Some interesting insights into how people use their frequent flyer miles

I am spending three days this week at the Loyalty 2017 conference in London and will be giving a talk on Wednesday.

Yesterday a representative from trade group IATA presented some results from their regular survey of frequent flyer programme members.  What is interesting about this is that it includes members of many different schemes, not just one specific programme.

These were the results to the question:  “How have you used your miles over the last 12 months?”.  The total is over 100% due to the ability to select multiple answers.

  • 37% – flight in my usual travel class
  • 29% – have not used my miles in the last 12 months
  • 28% – class upgrade
  • 17% – flight in a higher class
  • 13% – flight on a partner airline in my usual class
  • 7% – shopping
  • 6% – flight on a partner airline in a higher class
  • 6% – did not use before they expired
  • 4% – hotel stay
  • 4% – transferred miles to another programme
  • 4% – paid for excess luggage
  • 3% – leisure reward
  • 2% – car rental
  • 2% – donated miles to charity

There are a few interesting points here.  One is that, despite the efforts of airline programmes to introduce non-flying redemptions, the vast majority of members still redeem for flights.

As flight redemptions are likely to be more expensive than the other types of reward listed, the percentage of miles redeemed for tickets will be even higher.

I am surprised that more people did not redeem for a higher cabin reward, but that is presumably down to a) higher cabin rewards being more expensive and b) the fact that travellers who usually fly economy won’t be earning that many miles and would find it harder to get enough for a higher cabin redemption.  Those who regularly fly in First or Business would also not be able to redeem for a ‘higher than usual’ cabin!

IATA

Here is a second set of figures given in answer to the question:  “What are your top ideas to enchance frequent flyer programmes?”.  It wasn’t clear if respondents were given a shortlist or could write in an answer.

  • 44% – last minute upgrade for lower amount than usual
  • 19% – last minute offers for flight bookings at lower amounts than usual
  • 13% – allow a combination of cash and miles to purchase flights
  • 10% – able to book a seat when no reward seats are available
  • 6% – auction upgrades for miles
  • 5% – converting points into cash
  • 3% – able to spend miles on ancillary charges such as excess luggage
  • 1% – spending in medical facilities (I have no idea what this means – I can only imagine IATA surveyed people globally)

I’m not sure that the first two make economic sense.  Allowing last minute bookings for miles at all risks losing hugely profitable last minute cash bookings from the business market.  Letting those seats go for miles at a discount, whether via upgrades or a direct booking, seems odd.

Of the next five ideas, it is interesting to note that Avios / British Airways offers three of them to one degree or another.  Gold members can force open seats for double Avios for a Gold Priority Reward (I used that last week for our Salzburg ski flights and I met others who had done the same) and you can now use points for buy on board food.  ‘Part Pay With Avios‘ is also now well established.

We will have to wait a while before we can use our Avios for ‘spending in medical facilities’ however …..

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Comments

  1. All I ever wanted was to use Avios in medical facilities #dreamredemption

    • I have a Euro 95 medical bill from last week – I could pay it with Amex MR points using statement credit!

      Doubt I will claim it on insurance as the trouble in explaining that I was injured in a ski resort whilst not skiing would be too complex :-)

      • A little more information on this this non-skiing injury/incident would be helpful Rob!

      • Pretty painless online claim process with Amex ICC (did recently for my Dad!).

        I’m happy to be paid in Avios for medical advice/treatment 😛

      • Michael Jennings says:

        If it makes you feel better, I managed to have an accident resulting in a serious injury in a bar while not drinking.

  2. Aren’t class upgrade and flying in a higher class amounting to the same thing? If you add the two responses together then you have almost half of those taking part aspiring to use their points towards flying in a premium cabin of some description. Add on those you’ve identified as premium cabin fliers redeeming for their usual cabin then that’s somewhere between 60-70% of those surveyed who’s ultimate goal is accruing/redeeming for an upgraded flying experience.

    • Ultimately the same but different way to achieve it. One is paying the full amount of avios and then fees (ie mucho Avios, less money), the other is buying eg premium economy then upgrading (less avios be more money).

      It helps differentiate between those who spend more Avios and those who spend more money.

  3. I am always baffled by the fact that first and business class redemptions feature so much in headforpoints. I would think the majority of readers are occasional flyers e.g. 3-6 return flights per year (mixed leisure/business usually economy and Europe). Perhaps earn about 15K-30k Avios per year.
    We are the silent majority, the forgotten ones by the Avios elites (sorry for the hyperbole, seems to work for some).

