Is the Mileage Run Dead?
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Mileage runs have long figured into frequent flyers' strategies, allowing them to earn thousands of redeemable rewards with a single, cheap, long-haul fare. Now that American Airlines is set to become the last major US carrier to switch to a revenue-based earning system, mileage runs may no longer seem like a viable option. TPG Contributor Brian Biros explores the issue below.
Once upon a time, frequent flyer miles were earned by — wait for it — flying. American Airlines launched the AAdvantage program in the early 1980s with the simple goal of rewarding loyal flyers. Soon after, United created the MileagePlus program and Delta founded SkyMiles. Eventually, shrewd flyers learned that it was sometimes worthwhile to take long flights for the sole reason of accumulating frequent flyer miles, and the mileage run was born.
For decades, the mileage run thrived as savvy flyers spent weekends crisscrossing the globe and bragging on FlyerTalk about who got the lowest cost per mile (the ticket price divided by miles earned) on their runs. At the same time, a series of mergers and acquisitions consolidated the US global airlines into the big three: American, Delta and United. The beginning of the end of the mileage run glory days came in 2015 when Delta and United introduced new revenue-based redeemable mileage earning models. And while American held off for a while, it will switch to a revenue-based mileage-earning program on August 1. With this final nail, the discussion reignites: Is the mileage run finally dead? The answer to this, like all great philosophical questions, is yes, no and sort of.
If airplanes had rocking chairs, the passengers sitting in them would lament the flying of yesteryear when miles were awarded based on mileage flown, airfares were reasonable and kids respected their flight attendants. It is true that the traditional mileage run, with the goal of earning maximum redeemable miles, will no longer exist for major US global airlines. Take this Delta mileage run from 2011, when TPG bought three flights to Europe for the insanely low price of $150 each. I've compared what he earned in 2011 as Diamond elite with what he'd earn today for these same flights. I also listed what a general SkyMiles member would earn.
|Cost||Base Fare||Taxes||2011 General Redeemable||2011 Diamond Redeemable||2016 General Redeemable||2016 Diamond Redeemable|
Today it would take 77 of these round-trips to match what TPG earned in three 2011 mileage runs.
In 2011, these three mileage runs netted an impressive 53,042 redeemable miles at a cost of about 0.85 cents per mile. At the time, TPG valued Delta miles at 1.5 cents each, so from a redeemable miles perspective, these mileage runs provided great value. However, today — when the value of a Delta mile has dropped to 1.2 cents — this "mileage run" would net just 2,068 miles, costing about 22 cents per mile. In fact, with a set earning structure topping out at 11 miles per dollar for the top-tier status on all three airlines, a flight mile will never cost less than 9 cents, nowhere near the 1.2 cent valuation for Delta or 1.5 cent for United or American.
To use a more recent example, this incredible deal from the US to Australia on United would have earned 17,044 miles for general MileagePlus members or 34,088 for 1K members in the days of yore. Under the new program however, this reservation yielded just 1,225 miles for general members and 2,695 for 1K — and a measly trip to Australia.
Any seasoned mileage runner will tell you that mileage runs are never just about redeemable miles. Elite-qualifying miles are often just as important as redeemable miles, as elite status can make the entire flying experience more seamless and luxurious. At its best, being a top-tier elite means sipping a martini at the airline lounge bar until boarding begins, then walking straight to the gate — past the crowds of common folk scarfing down Auntie Anne's and bartering for the one working wall outlet — and onto the plane to an upgraded first-class seat where a flight attendant is waiting with glass of bubbly and a smile. All for the same cost or less than what people used to pay for cattle class.
While redeemable miles are now earned based on spending, elite-qualifying miles are still earned based on mileage flown. Therefore, for the above Delta mileage runs, 23,574 Medallion Qualifying Miles (MQMs) would be earned in 2011 and in 2016. This is almost enough to bump you one full status level on Delta.
The United deal to Australia would earn you 17,044 EQMs. Of course, you still have to meet the Premier Qualifying Dollar (PQD) requirements, which American will also roll out in 2017, and these mileage runs will not get you much closer to those thresholds. But if you qualify for the PQD waiver with $25,000 in annual spend on a Delta- or United-branded credit card, then this mileage run could, in the end, be useful. And with increased status level, the factor by which the the airfare is multiplied for redeemable miles increases, resulting in more redeemable miles. For a more thorough explanation of how you can earn redeemable and elite miles in the new AAdvantage, MileagePlus and SkyMiles programs, see this post.
Note: Miles from US global carriers can also be credited to foreign partners, many of which still credit based on mileage, but TPG will examine this in detail in a separate post.
A mileage run has always been an opportunistic way to accumulate a large amount of airline miles at a minimal price. Today, you can reach this same goal through credit cards. Sign-up bonuses have lately been extremely lucrative, with several worth more than $500 in value. With fairly normal credit card use, you can pad your mileage accounts, even if it takes longer to accumulate rewards than with an old-fashioned mileage run. And you get your Saturdays back!
Also, although upgrades are notably missing, many airline elite status privileges are extended to credit card holders, such as free checked bags, priority boarding, lounge access and bonus miles on airline spending. But if actual elite status is what you're after, the $25,000 elite-qualifying dollar waiver on airline-branded credit cards can be very helpful in getting you there. Eligible Delta cards include the Gold Delta SkyMiles Credit Card from American Express and the Platinum Delta SkyMiles Credit Card from American Express, while United options include the United MileagePlus Explorer Card and the United MileagePlus Club Card. American hasn't announced any plans to waive revenue requirements for those who meet credit card spending thresholds yet, though this could definitely happen once the change goes into effect. It seems you no longer need to fly to earn the many comforts of frequent flying.
It would be easy to say the mileage run is dead. But perhaps we should look at it as an evolution; a caterpillar that was once restricted to a tiny branch, like an airline passenger strapped in economy during a weekend transcontinental mileage run. And now, although no longer a caterpillar, the mileage run has emerged in a new form, but with the same goal of maximizing mileage earning, minimizing cost and traveling in comfort. A butterfly no longer restricted to a branch, with new options to fly how it so chooses. Because, in the end, isn't flying what this is all about?
Will you continue to take mileage runs after the upcoming AAdvantage program change?