Frequent flyer programs, or FFP, are a reward system created by airlines to increase customer loyalty to a particular company. Most award points or miles to the customer are based on certain actions the customer can take, such as buying an airline ticket or renting a car from one of the airline’s partners. Frequent flyer programs are a great way to earn discounted tickets or other rewards, but customers must be aware that there are often hidden fees associated with redemption of their points.
In 1981, American Airlines began the FFP craze by introducing AAdvantage, partnering with Hertz rental cars and Hyatt hotels. The basic system meant that for each mile flown with the company, the customer would get one free mile in their account. Unfortunately, the system is a bit more complicated as one frequent flyer mile does not equal one actual mile of a flight. Most rewards, such as domestic airline tickets, aren’t achievable until you have reached a certain set number of miles, usually 25,000 or 50,000. Some consumer studies put the actual cash value of a frequent flyer mile at about 2 cents in US Dollars (USD).
After American Airlines debuted their system, most other major airlines followed suit, partnering with various travel companies, rental car distributors, and hotels. Frequent flyer programs became much more complicated as the airlines now competed to offer incentives and draw in customers. Many airlines formed alliances with global carriers in areas they did not operate, so customers would receive points or miles for flying with carriers associated with their FFP airline. They also partnered with credit card companies, allowing customers to earn points for each dollar spent on their credit card.
Particularly loyal customers or regular flyers who accrue high numbers of miles are often upgraded to an elite status within the FFP. These higher levels, often branded as gold, silver and platinum, allow greater bonuses for active customers. Free domestic upgrades to business or first class seats, access to exclusive lounges, and doubling the amount of mileage earned for some flights are common benefits for elite customers of frequent flyer programs.
Points can be redeemed for many things other than airline tickets. Some frequent flyer programs have options to donate the money to charity organizations that need airline tickets, such as the Make-A-Wish foundation. They can also usually be redeemed for gift certificates to retail stores, such as Macy’s and Amazon. You may also be able to use them for discounted travel options with other partners, like free nights in hotels or extra days with a rental car.
Understand if you are using frequent flyer programs that you will probably be charged taxes on the purchase, and may even be charged a fee for redeeming your miles at all. You may also be charged a fee if there is not any activity on your account for a long period of time. Some redemptions may be a better value than others; if you have enough for a free domestic flight in the United States, flying to somewhere 3000 miles (4828 km) will be a better value than flying to the next state over.
When choosing a frequent flyer program, try to meet your personal travel needs. If you visit one area repeatedly, make sure you choose an airline that flies there or offers additional rewards for repetitious flights. Frequent flyer programs can be a great asset to any regular travelers looking to save money. Although because of fees, the rewards are rarely actually free, they are often steeply discounted from regular prices, and that can be wonderful.