Friday, January 19, 2018

2018’s Best Frequent Flyer Programs – Custom Calculator #FrequentFlyer

airline_rewards_2018Airline loyalty is hard to come by. Most travelers are willing to jump to another jet for the slightest of discounts. Yet roughly 7% of flights are paid for with points or miles, according to PWC. So there’s obviously value in committing to a carrier. You just have to find the right one.
To help you earn more free flights and other assorted perks, WalletHub compared the 10 largest domestic airlines’ loyalty rewards programs across 23 key metrics, ranging from the value of a rewards point or mile to blackout-date policies.
Here are the best frequent flyer programs:
Frequent Flyer ProgramOverall WalletHub Score
Delta SkyMiles64.14
Mileage Plan50.87
HawaiianMiles49.38
This comparison was based on three hypothetical annual airline budgets: Light ($453), Average ($4,088) and Frequent ($7,722). But you can customize the results to match your own airline budget using the tool below.

Personalized Recommendation

Just enter your annual air travel budget below, and we’ll use the report’s methodology to find your ideal frequent flyer program.
Annual Amount Spent On Airline Travel
Best Program
Delta Air Lines
WalletHub Score: 62.82
Runner-up
Southwest Airlines
WalletHub Score: 51.25

Main Findings

Delta SkyMiles is the best frequent flyer program for the third straight year, earning an average WalletHub score of 64.14% in the three usage scenarios.
Frequent Flyer (7,722)Average Flyer (4,088)Light Flyer (453)Delta Air LinesAlaska AirlinesHawaiian AirlinesAmerican Airlin…United AirlinesJetBlue AirwaysSouthwest Airli…Sun Country Air…Frontier AirlinesSpirit Airlines012.52537.55062.57587.5100WalletHub Score by Flyer Type
AirlineFrequent Flyer (7,722)Average Flyer (4,088)Light Flyer (453)
Delta Air Lines64.0565.5562.82
Alaska Airlines53.6751.147.83
Hawaiian Airlines50.9349.9347.27
American Airlines48.5250.3546.39
United Airlines47.9550.2846.17
JetBlue Airways53.0643.8346.34
Southwest Airlines43.9443.8451.25
Sun Country Airlines37.538.0544.58
Frontier Airlines25.7729.8135.3
Spirit Airlines28.0731.7527.32
 
 

Hawaiian Airlines offers the most rewards value ($19.95 per $100 spent), with Alaska Airlines coming in a close second ($19.87 per $100 spent).
Frequent Flyer (7,722)Average Flyer (4,088)Light Flyer (453)American Airlin…Delta Air LinesSouthwest Airli…United AirlinesJetBlue AirwaysAlaska AirlinesSpirit AirlinesFrontier AirlinesHawaiian AirlinesSun Country Air…$0$2.5$5$7.5$10$12.5$15$17.5$20$22.5Rewards Value by Flyer Type
AirlineFrequent Flyer (7,722)Average Flyer (4,088)Light Flyer (453)
American Airlines$8.23$7.2$5.14
Delta Air Lines$12.9$11.29$8.07
Southwest Airlines$11.64$9.31$9.31
United Airlines$10.05$8.79$6.28
JetBlue Airways$11.15$4.21$4.21
Alaska Airlines$19.87$14.9$9.93
Spirit Airlines$6.62$6.62$3.31
Frontier Airlines$8.36$8.36$8.36
Hawaiian Airlines$19.95$16.03$10.69
Sun Country Airlines$8.4$8.4$8.4
 
 

Four of the 10 largest airlines offered more rewards in 2018 than in 2017, sweetening the pot by an average of 20%.
20172018American Airlin…Delta Air LinesSouthwest Airli…United AirlinesJetBlue AirwaysAlaska AirlinesSpirit AirlinesFrontier AirlinesHawaiian AirlinesSun Country Air…$0$2.5$5$7.5$10$12.5$15$17.5$20$22.5Rewards Value Earned byFrequent Flyer
Airline20172018
American Airlines$8.2$8.23
Delta Air Lines$9.22$12.9
Southwest Airlines$9$11.64
United Airlines$8$10.05
JetBlue Airways$12$11.15
Alaska Airlines$20$19.87
Spirit Airlines$8$6.62
Frontier Airlines$9$8.36
Hawaiian Airlines$21$19.95
Sun Country Airlines$8$8.4
 
 

