Airlines’ award tickets are rising in price. Cash fares for airline tickets are rising more slowly than inflation, but new report Research from IdeaWorksCompany, a consulting firm focused on airline ancillary revenue, shows that award redemptions are becoming even more expensive than paid tickets.
Analysis shows that the price of airline award tickets has increased by an average of 28% over the past five years, and the Consumer Price Index has increased by 21% over the same period.
The study is based on 600 fare queries for six different U.S. airlines.
According to IdeaWorksCompany:
- Southwest Airlines has the best redemption rate with an average of 14,484 miles per flight.
- United Airlines offers the most expensive award tickets, averaging 30,460 miles per flight.
“Consumers can enjoy the benefits of award travel faster in the Southwest,” IdeaWorks Company said in a statement. “The airline has unique advantages because of its focus on short- and medium-haul routes and frequent flights. Award prices tend to be lower for shorter flights, and demand increases for higher numbers of flights. It will be easier to respond.”
The rise of basic economy tickets is making it more difficult for cost-conscious travelers to accumulate airline points and miles, according to an analysis by IdeaWorksCompany. Most airlines now limit award income on the cheapest tickets, making it less likely that users looking for lower fares will be able to redeem future trips.
Earning points by using credit cards is also disrupting the airline rewards ecosystem.
“When frequent flyer programs emerged in the 1980s, purchasing airline tickets was the only way to accumulate miles. This outcome changed as the industry adopted co-branded credit cards,” the report said. Says. “Currently, the majority of miles earned are generated through transactions with partners, with a minority earned through airline travel.” According to financial disclosures made by American Airlines, Delta Air Lines, and United Airlines in 2020, This shift has become clear: These airlines are now making billions of dollars from the revenue provided by their bank partners.”
As a result, travelers must have an airline credit card to reap the full benefits of frequent flyer programs, the report said.
Zach Wictor is a travel writer for USA TODAY based in New York. Please contact us at zwichter@usatoday.com.
