Jay Sorensen’s IdeaWorks is out with their annual study of airline frequent flyer award pricing, and he has interesting findings after making 1,200 flight searches in February 2025 for travel during between June and October.
Looking at the cost of domestic roundtrip bookings with a Saturday night stay for one passenger, the report finds that award price inflation (36% since 2019) is much worse than inflation in the broader economy (24%). Compared to last year’s study results, though, all airlines charged fewer points on average for a ticket.
American AAdvantage redemptions have actually got 21% cheaper in this category over the last six years. The airline has said a key component of their strategy has been offering a more compelling rewards program than competitors.
Credit: IdeaWorks
The methodology of the study isn’t a perfect comparison. Different airlines release their lowest award pricing at different times. Since the routes aren’t the same for each carrier (as each carrier’s route network is different) using the same travel dates can involve seasonal effects. And they don’t look at close-in bookings for last minute travel where the value of miles may be different.
Sorensen avoids a common mistake, though, of claiming that a mile is ‘worth’ a specific amount because it buys that amount of travel since miles can’t be used on as many times as cash, miles are highly likely to be devalued in the future, and the specific value of a given mile changes depending on how many you already have (if the mile pushes you over the top to an award, or you have so many you’ll never spend the incremental mile). Instead he looks at how many miles each airline program charges you in economy on their busiest routes.
Southwest Airlines Rapid Rewards Declining In Value
Southwest Airlines has devalued their points 43% in the past 12 years. Here, the report compares what award tickets cost on Southwest in 2019 and 2025.
- Southwest awards are a function of the price of a paid ticket and the value of a point.
- They reduced the value of their points 6.5% in 2021 and an additional 4% to start 2024.
- That, combined with changes in airfares for the tickets searched, contribute to this dramatic change.
The report notes that “Southwest had the highest Reward Payback for economy travel, and returned 7.3 cents of reward value for every 100 cents spent on air fare.” However since this report, Southwest Airlines announced the introduction of basic economy fares and has cut mileage-earning by two-thirds on its cheapest fares.
Sorensen warns about basic economy fares – where several airlines now including Southwest offer fewer miles, and Delta none at all.
The accrual penalties placed on basic economy fares by most airlines has a crushing effect on the value of frequent flyer programs for everyday consumers. It directly conflicts with the objective to add members and to grow them into loyal customers who buy a bigger array of services.
Southwest also announced that they will no longer offer a fixed value for each point. Instead, each point will become worth less when redeeming against expensive fares at peak times and potentially worth more when redeeming at low periods.
American AAdvantage Has Improved Markedly For Domestic Coach Tickets
While I prefer to redeem miles for long haul business class flights – where I believe I get the most value, accessing tickets that would be too costly to purchase directly – most travelers fly in economy and most members of frequent flyer programs redeem for domestic trips.
In this report, American Airlines shows a dramatic shift in award pricing since 2019. It’s the only airline where redemption prices for domestic coach awards appear to have gotten less expensive. In spring 2019 they were still experimenting with ‘web special’ (dynamically priced) awards. Since then award pricing has been allowed to fluctuate significantly – also meaning that cheap domestic coach awards are plentiful.
Sometimes international business class awards are, too! I booked American Airlines business class awards to Venice (4 seats!) this summer for less than saver awards used to cost. Much of the time those are pricier than ever. But it’s absolutely fair to say that domestic coach awards have likely become less expensive overall – at least for a flight option on a given day that isn’t selling well between particular cities – since American hadn’t yet broadly moved to a model that varied pricing down as well as up.
The report is looking at the lowest award price for any flight on a day (regardless of departure time), though the larger report is noting availability for 1-2 flights versus 3 or more.
Sorensen notes that American:
- “had the best economy reward availability with 94% availability at or below the traditional 25,000-mile roundtrip level.”
- “had the highest reward value of a mile/point at 1.6 cents, which is of particular interest to members accruing through a co-branded card.”
JetBlue, Alaska And Delta
JetBlue devalued its points without notice in early 2023. It doesn’t surprise me that awards have gotten a bit costlier in this report. However, they “averaged just over 10 points to fly one mile, which is far below the 6-airline average of 15 miles/points to fly one mile” according to IdeaWorks.
Alaska Airlines awards are pricier as well. I find their Mileage Plan miles are fantastic for redeeming on partner airlines – but for actual travel on Alaska I have rarely ever found compelling deals.
Meanwhile, I always felt that this report painted Delta SkyMiles in too positive a light – but by focusing on domestic coach awards, you’re hitting Delta’s sweet spot. You’re usually going to get about 1.1 cents apiece in value from SkyMiles, except on rare occasions. And that makes them roughly competitive with some of their peers for those awards. Just don’t try to book business class.
The positive that the report is able to offer about SkyMiles isn’t even about its award pricing at all. Instead praising their “exceptional website tool for identifying deals using consumer-defined criteria.” Delta books their cheapest awards into basic economy, and those results are included – so while Delta compares poorly to many competitors, those more expensive SkyMiles awards are also a worse passenger experience.