Delta Air Lines and JetBlue Airways are the only two major airlines whose miles do not expire because of inactivity.
Miles do not expireMiles expire afterinactivity of 24 to 36monthsMiles expire afterinactivity of 12 to 23monthsMiles expire afterinactivity of 3 to 11months20%20%30%30%
InactivityPercentage
Miles do not expire0.2
Miles expire after inactivity of 24 to 36 months0.3
Miles expire after inactivity of 12 to 23 months0.3
Miles expire after inactivity of 3 to 11 months0.2

7 out of 10 airlines do not impose blackout dates on tickets purchased with miles.
Blackout dates do notapply to award travelBlackout dates apply toaward travel30%70%
Blackout DatesPercentage
Blackout dates do not apply to award travel0.7
Blackout dates apply to award travel0.3

40% of airlines will retroactively credit members with miles earned on a flight for up to 12 months after the fact.
1 - 5 months back6 - 11 months back12 months and above30%40%30%
Retroactive PeriodPercentage
1 - 5 months back0.3
6 - 11 months back0.3
12 months and above0.4

6 out of the 10 largest U.S. airlines allow rewards-program members to earn and redeem miles with partner carriers.
United AirlinesDelta Air LinesAmerican AirlinesAlaska AirlinesJetBlue AirwaysHawaiian Airlines051015202530354045Frequent Flyer Partnerships
AirlineNumber of Partners
United Airlines38
Delta Air Lines28
American Airlines26
Alaska Airlines17
JetBlue Airways7
Hawaiian Airlines6
 
 

*The following airlines are not represented in the chart, as they do not have frequent flyer partnerships with other airlines: Southwest, Frontier, Spirit, and Sun Country airlines.

Airline miles cost an average of 62% more than they’re worth when purchased rather than earned.
Spirit AirlinesFrontier AirlinesAmerican AirlinesUnited AirlinesHawaiian AirlinesDelta Air LinesAlaska AirlinesJetBlue AirwaysSouthwest Airlines0%12%24%36%48%60%72%84%96%108%Markup on Purchased Miles
AirlineMarkup
Spirit Airlines79.83%
Frontier Airlines76.08%
American Airlines67.77%
United Airlines66.61%
Hawaiian Airlines59.3%
Delta Air Lines57.13%
Alaska Airlines54.59%
JetBlue Airways52.52%
Southwest Airlines43.55%
 
 

*Sun Country Airlines does not allow for the purchase of miles.

Detailed Scoring

The following table illustrates the number of points that each airline rewards program received in the scoring categories included in our methodology.
Scoring CategoriesMaximum ScoreAmerican AirlinesDelta Air LinesSouthwest AirlinesUnited AirlinesJetBlue AirwaysAlaska Airlines**Spirit AirlinesFrontier AirlinesHawaiian AirlinesSun Country Airlines
Frequent Flyer Program-AAdvantage programSkyMilesRapid RewardsMileagePlus ProgramTrueBlueMileage PlanFREE SPIRITEarlyReturnsHawaiianMilesUfly Rewards
Number of daily flights7.007.006.014.164.691.011.220.460.270.220.00
Number of countries served5.004.405.000.553.971.660.121.150.030.380.03
Number of destinations served5.005.004.771.134.831.161.420.520.830.040.21
Partner airlines earning and redemption3.001.892.170.003.000.320.990.000.000.430.00
Number of daily flights3.001.802.600.002.513.001.350.000.000.550.00
Number of countries served1.000.480.570.000.771.000.400.000.000.130.00
Number of destinations served1.000.560.690.000.901.000.470.000.000.180.00
Value earned -Frequent Flyer20.003.249.938.125.857.4219.890.953.4320.003.49
Value earned - Average Flyer20.005.5712.269.038.180.6918.164.637.4620.007.53
Value earned - Light Flyer20.005.6113.2016.448.573.1918.050.8613.9620.0014.07
Miles expiration7.001.877.002.601.877.002.600.040.401.874.07
Booking blackout dates7.007.007.007.000.007.000.007.007.007.000.00
Advance booking3.002.632.631.582.691.902.621.930.922.631.69
Short-notice booking fee3.000.003.003.000.003.003.000.000.003.003.00
Earning limits2.000.000.002.000.002.002.002.002.002.002.00
Earn miles when booking through 3rd party websites6.006.006.000.006.006.006.006.006.006.006.00
Layover in award flight5.000.000.005.005.000.005.005.000.000.005.00
Expired-mile reactivation1.000.001.000.000.001.000.000.000.000.000.00
Retroactive flight credit for members3.001.290.861.290.431.291.290.000.430.140.00
Retroactive flight credit for non-members1.000.000.001.000.001.000.000.000.450.270.18
Award-ticket redeposit fee3.000.000.003.000.000.000.000.000.000.000.00
Ease of achieving elite status3.000.850.331.010.942.321.312.363.002.422.32
Transferring miles between accounts1.000.000.000.000.001.000.000.000.000.001.00
Membership perks - Frequent Flyer5.004.504.502.504.503.004.000.671.003.673.50
Membership perks - Average Flyer5.004.003.671.504.500.503.170.671.002.670.00
Membership perks - Light Flyer5.000.000.001.500.000.500.000.000.000.000.00
Purchasing Miles5.000.000.000.000.000.000.000.000.000.005.00
Score not based on consumer spending75.0040.7849.6233.3137.6042.6429.7826.4621.3427.2730.51
Frequent Flyer Score100.0048.5264.0543.9447.9553.0653.6728.0725.7750.9337.50
Average Flyer Score100.0050.3565.5543.8450.2843.8351.1031.7529.8149.9338.05
Light Flyer Score100.0046.3962.8251.2546.1746.3447.8327.3235.3047.2744.58

