their frequent flyer miles are completely worthless. I’ve decided to put a guide together for those of you who fall in between – people who want to book award tickets themselves but feel like they need some pointers. This guide will assume some basic knowledge, namely, that you know how to log in to your frequent flyer account and check your mileage balance. Other than that, the guide is here to help you through the process – hope you find it useful! Feel free to refer to the index at the bottom of the page for other entries.
In Part I of this guide, we will talk about the reasons why airlines offer frequent flyer miles and tickets. Though there is very limited practical information to go over at this point, understanding the business reasoning behind award tickets will help us to determine how to get the most value out of the system that airlines have created.
Why do airlines have frequent flyer programs?
The short answer to this question is to build brand loyalty. This should be fairly obvious to most – companies in almost all industries try to build brand loyalty by rewarding their customers. Whether it be Stop and Shop gas points, buy nine slices of pizza get one free, or award tickets, all companies including airlines are looking to steer as much business towards themselves as possible.
There are two main components to frequent flyer programs today. The first is the offering of elite status, or benefits, to loyal customers. An important thing to understand is that a small percentage of flyers account for a disproportionately large percentage of an airline’s profits, so elite benefits are offered in an effort to attract and retain loyal customers. Elite benefits include things like complimentary upgrades, mileage earning bonuses, better phone agents, and other niceties. This is like Starbucks “gold” status, you receive extra benefits once you’ve crossed a certain threshold of business (for airlines, generally miles flown although new revenue requirements have been added for Delta and United this year).
The second component of frequent flyer programs (and most relevant for our discussion of award tickets) is the earning of redeemable miles or points for flights flown on an airline. This is more like buying nine slices of pizza and getting one free. The confusing thing is that in most cases, the same airline often charges different award prices for the same flights, meaning you could range from anywhere between nine slices for one free slice to ninety nine slices for one free slice! This brings me to the most important thing thing you need to understand when trying to find and book award space: the reason airlines offer award seats at all.
Why do airlines offer award seats at all?
Think back to your last few flights. When have there been absolutely no empty seats (and maybe people even getting bumped off the flight?) And when have you been able to stretch out with an entire row for yourself? The reality is, flights cost an airline almost the same amount of money regardless of how many seats are full. Sure, there are differences in terms of fuel consumption (more people and more baggage = more fuel), but no matter what, the airline is paying the same airport fees, the same number of flight attendants and pilots, the same depreciation on their aircraft, etc.
Award seats are a way for airlines to fill up their planes and make a small profit when they would otherwise be flying empty seats. They make their profit in different ways – award fees, sometimes people buy miles, etc. – but they also make money because they are continuing to build brand loyalty. Essentially, they are giving you your free slice of pizza – but when THEY want to give it to you. Or perhaps it’s more accurate to say you get your free slice of pizza only when your desire for pizza coincides with a time when the airline has leftover pizza to give you.
At this point you probably are getting a feel for why award seats are so hard to find when you want them – if an airline believes that it can sell a seat for cash, it’s not going to offer it to you as an award. Thus, airlines offer the most award seats at two times – as soon as they have opened their schedule and the week before the actual flight. And sometimes, like during Christmas, an airline might not offer any award seats at all.
So in general, award tickets and seats are directly related to supply and demand of cash flights. At high demand times when lots of people want to fly (and would be willing to pay for it), the number of award seats drops. Whenever you wouldn’t expect many people to be traveling (Tuesdays and Wednesdays come to mind), there will generally be more award seats available.
It might seem weird to start a DIY guide for booking award tickets with all this theory, but I think it’s important to understand where the airlines are coming from if you are going to maximize your value when participating in their programs. The main points you should take away and be thinking about as they relate to award tickets are:
1. Frequent flyer programs are designed by airlines to build brand loyalty and maximize profits
2. Award seats are a way for airlines to make money for seats that would otherwise go unsold (or to minimize their losses)
3. Award seat availability is subject to the same concepts of supply and demand that affect cash ticket prices – high demand will mean low supply
If you keep those three points in mind, it will help you better devise strategies to find award seats when you want your pizza, not just when the airlines want to give it to you. Yes, I love pizza. In the next installment we’ll take a look at the different type of award programs and charts out there and how they affect your award ticket bookings. Until then, feel free to post thoughts or questions in the comments!