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Are airline miles any less valuable than they used to be? Probably not.

by on Wed December 28, 2011 • No Comment

A common belief is that airline miles decrease in value over time, and that mile programs have only gotten worse since their inception in the 1980s. While we do see our share of airline mile devaluations (see the change of British Airways’ program to Avios that made long haul rewards more expensive, but short haul ones much cheaper) — in the aggregate, we’re better off in many ways than we were 25 years ago.

Case in point…the cost for a free ticket.

Did you know that in the 1980s this was American Airlines mile reward structure?

12,000 miles – Economy to First Class upgrade

20,000 miles – 25% off round trip ticket

30,000 miles – 50% off round trip ticket

40,000 miles – 75% off round trip ticket

50,000 miles – First class ticket to Hawaii + upgrade for companion with purchase of coach ticket

Compare that to today….when you can get an upgrade for 15,000 miles (plus a copay if you’re not an elite member), a fully free domestic ticket for 25,000 miles (with limited availability), or 50,000 miles for unlimited availability. Sure, the 50,000 mile first class ticket to Hawaii was nice because it included a companion upgrade.

But it’s not that bad now. And when you adjust for inflation, the cost of travel both in miles and cash is still lower than it was back then. Not to mention back then you could only use miles on American Airlines flights…which were far fewer back then, with few international destinations.

And with airline mile credit cards we have more ways to earn than ever before. What was once just the domain of frequent flyers, is now the domain of frequent spenders, and you the consumer benefits. Just don’t expect miracles like a free discounted miles ticket on the day before Thanksgiving (though even that is possible) and you’ll enjoy the rewards.

The View from the Wing blog has a nice long retrospective on why miles and points are as valuable as ever right now.


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