Ask The Experts: Assessing The Value Of Frequent Flyer Programs

With a quantitative analysis in hand, we turned to a panel of leading hospitality and consumer studies experts to learn more about the inner-workings of frequent flyer programs and how they affect the way we travel. You can check out their bios and responses to the following questions below.
  1. Who benefits more from airline rewards programs: consumers or the airlines themselves?
  2. To what extent do airline rewards programs influence consumer behavior?
  3. How do you think mergers, acquisitions and alliances of individual brands impact airline loyalty?
  4. To what extent, if at all, do you expect airline rewards programs to change in the next 5 to 10 years?
  5. Why are each airline's miles worth different amounts? How does this affect consumers?
Back to All Experts

Subodh Bhat

Professor of Marketing at San Francisco State University
Subodh Bhat
Who benefits more from airline rewards programs: consumers or the airlines themselves? 

The airlines benefit financially from the loyalty or patronage of their consumers (more business = more profits) and from the resultant taking of market share from competing airlines (less competition = more profits). The consumers benefit in terms of their award for their loyalty but may often need to evaluate the personal trade-offs they make (e.g., less convenience, longer routes when they choose airlines with loyalty programs they belong to as opposed to more optimal airline choices). Generally, the airlines come out ahead. 

To what extent do airline rewards programs influence consumer behavior? 

Considerably. Consumers often make airline choices based on the frequent flyer miles, even when the choices are not optimal in terms of convenience, time spent, flight arrival or departure time, etc. 

How do you think mergers, acquisitions and alliances of individual brands impact airline loyalty? 

I don't believe consumers are passionate or even have strong preferences for one airline over another unlike with other consumer brands like Apple. As such, I don't believe consumers are too concerned about loyalty to a specific brand in airline mergers, but probably just wonder how their frequent flyer programs are going to be affected. 

Why are each airline's miles worth different amounts? How does this affect consumers? 

An airline miles' worth is based on rational factors such as the type and variety of awards available, extent of awards (e.g., domestic flight at 35,000 miles v. 50,000 miles), and extent or lack of restrictions.
Back to All Experts

Amna Kirmani

Professor of Marketing in the Robert H. Smith School of Business
Amna Kirmani
Who benefits more from airline rewards programs: consumers or the airlines themselves? 

Although both benefit, I am sure airlines benefit more than do consumers. That's why they have them. Consumers benefits individually, but airlines benefit in the aggregate. 

These rewards programs are offered to entice consumers to become loyal as well as to reward consumers who remain loyal. Consumers can get used to the perks very quickly. 

To what extent do airline rewards programs influence consumer behavior? 

Although they are called "rewards," these programs are as much incentive as they are reward. 

Airlines rewards programs (like rewards programs in other industries) make it more difficult for consumers to switch to other carriers. The reward program makes consumers look first at that airline's offering on any route; consumers may even be willing to pay more (or put up with an inconvenient route) to travel on that airline. This kind of behavior is especially likely as consumers near an important goal, e.g., achieving the next status level. 

In turn, what consumers expect and enjoy are the following: 1) the concrete benefits (e.g., free baggage, earlier boarding, upgrade); 2) the feeling of status (I'm special). In fact, as you go up the status levels, it becomes harder and harder to switch to a different carrier. That is because the benefits get larger and harder to give up. I've heard people say that xxx airline sucks, but they travel on it because they have high status. 

Why are each airline's miles worth different amounts? How does this affect consumers? 

