Study Claims Airlines Are Releasing More Award Seats
If you're looking to book first or business class to Europe for a family of four, you'll probably have a hard time finding the flights you want. But according to a recent IdeaWorks study, availability has improved overall. Join TPG Special Contributor Eric Rosen for a closer look.
IdeaWorks is a company that regularly releases studies on the airline industry, including its annual Switchfly Rewards Seat Availability Survey. In this year's study, which you can read here, the company claims that airlines are releasing more award seats to flyers. That may come as shocking news to the frequent flyers who write in every day frustrated by the lack of award space on various carriers, and to be honest, the results are a little bit mystifying.
The Results
The survey found that the top five airlines and programs for reward seat availability are: airberlin topbonus, Southwest Rapid Rewards, Virgin Australia Velocity, Air Canada Aeroplan and Singapore Krisflyer.
Here is the full table of results including the percentage of flights with reward-seat availability and the change in percentage points from last year's results:
According to the survey, airlines improved award availability from 66.1% of flights in 2010 (the first year of the survey) to 74% this year. That means that 74% of flights the survey checked had reward seats available on them. The survey also found that close-in reward seats for travel within days or just a few weeks also lies between 72%-94%.
The Methodology
The methodology the survey used was based on 7,640 booking queries on the websites of 25 frequent-flyer programs made during March 2015 for travel dates raging from June-October. The company searched for two "saver-style" reward seats on flights as their baseline criterion, and it appears that they only searched a carrier's own award availability using its own mileage program, so no partner awards included.
While some of these results are surprising, others are not at all given recent changes in the airline industry. The survey makes no mention of whether it searched for economy or business/first-class tickets, and what "saver-style" specifically means in each program's case. But more on that later.
Analysis and Questions
First, it's no surprise that Southwest again ranks at the top since the airline's Rapid Rewards boasts unlimited reward seats and no blackout dates with fixed-rate redemptions of 70 points per $1 of airfare. However, after the search period (i.e. March), the airline switched to dynamic reward pricing. While you'll still find point-redemption options for any open seat on a flight, the pricing scale has a lot more gradients now, and that "saver-style" availability the survey searched for becomes a lot murkier.
Southwest also is not alone in changing its pricing scheme. Along with switching to a revenue-based mileage-earning formula this year, Delta also introduced a five-tier award chart, which it claims has more award seats available at the lowest levels. Notice the plural there. So while awards at the very lowest level are actually pretty scarce (and non-existent within a three-week travel window on domestic flights), there might be more reward seats available overall at the bottom two-three levels of the award chart (which Delta no longer publishes on its website, by the way). That said, Delta still only showed award availability on 57.9% of its flights, up 2.9% from last year.
It's also worth pointing out that Delta and United, which saw its award availability increase 3.6% to 75% of flights, both switched to revenue-based mileage-earning systems where flyers earn 5-11 miles per dollar they spend on airfare depending on their elite level rather than on mileage flown. Not only that, but both airlines also instituted major devaluations of their award charts last year that have priced out certain awards (and especially partner awards using United miles) out of many consumers' reach.
So for the vast majority of flyers stuck at the lower earning rates, many awards are going to be out of reach anyway as it takes them a lot more time to earn the necessary mileage for that seat.
American Airlines jumped in the rankings this year with a 12.1% increase in available reward seats to 67.1% of flights. However, the airline also overhauled its award chart last year to create a new five-tiered system (sound familiar?) of pricing. No mention of which tiers IdeaWorks considered "saver-style" for its study.
While airlines often tout their award availability as a plus and the fact that they try to release more seats at saver levels year after year, what we have in fact seen in recent years are far more complicated, tiered pricing formulas that result in higher award redemption requirements. So while you might find award seats available, you'll be paying a lot more for them.
Perhaps airlines have moved in this direction to compete with fixed-rate points programs like Capital One Venture Rewards or Barclaycard Arrival Miles, which consumers can redeem at fixed rates for any available airline seat, just like paying for them with cash but using points instead. What good is it if there is an award seat available, though, if it is at an exorbitant redemption rate?
All in all, this report seems fairly typical of past IdeaWorks studies with methodology that raises questions rather than answering them, and no effort to address key factors like tiered pricing and program devaluations.
At best, the results of this one seem like a mixed bag, and at worst, they are misleading, especially given the major changes on both the earning and redemption sides of many major frequent-flyer programs in the last year.
What are your thoughts on the survey? Do they match up to your own personal experiences booking awards with these programs?
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There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits.Pros
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- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.