Frequent flyer programmes have become substantial businesses in their own right.
Selling miles
Airlines selling points to banks and retailers.
Which is a major revenue stream independent of flying.
Devaluation
Redemption rates changed without notice.
Which reduces the value of accumulated balances.
Status benefits
Priority services and upgrades.
Which are frequently worth more than the points.
Calculating value
Cash value of a redemption divided by points spent.
Which varies by an order of magnitude between uses.
Why airlines value these programmes so highly
Selling miles to credit card issuers and retail partners generates predictable cash independent of whether anyone flies.
Which during periods when flying stopped was, for some carriers, the most valuable asset they held.
Several airlines have raised finance secured against their loyalty programmes, which indicates how the market values them.
Points as a liability
Outstanding balances representing a future obligation.
Which is why devaluation happens.
Earning through spending
Cards and partners generating most points for many members.
Which has shifted programmes away from rewarding flying.
Redemption availability
Seats released at the airline's discretion.
Which determines actual value.
Practical approach
Use points rather than hoarding them, since their value only falls.
Working out what a point is worth to you
Take a redemption you would actually make, find the cash price of the same flight, subtract any fees payable on the redemption, and divide by the points required.
Which gives a value per point for that specific use.
Doing this a few times reveals that value varies enormously, and that some redemptions are considerably worse than simply paying cash.
Taxes and surcharges
Charges payable on award tickets.
Which can approach the cash fare on some routes.
Status runs and mattress runs
Travel undertaken purely to qualify.
Which rarely makes financial sense.
Programme changes
Rules altered with limited notice.
Which is why holding large balances is risky.
Alternatives
Cashback cards frequently offering simpler value.
Who these programmes actually reward
Frequent business travellers whose employers pay, and high spenders on partner credit cards.
Which is a smaller group than the number of people accumulating small balances.
For occasional leisure travellers, the realistic value is modest, and choosing flights on price and schedule generally beats choosing them to earn points.
Status matching
Airlines granting equivalent status to attract customers.
Which is worth asking about when switching.
Family pooling
Combining balances across household members.
Which some programmes allow.
Expiry
Points lapsing after inactivity.
Which is worth tracking.
The realistic summary
Useful if you fly often on the same airline, marginal otherwise.
Why the travel industry is so hard to see into
Almost every part of a holiday is sold by one company, delivered by another and regulated by a third, frequently across several countries. The traveller deals with a single price and a single confirmation, and the arrangements behind it are invisible.
That structure is not designed to confuse anyone. It exists because travel involves aviation, accommodation, ground transport, insurance and consumer protection, and no single business does all of those well. The consequence is that when something goes wrong, working out who is responsible is genuinely difficult, and the answer frequently depends on how the booking was assembled rather than on what actually happened.
The questions worth asking before booking
Who is the organiser, what protection applies if a supplier fails, what exactly is included in the price, and what happens if plans change. Four questions, all answerable at the point of booking, and between them they cover most of the situations that produce complaints afterwards.
None of this makes travel more complicated than it is. It makes visible a set of decisions that are being made whether or not the traveller notices them.
A general note
Consumer protection, aviation passenger rights, classification schemes and insurance regulation all differ substantially between countries, and change. National regulators and consumer bodies publish the applicable rules, and they are the authoritative source for anything with money or a legal position attached.
One habit worth adopting
Before paying for anything in travel, read the part of the confirmation that describes what happens if it does not go ahead. Not the terms in full, just that section.
It takes two minutes, it is where the meaningful differences between apparently similar offers actually sit, and it is the only part of the documentation that matters on the day something goes wrong.
Where to find reliable information
National tourist boards, aviation regulators and consumer protection bodies all publish material aimed at travellers rather than at the industry, and it is free, specific and rarely promoted.
It is considerably more useful than the general advice that circulates, and it has the advantage of being current for the country you are actually going to.
A closing thought
Travel is one of the few substantial purchases most people make without reading anything about how it is arranged. That is understandable, because the arranging is meant to be invisible and usually is.
The occasions when it becomes visible are the occasions when something has gone wrong, and that is the worst possible moment to be learning who is responsible for what. Ten minutes of reading before booking is not a burden, and it is the difference between having a position and hoping someone will help.