These miles are worth different amounts because each airline has developed a different system over time. Some reasons are just institutional (i.e., based on the airline's infrastructure, the managers who developed the initial program, etc.). For consumers, it's all quite confusing. It's even more confusing since the airlines changed their system from miles-based to money-based (Starbucks did the same with its loyalty program.) Now, United, for instance, gives you miles based on how much you paid for the ticket. I can't figure it out, and I don't have the time or energy to delve into the exact system. I feel they've made it opaque on purpose. And it's hugely beneficial for them.

Methodology

This report compared the frequent flyer programs operated by the 10 largest airlines in the U.S., based on number of passengers, using publicly available information and company policies posted online. We did so for three different consumer profiles, designed to illustrate how programs compare across spending levels. Where policies were incomplete or ambiguous, we confirmed them with the respective airline’s customer service department. Once data collection was complete, we reached out to the public relations departments of each airline to confirm our findings. However, Spirit Airlines, Alaska Airlines and Sun Country Airlines either did not meet our deadline for input or did not provide any corrections regarding company policy and pricing.
The scoring framework used to evaluate each program, and ultimately identify the best option for different types of consumers, can be found below. Generally, full points were awarded to the best-performing program for that metric, while the zero-point level was set slightly below the worst program’s value. Most of the metrics were first graded on a 100-point scale. Point allocations for more-binary metrics that did not use this 100-point scale are explained below. Airline ticket cost data is accurate as of January 12, 2018.
Consumer Profiles: We created three consumer spending profiles (Light, Average and Frequent) to evaluate how well each airline meets the needs of travelers with varying budgets. We based the airfare budget of a “Light” flyer on travel expenditure data from the U.S. Bureau of Labor Statistics and household income data from the U.S. Census Bureau. We determined the budget of a “Frequent” flyer by applying average airfare rates to a travel schedule that comprises monthly domestic flights supplemented by an annual trip abroad. The “Average” flyer’s budget was determined by averaging the “Light” and “Frequent” flyer’s budgets. Exact values can be found below.
  • Light Flyer: Spends roughly $453 on annual airline travel.
  • Average Flyer: Spends roughly $4,088 on annual airline travel.
  • Frequent Flyer: Spends $7,722 on annual airline travel.