    • I always see the elusive upgrade as the ultimate aspiration as far as points redemption goes. Getting something for points that would otherwise cost (in some cases) a lot of extra cash is my main driver. The value perception means a lot to me and assists me in justifying trips I may be sitting on the fence about. I guess we all approach the subject from different directions and as such have different priorities and aspirations. It means the economy traveller who has been saving points for a couple of years is just as important as the frequent flyer who aspires to First and Business. It also means if 60-70% of points collectors are after an upgrade as per my calculation then you have a higher chance of redeeming for something you want than I do. Power to the silent minority…. ☺

      • I definitely collect miles so I can do trips I couldn’t afford otherwise. Back in the tax-free airmiles days that meant flying economy, now it means flying business class for roughly the price of economy. It’s hard to go back to economy once you’ve experienced business class!

    • Monopolies commission says:

      I intrepret those top two as people want better value for their upgrades.

      Considering a lot of airlines only allow an upgrade from a flexible booking class into a restricted business class fare, and some then whack an increased fuel surcharge to boot, its not surprising people want to upgrade at the last minute for fewer miles.

    • Hingeless says:

      Frenske: “15K-30k Avios per year”, i hope people are getting a lot more than that, my average is over 500k per year.

      You would have to be particularly bad at this hobby to not get enough to fly occasionally in a flat bed.

      • I would suggest many households would/could get around 100-150k a year without chasing it too hard. I get about 150k without chasing hard but I do have around £10k of cc spend purely for work purposes. If I switched all spends to cc and started shopping at Tesco I could generate probably another 150k easily.

        • I agree. I don’t do any business travel or spending, but I’ve amassed 50,000 avios in the past 6 months on Amex spending, sign-up bonus and Clubcard conversions. I also treated myself to a few thousand booster avios when BAEC had the 25% bonus offer. Additionally, I’ve started doing all my internet shopping via avios.com and have around 10,000 in that account. As a result of last year’s collecting I’ve got 6 return redemption flights booked for this year (despite being mucked about to some tune by BA changing and cancelling some of these, but that would have happened even if they were cash bookings), two in ET, two in CE and two in CW to the Caribbean.

          You can get avios with virtually any spend – I’ve just realised I can pay my council tax on my Lloyds Mastercard so will be cancelling my direct debit next month, and the spend will be going towards my upgrade voucher!

      • It depends how dedicated a collector you are, though. Lots of people don’t focus all their spending activity to earn Avios, they just pick up the occasional points here and there.

        • True, and how much of your spending you control. I collect about 100k a year in non-flight earning but could nearly double that if I could get my wife to the same mindset. We are taking a Club World trip to Dubai – after that I may have to sort out a long haul overnight in Economy see if I can get her to agree that the minor changes are more than offset by never having to travel at the back again.

          • @Robbie. What’s the reluctance from your wife? I keep things simple with Mrs G and put one Amex and one non-Amex in her purse; “use the Amex where you can and the IHG card where you can’t”. Easy. You then do all the admin. My wife hates cancelling cards in her name but thinks it’s worth it for the J and F travel and quality hotel stays.

          • I do that for my husband…cards in wallet, tell him which ones to use, keep a track of when to cancel,churn etc etc. I do the flights and hotels, he does the itinerary, once we get there. Works for us. He has becone accustomed to turning left!

    • On long haul economy redemptions the charges often come to approx. the same as a cash fare (probably not BA).

      • That’s why I save them for CW – or pick a destination with few flights and therefore higher fares from BA (e.g. Cayman Islands, Turks & Caicos).

    • You would be a bit of a mug to redeem long haul Y.

      If the taxes went away I would change the focus a bit.

      • There are the odd exceptions – last minute redemptions when cash fares are through the roof – but I suspect a lot of people who are not dedicated collectors/frequent flyers are happy to use Avios for a £100 reduction over cash fare prices.

      • “Taxes” ?
        There is some APD but for long-haul Y that is about a quarter of what BA charge?
        I suggest “surcharges” is more appropriate.

