News and Research

Frequent-Flier Miles Are Piling Up. Fliers Won’t Benefit Like Airlines Will.

March 26, 2021

Wall Street Journal

“You have travel returning, pent-up demand and an oversupply of miles,” said Jay Sorensen, president of airline consulting firm IdeaWorksCompany. “We are set for a devaluation.”  Frequent-flier programs’ job is to make fliers spend more than they otherwise would. A 2011 paper found they account for a 5% to 6% price premium.  Airlines typically list dollar and points prices for flights. Based on the exchange rate, IdeaWorksCompany calculates that each of Delta’s SkyMiles is worth roughly 1 cent, meaning rational customers should never pay more than that for a mile.

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