United MileagePlus Fares Worst In This Study
United actually comes out looking worst here. When this report queried pricing in 2019, United hadn’t yet abolished its award chart. They announced that in April 2019. Moving to dynamic pricing has meant an increase in price – which should surprise no one because it almost always does, and because United devalued MileagePlus partner awards multiple times during the pandemic.
They had the highest redemption prices amongst U.S. carriers for domestic coach roundtrips. The value you’ll find in United miles comes from their broad partnerships with airlines around the world (Star Alliance premium cabin awards). Even there, though, you’ll frequently find better pricing for the same awards from their partner to the north, Air Canada Aeroplan. And Air Canada partners with several banks for points transfers, giving U.S. members easy access to Aeroplan miles.
Like Delta, the positive that IdeaWorks offers here is unrelated to pricing. Instead, they’re willing to sell customers the ability to lock in their award price without ticketing (“FareLock”) “which delays booking and payment for 3, 7, and 14 days.”
Why Do Award Prices Vary So Wildly?
When frequent flyer programs began, they unloaded excess inventory at a deep discount to members. Unsold seats ‘spoil’ when the plane takes off, and airlines will never receive any money for them. They don’t want to sell them too cheaply or else they might get less revenue from paying customers who will buy seats. But they liquidate these seats at a discount through loyalty programs.
Members value the seats at close to retail price, but the seats cost the airline very little. It’s that leverage that created much of the success of the loyalty marketing at airlines. Frequency programs are the most successful marketing innovation in history, now generating billions of dollars in profit for each of the largest U.S. carriers.
However, they are also victims of their own success. Airlines sell miles to third parties like banks, and are printing miles far more rapidly than they are growing the supply of unsold seats. In fact, airlines have also gotten better at limiting the number of seats they won’t sell. Airline load factors are up dramatically since the advent of the modern frequent flyer program 44 years ago.
More miles chasing too few seats creates problems. Members either can’t use their points, or the programs want to charge far more points for seats because redemptions trade off with tickets they’d be able to sell for cash.
In order to adjust to this, programs have moved to dynamic pricing where the cost of an award ticket varies based on the cash price of the itinerary. The frequent flyer program is essentially buying a ticket from the airline using points as cash. Each airline has a somewhat different formula for doing this.
I still find the best value redemptions are with airline partners which still – for the most part – follow the model of ‘the seat is either available or it isn’t’ and if it is, pricing is at a traditional saver level. The greatest arbitrage or leverage comes from partner business and first class awards, where the seat is expected to go unsold so costs the airline little to offer (and is valued by the traveler at close to retail). The mileage cost is based on something the airline will never sell, so it’s cheap, while the consumer gets something they value at several thousand dollars.
Unfortunately, Delta SkyMiles charges based on something closer to retail for these tickets even when they are ostensibly still saver awards offered cheaply by the partner – but only when the trip is to or from the United States.
Stop it! Are you trying to give AA ideas?
This report doesn’t surprise me in the slightest. AA miles are super useful: DL and UA miles, not so much. Mind you, I’m mostly looking at coach redemptions. I’m probably never going to redeem for domestic first class, and only rarely for int’l business class. I’m looking for reasonably comfortable transportation, not (perceived) luxury. The American and the Alaska programs are, by far, the best two domestic frequent flyer programs to provide this transportation. Curiously, AA never seems to get much recognition for having very good redemption options — even after removing their annoying cancellation penalties for these tickets during the Covid years. I assume this lack of recognition is just the result of ignorance among most travellers.
FWIW, the only major weakness of the AA program is the lack of “exciting” coach redemptions from the East Coast to Europe. For this, it’s wise to also play the Virgin and Flying Blue game.
Obligatory gripe about SkyPesos. I still prefer Delta—I just wish it wasn’t 400K one-way Delta One to Europe. Oh well.
I will say, even if it’s not AA, UA, DL, B6, etc., there are partner programs that still have outsized value and remain relatively stable. I’ve been pleased with recent transfers and redemptions to Singapore and Qantas. Sometimes there’s an opening with FlyingBlue, Avios, too. It’s nice while it lasts.
@David P — Bah! You know it. Bob at AA taking notes from VFTW, like: ‘Oh, hot damn, we could have devalued our program this whole time? Someone should get on that!’ In all seriousness, they did switch to somewhat dynamic pricing in the last year or so, but there are still sweet spots. It’s just hard to accumulate points, because there are no transfer partners now that BILT is out and Citi hasn’t returned yet. Plus, if AA Barclays is done, that’s a loss to those of us churning their 70K bonus every several years.
no surprise at all.
and it is all based on the tenet that no profit-motivated company gives away more of its revenue than it needs to.
Airline loyalty programs are the most successful marketing programs in history.
Airlines that are making the most money or plan to make money charge higher rates for award travel.
It isn’t a surprise that WN is pulling back on giving away as much of its revenue -they were competitively excessively generous – just like w/ the bags fly free program.
AA awards are as cheap as they are because AA has to buy much more loyalty than DL or UA.
SkyMiles has always been competitive for everything except for international business class which they hold out for the highest fares; they don’t give away upgrades like AA and UA do. DL does offer plenty of good awards even in international economy and premium economy as well as domestic first.