      • the real harry1 says:

        presumably (haven’t done it) redeeming in Y ex EU where you actually like the place you use as your European airport, might be a different calculation?

        ie you position/ go spend a day/ some days in a European place you like/ you redeem in Y without BA’s fees, for a decent discount/ valuation of Avios

        & reverse on the way back

    • Thunderbirds says:

      Frenske, unfortunately I think some on this site seem to assume that everyone has access to collecting via some or all of the main sources of Avios, for example
      1. Can get a credit card (with the ability to spend and churn)
      2. Fly/Stay in hotels/Hire cars paid for/refunded by their employer
      3. Live close to a Tesco
      4. Have salary high enough for self funded travel
      5. Are self employed
      6. Etc..
      Unfortunately some don’t. My circumstances changed, I moved to a new job and live in Spain. I was surprised how that put a dent in my ability to earn.

      • I moved to Spain too, Reduced my earning ability for a bit but once I got to grips with IB+ I was back up and earning well.

        A great earner (If it is in your city) is El Tenedor which is a restaurant booking app. I have booked a table for coffee before and so been able to pick up 250 Avios for about 5€ of cost (Some of the places have a minimum spend to use the app but sometimes it can work) Also the Iberiaplusstore has very handy retailers on it such as El Corte Ingais and Just Eat I probably use it at least twice a week.

        • Thunderbirds says:

          Great thanks I’ll take a look at that App. Yes there are upsides. I do benefit from The Economist subscription via Iberia. Also I live close to the border with Gibraltar so I don’t cry when I fill up my car..!
          I would benefit from lower tax Iberia flights but I’m married so generally redeem my Avios using 241 with BA or pay for Ex-Europe flights without the hassle of needing to buy re-positioning flights.

        • Do you just download the app or need a link from Iberia? Not moved to Spain but have an apartment in Javea

    • I used to be in that category, and could never find anything useful to do with the points. Not surprising really as 20k points is only about £200 worth – its hard to give much advice about how to maximise the benefit of a couple of hundred quid.

      The game changer is the possibility of credit card welcome bonuses. 100,000 points really can get you some great redemptions, upgrades etc. It only takes 3 or 4 credit card cycles to get this amount, but you need to be diligent to follow the rules and take your opportunities – hence the value of HfP and FlyerTalk sites.

      • Well I am active in getting value for money/points. Which does not necessarily maximum Avios e.g. Tesco vouchers are used for Eurotunnel/Ferry crossings not Avios.
        Nor do I churn as often as I could. My wife is not cooperative.

  4. A better (but long winded) question….

    “Do you redeem miles for flights in a higher class than you would have normally previously bought a cash ticket for.?”

    Before I got into this game and started turbo charged collecting my miles via HFP tips, we typically did a max of 2 long haul per year in Economy, v occasionally in PE in a sale.

    Over the last 5 years that has changed, I aim to redeem in a minimum of PE, with 50℅ of flight sectors in a class with a flat bed, so BA CW or VS UC. Long haul Economy is still done but accounts for 5℅ of sectors.

    As yet I’ve never bought a cash ticket for business class, even in a sale.

  5. “I’m not sure that the first two make economic sense”

    Surely there are a number of routes where last minute business fares are rare? Thinking of Caribbean and other “holiday only” destinations

    I would be a huge fan of “pop off to St Lucia next week for cut price redemption” at low seasons for example

    • Barry cutters says:

      Just remember doing that would eliminate upgrades at the gate for us tho.
      Last year I must have been upgraded for free at least 12 times. Both ways on an ex bmi a321 to Istanbul. And wtp to club world on a load of east coast flights – to the point where I actually stopped booking club worlds because the chances of an upgrade were so high. Although for west coast I still booked business as wasn’t willing to take the risk.
      Saying that . Aa have the request an upgrade function, but iv still been upgraded on the a321 from business to first from JFK to lax. And again on my only long haul economy flight last year from Heathrow to lax on their 77W.

      I guess I’m saying I’d rather not have upgrades for auction at the gate , as I’m sure it would decrease free upgrade chances in the future

      • Barry, are you BAEC Gold or GGL? I didn’t realise BA were so generous with upgrades like AA is for it’s members.

        • BA actually seem to more frequently give upgrades to non-status members, perhaps as a way to entice them to consider an upgraded class of travel next time?!

    • I would have thought that the first option makes some economic sense if it meant turning up at check-in and upgrading at a discount if there is availability. Surely there must be a few flights where this was an option? I don’t know how full Business/First class gets on, particularly off-season, flights as I have yet to fly in these cabins.

