Some interesting insights into how people use their frequent flyer miles

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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. 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.

  2. 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.

  3. 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 😉

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