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Looking at various air miles programs around the world, it seems to me that they're only useful for business travelers, who basically get free flights out of their employer's pocket. However for a regular Joe, who pays out of pocket, all of the programs seem useless when comparing to the option of simply flying the cheapest flight at any given time. Even benefits such as business lounges are either useless (why would I use a lounge on a non-transfer flight?) or can be bought for a reasonable fee when needed.

There are also credit cards which give out cashback in the form of air miles, however their pay-out is usually lower than simply getting a fixed cashback in dollars.

So, is it ever useful for a person to care about air miles if they're paying for everything out of their own pocket?

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Honestly I find your question a bit too broad. We all wish to be the business traveler with tickets paid for by company sometimes but that is off-topic. Could you instead specify what you mean by useful? Airline status? Award flights? Also note that there are huge differences in miles collecting via CCs in US and Europe. – mts Feb 4 at 13:02
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@MichaelHampton well, the issue is that BA flights are ~50 pounds more than Ryanair/Easyjet, so we're looking at 50*26 = 1300 pounds extra for 1 free ticket. – JonathanReez Feb 4 at 13:05
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My intuition is that most frequent-flyer programs aren't worth going out of your way to earn points/status in unless you are a very frequent flyer, but that, depending on your location and travel pattern, enrolling in a frequent-flyer program can sometimes have worthwhile benefits. (Example: My mother visits my grandmother halfway across the US every few months, flying in economy class; saving up frequent-flyer points solely from this travel, she earned enough Alaskan reward points to get an intercontinental award ticket.) – davidvc Feb 4 at 13:07
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@JonathanReez personally I don't understand why you ask for a calculation with exact dates and fares, that's an academic exercises and past fares are hard to come by. The point of davidvc as I see it is to travel cheapest as you normally would and collect miles/points on the way and with some luck (i.e. flight pattern and airlines servicing it) something nice might come along. – mts Feb 4 at 13:14
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Some business travellers don't benefit either. I had clocked up two or three round-the-world trips on Pan Am in the 1980s before they folded because of, err, excessive frequent-flyer liabilities. – EJP Feb 5 at 9:53
up vote 39 down vote accepted

To directly answer the title question, yes, non-business travelers can absolutely benefit from airline loyalty programs (i.e. earning points/miles as well as status.) Whether it's worth it for you in particular, though, will be extremely dependent on your particular situation and what options are available to you on the routes you normally fly, as well as whether you typically need to take luggage, etc.

Since specific examples were requested, I'll use myself as an example. I live in the Southeast U.S. and fly round-trips within the U.S. typically a few times per year and inter-continental round-trips about once a year. While there are sometimes slightly cheaper advertised fares to my domestic destinations on some of the very-low-cost airlines, by the time I add all of the fees and other associated costs of flying one of those airlines, they would often end up costing as much or more than Southwest or Delta. This is especially true due to the fact that the very-low-cost airlines usually have infrequent flight schedules that are much more likely to require me to take an extra day off of work than with an airline like SWA or DL where flights leave about every hour. So, in the end, Southwest or Delta usually ends up being the lowest actual cost to me and both earn points/miles on every flight that don't expire (Delta miles don't expire at all and Southwest points remain active as long as you have at least some account activity once every two years.)

As far as redemption value, this again varies widely and will depend very largely on your use case. For me, these two programs are my primary options due to where I live:

Southwest

In the case of Southwest, you typically earn 6 points per dollar spent on the cheap fares and can redeem points at a rate of 70 points per dollar of airfare. If you purchase the ticket with a Southwest co-branded credit card, you earn 8 points per dollar instead of 6. So, without their card, you get a dollar worth of airfare for every $11.67 spent on airfare and, with their card, you get a dollar of airfare for every $8.75 spent.

Delta

Delta's scheme is much more complicated and can range from much more valuable to much less valuable depending on your situation. For my situation, it's more valuable.

Earning miles

With Delta, you earn 5 points per dollar of airfare as the base rate. If you buy the ticket with a Delta co-branded credit card, that goes up to 7 points per dollar. If you additionally have status with Delta, you get an additional 2, 3, 4, or 6 points per dollar based on your level of status. In my case, I get 10 points per dollar total at my current status level (which came entirely from personal travel, not business travel.) Note that there is no bonus or penalty to this for different fare or cabin classes, but you inherently earn more points on more expensive fares since it's based on dollars spent. So, if I buy a $200 round-trip fare, I earn 2,000 'miles' regardless of fare class, distance actually traveled, etc.