1. Airline Coverage (total score: 17 points)
    a. Number of daily flights (max score: 7 points)
    We collected the average number of daily flights by the individual airlines according to their official websites.
    b. Number of countries served (max score: 5 points)
    We tabulated the total number of countries served by each airline directly (i.e., not including countries served by partners/alliances).
    c. Number of destinations served (max score: 5 points)
    We determined the total number of destinations served by each airline directly (i.e., not including destinations by with partners/alliances).
2. Partner Coverage (total score: 8 points)
We chose to grade partner airlines separately in order to avoid overlapping data and the resulting double counting. However, the strength of a given airline’s partnership network is indeed relevant to the value of its rewards program, so it was important that we take this into account where possible.
    a. Partner airline earning and redemption (max score: 3 points)
    We collected the total number of partner airlines that allow you to both earn and redeem miles. Partners with which you can only earn, not redeem, received ½ the points.
    b. Number of daily flights (max score: 3 points)
    We added together each partner airline’s average number of total daily flights.
    c. Number of countries served (max score: 1 point)
    We tabulated the total number of countries served by each airline’s partners/alliance-mates.
    d. Number of destinations served (max score: 1 point)
    We determined the total number of destinations served by each airline’s partners/alliance-mates.
3. Value Earned per $100 Spent (total score: 20 points)
Three underlying components are required to calculate how much value a user would derive from one year of membership in each airline’s rewards program: i. Amount Spent, ii. Miles Earned and iii. Redemption Value. In other words, if you spend X amount, you will earn Y miles, which can be redeemed for Z dollars in airfare. Below we will explain how we calculated each component.
    i. Amount Spent: We used the aforementioned consumer spending profiles to determine how much Light, Average and Frequent flyers spend on airfare each year.
    ii. Miles Earned: The task of determining the number of miles that each type of flyer would earn with each airline was complicated by the fact that there are two ways to earn. Some airlines provided a certain number of miles per dollar spent (e.g., 3 miles per every $1 spent), in which case overall earnings can be determined with simple multiplication. But others allocate earnings based on the number of miles a member flies (e.g., 1 rewards mile per 1 mile flown). For the latter group, we collected the prices of round-trip tickets (economy fares) for popular routes from the airline’s hub. Ticket prices were obtained for weekend travel during each destination’s high and shoulder travel seasons. In all cases, ticket prices were collected at least one month in advance. For each route, we then collected the round-trip distance between the two cities in terms of miles. Finally, we divided the average distance by the average ticket price, thus obtaining per-dollar pay-out rates for the airlines that rely on a mileage-based system. Multiplying these ratios by the amount each type of traveller spends gave us each person’s overall earnings with each airline.
    Note: Temporary promotions, such as holiday deals or bonus miles for reservations made on specific websites, were not taken into account. Earning rates were calculated for the second year of program membership.
    iii. Redemption Value: In order to determine the redemption value of a mile earned from each airline, we divided each airline’s average ticket price in dollars by the average number of miles needed for an award flight. Taxes and surcharges were deducted from the dollar value of the award flight if miles did not cover them.
    iv. Value Per $100 Spent: To calculate the overall value each type of flyer would earn per $1 spent, we multiplied the number of miles earned by the respective airline’s redemption value and divided by the consumer’s annual spend. For example, assuming that an airline offers 3 miles per $1 spent and its miles are worth two cents apiece, a “Light” flyer would earn roughly $27.2 in free airfare over the course of a year ($453 * 3 *0.02). And that translates to $6 in value per $100 spent ($27.02 / $453 *100).
4. Miles Restrictions (total score: 33 points)
    a. Miles expiration (max score: 7 points)
    We determined if and when miles expire due to account inactivity with each loyalty rewards program.
    b. Booking blackout dates (max score: 7 points)
    • If a rewards program does not have blackout dates for award flights = Full points
    • If a rewards program has blackout dates = No points
    c. Advance booking (max score: 3 points)
    Airlines allowing members to redeem miles up to one year in advance received the highest scores, while those that allow award flights to be booked only 90 days in advance received no points.
    d. Short-notice booking fee (max score: 3 points)
    • If the airline does not charge a fee for booking an award flight within 6 days of departure = Full points
    • If the airline charges a fee for booking an award flight within 6 days of departure = No points
    e. Earning limits (max score: 2 points)
    • If the airline does not impose any limit on earning miles = Full points
    • If the airline imposes an annual or per-transaction limit on earning miles = No points
    f. Earn miles booking through third-party websites (max score: 6 points)
    • If the airline allows you to earn miles on flights booked through third-party websites = Full points
    • If the airline does not let you earn miles on flights booked through third-party websites = No points
    g. Layovers in award flight (max score: 5 points)
    • If miles can be used to book flights that include layovers = Full points
    • If miles cannot be used to book flights that include layovers = No points
5. Additional Features & Policies (total score: 22 points)
    a. Expired-mile reactivation (max score: 1 point)
    • If the airline allows you to reactivate expired miles for free = Full points
    • If the airline allows you to reactivate expired miles for a fee = No points
    b. Retroactive flight credit for members (max score: 3 points)
    • If the airline allows retroactive mile credits to be claimed for flights taken in the last 24 months = Full points
    • If the airline provides retroactive mile credits only for flights taken less than 3 months ago = No points
    c. Retroactive flight credit for non-members (max score: 1 point)
    • If the airline allows retroactive mile credits to be claimed for flights taken in the last 12 months = Full points
    • If the airline provides retroactive miles credits only for flights taken less than 1 months ago = No points
    d. Award-ticket redeposit/cancellation fee (max score: 3 points)
    • If the airline does not charge a fee to re-deposit miles in the event of award ticket cancellation = Full Points
    • If the airline charges a fee to re-deposit miles in the event of award ticket cancellation = No points
    e. Ease of achieving elite status (max score: 3 points)
    We calculated the amount that a member of each airline’s rewards program would need to spend on a monthly basis in order to accumulate the requisite miles for top membership status. Spending assumptions reflect the lowest economy fares.
    f. Transferring miles between accounts (max score: 1 point)
    • If the airline allows program members to transfer miles between their accounts for free = Full points
    • If the airline only allows spouses to transfer miles between accounts for free = 0.5 points
    • If the airline charges a fee to transfer of miles between accounts = No points
    g. Valuable membership perks (max score: 5 points)
    After examining all of the airline rewards programs, we created a list of membership perks that we believe to be most valuable for consumers. We then used our consumer profiles to determine which perks each type of airline patron would receive based on the membership-status level for which they could expect to qualify.
    • Free checked baggage = 1.5 points
    • Complimentary upgrades = 1 point
    • Priority check-in/security/boarding = 1 point
    • Complimentary companion upgrades = 0.5 point
    • Expedited baggage services = 0.5 points
    • Free in-flight Wi-Fi = 0.5 points
    h. Purchasing Miles (max score: 5 points)
    In order to determine whether members of each airline rewards program can purchase miles at fair value, we calculated the cost of buying the maximum number of miles permitted by each program as well as their average redemption value.
    • If the airline earns a profit of 25% or less on the transaction = Full points
    • If the profit margin is higher than 25% = No points

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