  6. OT: Anyone got their bonus clubcard points from using payquiq app from the most recent promo.
    I completed 10 x transactions nearly two weeks ago but nothing posted as yet, I don’t know if I should contact them.

    • TGLoyalty says:

      Yep been getting them as I’ve been using it over past 2/3 weeks

      You were targeted via email?

    • Looking at my 3 transactions on the 14th of Feb 150 bonus cc points were awarded on the 15th. Is there an additional bonus to this on completion of 10 transactions.

      • I’ve been getting 150 cc points per day it seems and I wasn’t targeted.

        • I logged on to my tesco clubcard account last week and it seems all my points have been sent out to me in a little booklet. Does anyone know if I can undo this or is it too late?

          • That’s how it always works – you can still spend them online though for Clubcard perks, etc so it doesn’t make any difference.

  7. 6% failing to use their miles before expiration is a shocker in my view. As bad as miles-charity options usually are, I wish they would take the time to do it if all other options fail.

    • I have 1000 Etihad and 500 Lufthansa miles expiring in a couple of months. Can’t remember where they came from, but there’s no decent options for anything that small. I think I used some Etihad miles on a raffle to win GP tickets, or something similar. But lack of reasonable earnings opportunities coupled with very strict expiry rules mean they are mostly worthless.

      I would donate small balances to charity, but there’s usually a minimum limit I never reach. Even transferring them to other HfP readers would be acceptable if it were possible.

  8. I was awarded 600 bonus CC points I believe on 4 or 5 minor spends but none recently.

    • I got that as well, no idea why.
      Been getting the 50 Pts bonus as well on other accounts.

  9. Richard Thomas says:

    only slightly OT: Rob, I wonder whether you have ever considered doing a survey of how readers of the site use their miles? Possibly it’s quite different from the IATA survey results.

  10. OT/ not seem this mentioned, not sure if its targeted?

    IHG

    “Combining Points & Cash allows you to reach Reward Nights without the wait. As a Spire Elite member, you’ll save 15% on Points & Cash bookings* made now until March 30th, 2017 and all stays before April 30th, 2017.”

    via a search it seems:
    5% for club
    10% for Gold
    12% for Platinum
    15% for Spire

    • Thinking this is better than the buy 100% bonus? (that has just ended)

      Buy points = 20,000 = $250 (last week $125?)
      50,000 point property, 30,000 + $106.25 (as Spire)

    • This was mentioned in the comments yesterday.

  11. Re:- last minute upgrade for lower amount than usual

    Not exactly last minute, but Miles+More have been doing this for years. 50% discount on miles required is potentially available from 15 days before departure. Obviously not always an option though, you just have to check.

    They also have a range of bargains each month. Until this year there seemed always to be some flights available to Germany for only 10 000 miles, and you could pay the taxes with miles too.

  12. When did IATA become a trade group? I understand they write the rules for a large number of airlines and cargo carriers.

    Last time I had dealings with IATA it was doing Dangerous Goods consigning; I used their book for UN numbers and specifications for DG notes and Airway bills, all that interesting stuff!! Hhhmmmm.

  13. Just been denied EU compensation for a flight delayed 12 hours because they say it was weather and outside their control. The weather delay was on an earlier flight that had a knock on effect and because of this they couldn’t get a departure slot for my flight before the crew timed out. Also worth noting the plane that I was supposed to be on was due to land at Manchester but had to divert to Liverpool because they’d missed their landing slot and didn’t have enough fuel to circle. Worth perusing?

    • Definitely case law to suggest weather in another location is not an excuse. I think the case suggested that airlines should be aware of such risks and thus have planes on standby where necessary.

    • Not sure about the weather issue, but my recent research suggests that they would have been obliged to get you to Manchester regardless of eligibility for compensation. We were diverted from Lanzarote to Fuerteventura due to high winds last year; we weren’t eligible for compensation for our (very late) arrival at our original destination, but Ryanair did have to get us to there, albeit they took the cheapest and most drawn-out option involving a bus and a ferry!

      • We were in Manchester waiting for a flight to Amsterdam. The plane we were supposed to be in was incoming from Geneva but left there late. They then missed their landing slot at Manchester because of this. There was fog at Manchester so although planes were landing and taking off there were reduced landing slots and the plane didn’t have enough fuel to wait for the next landing slot, after missing its original slot so diverted to Liverpool. Hence by the time the plane landed at Manchester the crew were out of ours and our flight was delayed until the next morning. We did get to Amsterdam the next day.