Redeeming miles

While miles are earned on a dollar-cost basis, mileage redemption with Delta is (loosely) based on an award chart, with mileage cost depending on region traveled to/from and demand for that particular route (i.e. usually only a few seats are available at the lowest mileage costs on a given flight.) If you book early, domestic round trips usually start at 25,000 miles (sometimes 20,000, but this is less common.) If you book a $200 round trip for 25,000 miles, that's obviously not a great value (less than 0.8 cents/mile value.) However, the 'regions' are quite large, with the entire U.S. and Canada (excluding Hawaii) being a single 'region.' So, if you book a $500 trans-continental round-trip for 25,000 miles, that's obviously a much better value (2 cents/mile, which is equivalent to $1 of airfare earned for every $5 of airfare purchased at my earning rate of 10 miles/dollar.)

The best redemption values I've seen on Delta are for long-haul business class flights with 140,000 miles getting you a business class ticket to the other side of the planet that would normally cost $7k if bought with cash, a 5 cent/mile value. So, if I'm earning 10 points per dollar of airfare and redeeming for 5 cents/mile of value, that's 50 cents per dollar originally spent (i.e. $1 of airfare earned for every $2 of airfare purchased!) In my case, this is exactly how I prefer to use the points, as I'm not really a fan of flying economy (and, thus, getting no sleep) on routes that involve 30-36 hours of travel time (20-22 of that actually airborne) each direction.

Conclusion for a non-business traveler

If you only ever travel short distances, always buy the cheapest tickets, and don't earn miles separately from credit cards, then you're probably never going to get up to 140,000 miles. However, 25,000 miles is certainly very attainable for the non-business traveler, since the points don't expire ($2,500 of total airfare purchased at my earning rate.) An extra $500 of free airfare for every $2,500 spent isn't a bad deal at all, even if it takes you a few years to buy that much airfare.

An additional aid to those who don't fly as often is that, with both Delta and Southwest, there's no penalty for booking just one way with points vs. booking a round-trip with points. So, using the trans-continental Delta flight example, you could get one way for 12,500 points and just pay cash for the other way and be able to get your first redemption after spending only $1,250 while getting the same value per dollar spent.

So, yes, there are definitely cases where it's useful for a non-business traveler to care about points. However, whether that's the case for you or not will be highly dependent on the flight options available where you live, the relative cost of those options, where and how often you tend to fly, and what the terms are of the frequent flier programs of the airline choices you have available. As you can see from just the two examples I've listed, the terms for different frequent flier programs and their relative usefulness to you can vary significantly from one airline to another (and that's before even considering elite status.)

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+1 Nice answer with examples. You give a nice glimpse into just how complicated it can all be without being vague and saying it's "nearly impossible to answer". It's not, you just did. – fractalspawn Feb 4 at 18:47
    
Great answer with examples! Thank you! I was indeed wrong about my assumptions. – JonathanReez Feb 4 at 20:47
    
one correction: Delta miles do expire. I had nearly 600000 miles collected, and they mailed me a week after they expired to let me know that they are now lost. (Thanks, Delta. I cannot really expect you get the idea of telling me before) – Aganju Feb 5 at 1:09
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@Aganju Delta miles used to expire with two years of inactivity on the account. This was changed a few years ago. See "Account Deletion & Mileage Expiration" under "SkyMiles Rules & Conditions" on delta.com/content/www/en_US/skymiles/… for the new policy. Mind you, they can always change their policy on a whim, but for now they do not expire. – lc. Feb 5 at 1:30
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QANTAS at least, the price of buying a flight tomorrow with frequent flyer points is the same as buying one 6 months out. If you need a flight in a hurry for some emergency reason (and there is still one available), you can dramatically increase the $ conversion rate of your points. – Scott Feb 5 at 4:40

There are three things that set (some) frequent flier programs apart from other rewards programs. How important these are to you may determine whether they are worth doing.

The first is "Status" which you refer to by mentioning business travellers. Never lining up, spending an hour or more less in the airport than others, waiting in the lounge eating and using free internet, and getting upgraded for free are all pretty cool. But unless you fly an average of a thousand miles a week, (50,000 a year) you aren't getting these and can ignore them.

