Surprise! Your 'Free' Airline Reward Ticket Has Gotten Cheaper

 The cost of Americans’ “free” frequent flier reward tickets dropped 17% between 2014 and 2019.

That’s right. Your “free” seat obtainable after flying a certain number miles on a single airline and/or its frequent flier program partners carriers isn’t actually free. It never really has been, despite what airline marketers always have wanted you to believe. You pay for those seats in advance by spending, in theory anyway, an extra penny or so for every mile you travel aboard that airline using tickets that you (or your employer or client) actually purchased.

But the good news coming from the 10th annual IdeaWorks Company’s Reward Seat Availability Study is that the price for reward seats claimed by U.S. frequent fliers in 2019 is down in most cases from five years ago. IdeaWorks is a Wisconsin-based consultancy that focuses on efforts by airlines – and other types of companies – to develop secondary, or ancillary streams of revenue beyond the basic sale of their principle products or services.

The second bit of good news from the study is that those reward seats also are a little bit easier to get, even at times of peak air travel demand. That’s somewhat surprising, given the constant, and seemingly growing consumer uproar over the difficulty of actually booking “free” reward travel seats, especially on flights to popular destinations and at popular times of the year, or even at more desirable times of the day.

IdeaWorks went online in March, as it has every year for 10 years, to ask U.S. and leading foreign airlines how many mileage points it would take to snag a pair of reward tickets to various desirable locations this summer. In the case of all six U.S. carriers included in the study, the answer was “fewer” miles than the year before, and fewer miles than every year since 2014.

Now, airlines don’t actually post mileage point “prices” for their reward seats. But long gone are the days when frequent fliers could know with certainty that 50,000, mileage points would get them a free seat on any domestic route, regardless of the day or time of travel, and irrespective of whether it’s a long Miami-to-Seattle flight or a real shortie like Chicago-Detroit. So IdeaWorks applied a complex formula for calculating the “price” of reward seats in a way that accounts for greater or lesser numbers of mileage points required to book reward seats for flights of different distances and, in some cases, on different dates and at different times of day. IdeaWorks also used a formala for equating mileage points awarded by Southwest and JetBlue airlines with those award by other U.S. carriers (they use different systems for awarding points).

Also, because the nominal value of a reward point is almost uniformly 1 cent, the dollar value of a reward ticket can be calculated by multiplying the average number of points required for a seat by 0.01, or 1 cent.

Thus, Southwest Airlines’ rewards seats this year are selling for 7,367, Rapid Rewards points, or the equivalent of $73.67, using IdeaWorks’ formula. In 2014 Southwest’s average reward seat cost 7,887 points, or $78.87. That’s a drop of 6.6% over five years.

Alaska Airlines’ passengers scored the biggest five-year decline in the cost of reward travel. They paid on average 23,429 Mileage Plan points in 2014 for a reward flight, but this year are paying 27.4% fewer mileage points, 17,000, for a reward flight.  In dollar terms that’s a $64.29 savings.

JetBlue passengers saw the smallest decrease in the “price” of reward seats over that same five-year period; just 5.2%. United’s average reward seat price declined 10% over five years; American’s dropped 18.6% an Delta’s fell 24.8%.

But those carriers showing the biggest drops in the cost of their average reward seat had by far the most expensive rewards seats to begin with. And they still do.

In 2014 the average reward seat on American cost 29,107 AAdvantage miles. This year’s 23,700 miles. Five years ago the average reward seat on United cost 27,786 MileagePlus miles but now costs “just” 25,000 miles. To get a reward seat on Delta in 2014 it cost an average of 26,179 SkyMiles points. Now it costs 19.680.

Why the change? Jay Sorensen, IdeaWorks’ president, explains that in the 2014-2015 airlines began applying “dynamic pricing” principles to their frequent flier programs similar to what they’ve being doing with their actual fare prices since the dawn of deregulation 50 years. All-but gone are the days when airlines would publish simple, graduated charts stating how many miles were needed for domestic reward flights in coach, how many miles needed for domestic flights in first or business class, and how many mileage points were needed for various types of reward seats on various international routes.

Now most carriers will allow frequent fliers to cash in lower numbers of mileage points if they’ll adjust their travel plans to help fill seats on planes leaving at less popular departure times and/or on less popular travel dates. Thus, while some reward seats these days actually cost more, in mileage points at least, than they did five years ago, most consumers cashing in mileage points adjust their plans to use the fewest number of mileage points possible. The result: a lower average number of mileage points used – or price “paid” – to get reward a seat.

The new IdeaWorks study also shows that the general availability of reward seats aboard 20 leading U.S. and foreign airlines has improved, for the most part, since 2014. That’s the surprising part of the study because one of air travel consumers’ biggest and most common complaints in recent years has been the inability to get reward seats to their preferred destinations at their preferred travel times. That, according to such complaints, is especially true when consumers try to book two reward seats together so that a business traveler can cash in his or her points for a “free” trip with their spouse. To account for that common booking approach, the IdeaWorks study’s methodology always included asking for two reward seats on the same flight.

And what the study showed is that getting coach seats on preferred flights at preferred dates and times is easier than it used to be – except on Southwest. The Maverick carrier always has maintained a policy of making any available seat on all of its flights available to Rapid Rewards members who request a reward seat. Nearly all other carriers limit the number of seats on their planes that they will let frequent fliers have in exchange for mileage points, even if there are lots of available, unsold seats on that plane. In some cases, airlines alot only a handful of seats – single digits out of the 150 to 300 seats available on big jets – for use by frequent fliers cashing in mileage points.

Excluding Southwest and its most generous reward seat policy, the highest ranking U.S. carrier on that list was JetBlue, which offered two coach reward seats to IdeaWorks’ online request 98% of the time. It was tied for third with Turkish airlines on that list. United tied with Qantas in seventh place, with an 85% positive response showing. American ranked eighth, tied with Korean Air, with an 84% positive response rate. Alaska ranked 10th with a 78% positive response. And Delta ranked 14th with a positive response rate of 62%. That tied it with LATAM Airlines and made it the lowest-ranked U.S. carrier on the list.

Four of the six U.S. carriers on that list showed improvement in their positive response rate over 2018. Southwest, with its perpetual 100% positive response rate, could not improve. Delta’s positive response rate of 62% in 2019 was down 10.1 points from 2018. United’s response rate improved a noteworthy 9.3 points. American’s rate rose 1.9 points and JetBlue’s rate climbed 3.7 points.