  14. Its interesting to see how people earn a higher numbers of Avios, I assume this is primarily with business flights or card churning.

    As a leisure traveller with no employer funded points booster (or self employed for that matter) I rely on the drip drip of Tesco and Amex spend with CC churn to give a lower turnover than some in this addictive hobby.

    Is it possible to achieve Gold status as a Leisure traveller, so that flight based avios earnings would be more productive? If so I need a tutorial (I’m sure there will be one somewhere).

    Also where am I missing out to achieve that ‘easy’ 500K points per annum?

    • See the FT thread on TP runs if you would like Gold as a leisure traveller :)

      • Thanks Alan, I have glanced at these and thought it was a lot of hassle/fun for the end result but maybe I’m missing a trick.

        • Personally I found it worth it. My year reset and having been abroad for a year I was getting a soft landing to Silver. Business/First trip to Hawaii for a holiday then San Francisco in Club a few weeks later, voila back to Gold for over 2 years. Sure I took a less direct route to maximise TPs, but between lounges and in-flight dining/drinks it wasn’t much of a hardship. Even went to see a show on Broadway and used the Hilton VISA voucher for an overnight stay at Tiers Square en route to SFO 😉

  15. Harry I do buy avios when there is a bonus offer on but I’m never sure if I’m actually getting value for money on them, though I’m more than happy with the CE and CW redemptions I’ve had so far. Can you give us a couple of examples of redemptions which would make it worth using avios you’ve paid for? Obviously the value is enhanced with a 2 4 1 or an upgrade voucher. Thanks.

  16. Our current spend achieves 241’s every 8 months or so, to be used on x3 CW flights in 2yrs. This is using x2 BAPP with one churned Platinum and one Gold per annum. But I always seem to be chasing points rather than waiting for 241’s.

    I only buy avios when I need a top up to get to where I want at the time, never buy to boost the account as I’m a stingy git, but again maybe I’m missing out.

  17. the real harry1 says:

    Sure – but it’s boring compared to exotic destinations. I currently exclusively use Avios to save money on trips out to our European place in the sun – 5 of us x Xmas, Easter, May/June half-term, summer hols, sometimes Autumn half-term = potentially 52 flights pa (as my wife comes out twice in the summer hols). This means 2-4-1 is pointless for us.

    Nearly all in peak = 7500 Avios, therefore potentially 375,000 Avios requirement pa.

    I book T-355 to make sure I get the timing I want – there can be 4 flights a day, the best timings & days can go quickly, particularly the obvious ones because it’s the start & end of school hols, which dates in the state system at least do tend to all be within a day or so of each other across the UK.

    When I use Avios + RFS fee to buy the flights, I always without fail check what value I am getting from the points. Ie I compare the Avios redemption cost vs the cash alternatives, HBO, + luggage, CE. I am obviously looking for the cheapest option. I wouldn’t dream of burning Avios giving me a value below 1p, given the effort involved in collecting them, even though I worked out a while back that my real aggregate cost of collecting them is some way below 0.5p. In practice, I’ve generally been getting 1.3-1.5p by buying T-355. As there are sometimes 5 of us, with 4 ET seats released I have to buy a cash ticket anyway (wouldn’t dream of adding on 1 CE fare for a flight under 3 hrs!) so normally go for HBO, because even at Xmas we don’t need 5 pieces of checked luggage.

    And my wife often travels at different times due to work, just the other day it was obviously better to go for a £69 HBO fare for her in the summer hols. Even if you value Avios @ 7p, that’s (0.7p x 7500) + £17.50 = £70, but as I said, given the effort in collecting them, silly to let them go that low.

    I have been caught out checking the same flights later, as whilst on the day T-355 the Avios redemptions were always cheaper, BA has an annoying habit on our route of going super-low on the HBO fares a couple of months later. Obviously you can’t count on this & I’d rather have the certainty of booking a decent fare @ T-355.

    OTOH because we fly peak peak (ie the perfect timing on the perfect day for school hols), I generally have the mild (& some would say pointless) satisfaction of seeing our (say) 4 tickets getting knocked out by BA @ £2000 or higher closer to departure date. For example, our 4 Easter return flights are currently £1625, giving an Avios value pp of (£1625-£70) / 30,000 = 5.18p :)

  18. ” our European place in the sun”? Are there multiple places in the sun around the globe? :)

    Good explanation, harry.