Study shows airlines improving reward redemption

Airlines are increasing seat availability for customers redeeming points for flights while lowering the redemption cost, according to a report
by consulting firm IdeaWorksCompany. 

The company’s annual Reward Seat Availability Survey found
that of the 17 airlines it researched both this year and last, 13 provided
better overall reward seat availability, while only three offered decreased
availability. There was no change at Southwest, which makes every seat
available for point redemption.

The study also showed that the six largest U.S. airlines all
lowered the average reward price for flights of less than 2,500 miles during
2019. 

IdeaWorks conducted the study by doing 200 economy reward
booking queries for two travelers at most of the airlines surveyed. The company
did 100 such queries for airlines that don’t have long-haul networks. 

From an availability standpoint, British Airways was the
most improved, offering reward seats on 80% of queries, up 17.9 percentage
points from last year. United, which offered reward seats on 85% of queries, up
9.3 points from last year, was the most improved U.S. carrier. Delta,
conversely, offered reward seats on just 62% of IdeaWorks queries, down 10.1
points from last year, which was the steepest drop in the survey. 

Southwest was the only airline to offer 100% redemption
availability, although Etihad and JetBlue weren’t far behind at 99% and 98%
respectively. 

When it comes to reward prices, IdeaWorks looked at the
average roundtrip redemption cost for seats on flights of 250 to 2,500 miles on
Southwest, JetBlue, Alaska, Delta, American and United. The survey comingled
points and miles-based programs. IdeaWorks said the comparison is fair since
typical accruals in the programs are a point or a mile per dollar spent. 

Though reward prices at each airline dropped over the past
year, Southwest offered by far the cheapest redemption cost at 7,367 points on
average per one-way ticket. JetBlue was second lowest at 16,708 points. United
was the highest at 25,000 points. 

“For 2018, the major airlines in the U.S. posted
revenue of nearly $19 billion attributed to frequent flyer programs, notably
from the sale of miles and points to their bank partners, IdeaWorks president
Jay Sorensen wrote. “For decades, airlines have chased this rich vein of
revenue ore. The results of the 2019 survey demonstrate airlines are taking a
more balanced approach, which acknowledges the need to make reward programs …
rewarding again.”

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