The second is that miles awarded don't always correlate with money spent, enabling silly things like "mileage runs". This makes it impossible to say that your program gives you 1% or 2% or 0.5%. A person who makes long direct flights between popular airports will get a higher percentage back than people who make connecting flights involving less popular airports, because they're spending more money but getting the same miles for it.

The third, and the only one that applies to me, is that redemptions don't always correlate with price. (I'm not talking about those travel-only credit card reward things that go on about any airline any time no blackouts - those are just a dollars-for-points redemption. If the price doubles, the points you need double.) Airlines still exist with redemptions where the points come from a chart. This means, for example, that Toronto-Vancouver-Nanaimo costs the same points as Toronto-Vancouver, even though a paid-for-ticket might cost almost double to add on that little local leg. It's also pretty common for business class to cost only 25% more points even though it might cost 5 times the dollars. This let me do Toronto-London-Venice-Toronto, all business, for barely more than Toronto-London-Toronto in economy, and treat my mother to a number of business class flights and three days in Venice.

I used to chase status, but the programs changed a lot and I no longer find it worthwhile. I choose the flight that's best for me, whether I'm paying for it or my client is. Because of where I live, it's often on the airline I collect points from, and I collect them when I fly that airline. I look carefully for redemptions that save me more than a penny for each mile I spend - two is even better - and use those when I can. As I mentioned above, tickets that would cost the same dollars don't always cost the same points, so I never assume that a redemption is a good deal. On my own recent epic trip, I flew on the airline that I collect on, but for several legs I paid $50 less not to get the miles. I did the math and they weren't worth $50 to me.

My advice? Sign up for frequent flyer programs, but don't let them drive your decisions. As the points pile up, look at how to use them, but keep a spreadsheet handy. Little actions like using one chain of gas stations because they give you miles, or one drugstore because it gives you miles, are harmless enough if you like that chain anyway, but don't go out of your way to accumulate miles you may never use. And never pay extra for a flight that earns miles, whether that's a charge on your airline or the price difference between two airlines. Keep them mentally filed as a bonus gift some folks give you, not as a motivator that you chase, and pay for with time and money. You'll be happier and have more money, too.

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tldr: If you travel once or twice a year, on full-price airlines with frequent flyer progammes, sign up for them. But don't obsess over them, and focus on price and other benefits first.


Longer answer:

As always, it depends.

Many (most?) budget airlines don't have a frequent flyer programme (or at least one comparable to those on full-service airlines), so if you mostly fly on those, it will take a long time to acquire enough miles to do anything useful. Some airlines (ahem, Lufthansa) also have a nasty habit of "expiring" old miles, even if you are still actively flying with them from time to time, so definitely avoid those if you don't travel (and redeem) often.

It is true that if you are only flying for leisure, miles will probably trickle in slowly, whether you plan to fly budget airlines or not. As such, you probably won't get much/any elite status levels, and the benefits won't really be relevant.

Incidentally, I think you are wrong about some of the benefits - lounges are very useful even when not on a transfer (most of my flights don't involve a transfer, but I still use the lounge before virtually every departure, since getting through security with no time to waste but never missing a flight, consistently, is virtually impossible), and they do cost a lot - in fact for some airports (e.g. Heathrow T5 until recently) didn't have the option to pay for them at all.

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It all depends on how frequently you travel and what type of travels. If you just perform 2 domestic flights every 2 years, then miles collection isn't worth... If you take more than few flights every year including some long distance flights, then it is worth, even in economy class, even with the cheapest ticket.

To give you some figures, with some airlines, 2 round trips from USA to Europe (so 4 flights) would allow you to collect enough miles for a domestic flight.

Then, miles collection doesn't cost anything as long as you take the cheapest ticket so there is no reason to avoid it... But again, this is really dependent on how frequently you travel. If it is once every 2 years, not worth as your miles will likely expire before your next flight.