United has the least amount of domestic seats of the big 4 and they want to be as profitable so they can be as stingy as they are.
the little carriers use loyalty programs to build loyalty against larger carriers.
nothing is a surprise but the data confirms that alot of the conceptions about airline loyalty programs are correct.
Redeeming miles in for domestic coach travel is often not a good use of miles. You’re wasting maybe 25K miles for what might be a $150 basic economy ticket? But the masses will do so.
I say: don’t bother with frequent flyer miles. Award ticket prices is one thing, what about the availability (or the lack thereof) of award seats?
Shhhhhh, definitely don’t give them any ideas. This is basically what I am using AA mile for these days. It can be an incredible value when booking far out to get something like MIA-SEA for 6k miles one way when AA is asking $300 for a non-basic fare on the same flight. UA and DL are laughable for just about anything these days.
It still is outrageous that AA (and others) charge 100,000 miles for a one way cross country trip in first class domestic flights.
AA redemptions have lower mileage costs because they basically have to in order to stay competitive given that Chase UR and Amex MR are not transferrable to AA and because the AA domestic economy experience is subpar relative to Delta and United (no seatback screens and a much higher involuntary bumping rate).
I suspect this relative bargain might shrink if Citi ThankYou Points ever become transferrable to AA since this would inflate the points supply.
AA charges taxes and fees on BA metal – so partner prices in miles alone look low.
After you factor in both fees and miles, they are not at the top
For domestic flights I’ll accept the results. How about a look at international on AA metal. I saw a oneway biz class to Rio for 270k miles one way and that was cheapest as AA metal was the only option.
I’d love to see the study on the rapid increase in miles earning ability from credit cards, banks accounts, shopping etc. Everyone focuses on the increased cost of an award without saying too much about the huge increase in earning ability. A 75k or 100k offer isn’t an outlier anymore.
Gary does touch on too many miles chasing too few seats.
@Tim Dunn — Your analysis of this is deeply skewed by your allegiance. Look, it’s a business decision on whether to offer attractive frequent flyer award redemptions. It has little or nothing to do with selling tickets at higher costs. For argument’s sake, let’s say because of Delta’s “brilliance” they can sell their tickets for 10% more (which would be fantastic). It that case, it might make sense for them to charge 10% more for their award tickets. But they often charge 100% more. That’s obviously a decision that they don’t see value in having a generous frequent flyer program. It’s the samer reason why, in the hotel space, Marriott award redemptions cost much more than Hyatt redemptions. Nobody in their right mind would say Marriott properties are better. It’s just a business decision by Marriott not to offer attractive redemptions.
Delta’s decision could be correct. Maybe they have a captive audience that doesn’t pay much attention to the value of SkyMiles. This is certainly possible. For example, I doubt anyone who understood the value of frequent flyer miles would put much effort into accumulating SkyPesos — including putting spend on their Delta credit cards. Yet some people do. So it is certainly possible that the general public is ignorant of Delta’s stinginess. These programs are complicated and most people prefer to spend their time focused on other things.
But it is also possible that it is a competitive advantage (AAdvantage?) to have a decent loyalty program. There is little doubt in my mind that a sizeable group of travellers are more interested in acquiring AA miles than DL miles. And they act on this belief. They acquire AA credit cards, put spend on them, and fly AA more. If these people didn’t exist, websites like View from the Wing which cater to them would not exist.
@Steven — If you think anyone would knowingly pay more than 1,000 or 2,000 miles to redeem a domestic award ticket on DL instead of AA I have a bridge in Brooklyn I can sell you for a couple of frequent flyer miles. This is particularly true because AA offers a FAR SUPERIOR redemption product by booking you into regular economy and DL will book you into basic economy. Personally, at even the same price, I would never even consider a DL award ticket over an AA award ticket. And that’s even before factoring in the fact that the two in-flight products are basically indistinguishable in the real world.
“I still find the best value redemptions are with airline partners”
The implication here is that readers may find rewards that will fit their schedule and family needs.
They might not.
In my opinion it doesn’t work at all for some people.
@Gary – Alaska miles are far from worthless but outside of Condor business to FRA there’s really no award availability to Europe or Asia in business or first class without gruesome YQ. Why do you still think so highly of the program?
Well, I think international and premium awards might look a bit different. AA has devalued its Bus Class Transatlantic something fierce the last two years. I also don’t appreciate how they misrepresent fares — e.g., a trip looks like, say, 475K RT for the outbound leg but when you look to book the return, Oh, It’s 715K..
AA also, in a display of real chutzpah thinks their Bus Class trips on a 20+ YO 777 are worth more than a trip on a 1YO BA A350 which also has real cabin service to boot.
I am moving to Flying Blue this year.
@ Gary. I suspect that most of your readers have way far above the average point balance of the person collecting miles from credit card use and an occasional flight. Out of curiosity do you know what the average miles balance is for those in the respective airline miles accounts. I’m confident the airlines do and keep tangling that free travel carrot. I know some say that airlines don’t track a customers internet inquiries but I still get emails asking if I’m still going to wherever.