Airline reward applications supply a easy proposition: For those who fly with our airline a bunch, you’ll receives a commission again within the type of miles or factors that can be utilized for future journey. But understanding what number of miles you’ll earn, and the way a lot these miles are value, may be something however easy.
These reward applications drive an enormous a part of airways’ enterprise. For instance, American Airways AAdvantage members spent $1,220 on flights on common in 2019 in comparison with $408 for non-members, in accordance with a Securities and Trade Fee submitting. So airways have a robust incentive to earn frequent flyers’ loyalty with high-value rewards.
But for purchasers, parsing the numerous variables that go into this worth proposition isn’t straightforward. For a lot of it may be downright daunting.
A survey in December 2021 and January 2022 of two,150 U.S. customers by Arrivia, a journey expertise firm, discovered that 45% of Individuals say they don’t know in the event that they’re getting the most effective worth from their journey rewards.
Fortunately, you don’t must determine it out for your self. NerdWallet collected a whole lot of information factors of airline rewards applications to find out which one offers the highest overall value. And in 2023, that loyalty program is: Frontier Miles by Frontier Airways.
Sure, an airline higher recognized for its low fares and excessive charges beat out a lot greater rivals like American and Delta Air Traces.
So, how did Frontier come to be essentially the most invaluable airline rewards program this yr?
Miles flown, not {dollars} spent
To find out essentially the most invaluable airline reward program, NerdWallet carried out a deep-dive evaluation of the 2 most essential variables:
- What number of miles you earn with a program.
- How a lot these miles are value.
With these, we decided a “rewards charge” for every airline program, which is roughly much like a cash-back charge.
Mainly, for each $100 you spend on airfare, you may anticipate to get about $10.10 again in worth from the highest airline rewards program, Frontier Airways, and $3.40 again from the underside performer, Spirit Airways. Alaska and Hawaiian Airways additionally do properly, whereas the “big three” of American, Delta and United are clustered close to the underside.
You is likely to be questioning, “What’s happening right here?” Frontier and Spirit Airways are each funds carriers that provide no-frills fares and a great deal of add-on charges. Why does one supply greater than double the return on spending as the opposite?
In our evaluation, it didn’t come right down to how a lot the miles are value for these applications. We worth Frontier miles at 0.8 cent every. What mattered was how these miles have been earned: both by the gap flown or the price of the fare.
Airways that award miles primarily based on the gap flown, reminiscent of Alaska and Frontier, carried out significantly better than people who award them primarily based on cash spent. Distance-based applications merely dole out extra miles per greenback spent on the airfare.
Is Frontier actually the most effective? Properly …
Frontier’s ultra-low fares are a part of its success on this evaluation as a result of it means flyers earn much more miles per greenback spent. If a traveler spends $200 on a 2,000-mile flight with Frontier, they’ll earn 10 miles per greenback. The identical traveler spending $300 on an Alaska flight would earn 6.7 miles per greenback.
And that’s the place issues get a bit sophisticated. Frontier costs much more charges than Alaska, on every little thing from baggage to seat choice, and these charges don’t earn miles on both of these airways.
So a Frontier flyer is simply getting the higher deal in the event that they’re keen to forgo some primary facilities, like a carry-on bag and assigned seat. Any cash spent on charges with these distance-based carriers is basically wasted, by way of incomes miles, decreasing the variety of miles earned per greenback spent.
Frontier additionally has a much worse elite status program overall than Alaska and most different airways, and different large drawbacks, reminiscent of miles that expire after solely six months of inactivity (yikes — as many don’t expire in any respect).
So sure, on paper, Frontier affords the most effective uncooked return worth in miles on {dollars} spent. However in apply, full-service airways reminiscent of Alaska, Hawaiian and JetBlue — positions 2, 3 and 4 in our evaluation — are nonetheless most likely higher bets. That is very true for frequent vacationers trying to profit from elite standing and bank card advantages, or for individuals who will spend cash on ancillary prices when flying Frontier.
What else to think about
It’s clear that distance-based applications beat airfare-based applications by way of the worth of miles earned per greenback spent. However American, Delta and United, which make up an enormous slice of the air journey pie, all have spending-based applications.
What’s a frequent traveler making an attempt to resolve between these airline rewards applications to do?
Simply as Costco most likely affords the most effective worth per greenback spent on many objects, however isn’t sensible or possible for a lot of meals consumers (who wants that a lot cinnamon?), there’s extra to think about than pure worth. Ask your self:
- Which airline affords the most effective routes from my residence airport?
- What about operational reliability (ahem, Southwest, ahem)?
- Which has the most effective companion airways for worldwide locations?
The record goes on, however the level is that no single variable determines the “finest” airline for you. But when all these different components are a toss-up, go along with the one that gives a greater rewards charge primarily based on NerdWallet evaluation.
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The article The Highest Worth Airline Rewards Program Stunned Us, Too initially appeared on NerdWallet.
The views and opinions expressed herein are the views and opinions of the writer and don’t essentially replicate these of Nasdaq, Inc.