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"2 round trips from USA to Europe would allow you to collect enough miles for a domestic flight" - could you provide a full calculation? Usually the catch is that most of the ticket is 'taxes' not covered by miles, so the savings are minimal. – JonathanReez Feb 4 at 12:10
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This is a generic calculation I made. One round trip would allow you to gather between 4.000 and 7.000 miles depending on the trip and ticket. Then with around 10.000 miles, you can buy a domestic flight on some airlines. – Olielo Feb 4 at 12:16
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I'm also skeptical. Specifically because the miles that need to be spend are typically related to the regular price of the ticket you want to buy, while I don't think there are situations where taxes are included in the part of the ticket you can get by using airmiles. In addition, it requires you to always fly with the same airline, or at least with the same alliance, which might not be relevant at all, if you're trying to get the cheapest ticket on every flight. So, as a recreational traveler, you'd need to fly a lot to make this worth your while. – MastaBaba Feb 4 at 12:37
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This comment thread shows exactly the uncertainty displayed by @JonathanReez in the original question. Sure, there are scenarios where collected air miles could get a non-business traveler a ticket, but if we presume this traveler in principle will get the cheapest ticket between two places, does that still hold? – MastaBaba Feb 4 at 14:01
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Once again: Can you specify which 'some airlines' you are talking about? To give a specific example of the opposite: Lufthansa credits you with about 1,900 miles for the cheapest transatlantic roundtrip fare and charges you at least 33,000 miles for a free domestic flight within Germany (taxes inclusive). – Tor-Einar Jarnbjo Feb 4 at 14:13

Unfortunately that is difficult to answer: About two years ago a large part of the industry (United, Delta) shifted the accrual from "miles flown" to "dollars spend" with a very complex set of rules. These programs are now pretty much useless for the occasional flyer.

Other ways to earn miles are associated credit cards. These offer miles for dollars spend and still have a pretty good accrual rate.

Typically a domestic round trip saver ticket costs 25.000 miles (United, American, etc). That used to be three round trips to Europe or two round trips to China or less if you have premier status with the airline. Today this calculation is a lot more difficult and depends on the individual rules of each airline.

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I think your answer is quite US-specific. Most airlines outside the US still have programs that reward based on mileage, as far as I'm aware. – Andrew Ferrier Feb 4 at 16:12
    
@AndrewFerrier While most non-U.S. airline loyalty programs are sort of based on mileage, many of them apply multipliers based on the particular fare class, leading to a similar effect. – reirab Feb 4 at 18:01
    
@reirab agreed, fair point. – Andrew Ferrier Feb 4 at 18:35

There are also credit cards which give out cashback in the form of air miles, however their pay-out is usually lower than simply getting a fixed cashback in dollars.

Aeroplan points exchanged for international business tickets can be worth 4.5-6CPM and if you manage to find an upgradeable ticket it can be 10-12CPM. I've never seen a generic cashback above 2% , some special card+store combinations perhaps 4% but even that's rare. By churning and using Aeroplan cards I collect enough points to fly to Europe twice a year in comfort.

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So, what's the total rate of conversion of credit card purchases to air tickets? – JonathanReez Feb 5 at 8:18
    
As I tried to say: depends on what kind of air ticket you buy. As an example, Vancouver-Vienna return in business is 5762.57 CAD, vs 110 000 miles + 936.71 CAD, so your 110 000 miles is equivalent to 4825 which means one mile in this case is 4.3 cents. With a bit of trickery with routing, you can save most of the taxes (search on United for flights not with Air Canada nor Lufthansa, then call Aeroplan), so you will be getting ~5600 dollars out of your 110 000 miles, making a mile 5 cents. If you go to Australia/Asia, it's an even better deal. And so on... – chx Feb 5 at 11:11
    
Could you also add a calculation for the scenario where one doesn't buy business class tickets? That would make it more balanced. – JonathanReez Feb 5 at 12:04
    
It's not worth it in that case. The very point of this is making flying on business class affordable. – chx Feb 5 at 18:46

My strategy as a non business traveler is to have a few accounts with airlines that I know I will want to redeem miles with and that have a good airline alliance/code share program.

For example, I have a mileage account with American. I fly quite a bit with American as well as US Airlines and Alaska. Then I use the miles collected with these airlines towards reward travel with American.

I think you should evaluate all airlines for each major alliance (Sky Team, One World, Star Alliance) and create a mileage account for one airline in each of the three. It only makes sense to have one account per alliance since you cannot consolidate the miles (maybe possible but at a cost).

Additionally, there are a few airlines that do not participate in any alliance (like Iceland Air, for example). You should only join those mileage programs if you intend to travel with those airlines more than once a year since otherwise your miles will expire anyways.

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