It may seem like everyone is at home, travel isn’t a motivator, and everyone just wants cash back cards that reward spend on toilet paper and hand sanitizer but that view is pretty much six months ago.
Domestic travel is recovering ahead of international travel, and it’s going to take time before we’re traveling the world again. Even with vaccines approved in the U.S. as soon as next month, it’ll be the end of the second quarter before most of us have access. And that doesn’t mean the whole rest of the world has access right away. So international travel is going to be hobbled for a little while.
ANA’s ‘Old’ First Class
So expect to have to jump through a few hoops like proof of vaccination prior to arrival, but the world is going to open up again. And as it does there’s going to be more airline capacity than travelers for awhile.
That’s great news for frequent flyer miles, because it’s those unsold seats that get made available for the fewest number of points. Award availability is going to be easier than we’ve seen in the decade since the Great Recession.
Etihad First Class
U.S. frequent flyer programs aren’t the most valuable. In fact some airline programs seem almost allergic to the idea that some consumers somewhere might actually benefit in an outsized way from what they offer. United and Delta have actually devalued their award prices for travel on partner airlines during the pandemic. And when we see promotions they aren’t especially rich – either it takes a lot more from the customer compared to what the program is willing to give, or earning is capped at very low levels.
The real value comes from airlines around the world who won’t so quickly devalue, and whose airlines will begin to ramp up service perhaps before demand fully returns. Expect to see a lot of award seats available on Emirates, whose planes like Airbus A380s and Boeing 777s are too big for many routes at least for awhile.
Cathay Pacific Business Class
And the way U.S. consumers can best get those miles is transferable points programs. Sure, you can go all in with an Emirates credit card from Barclays but you’ll earn more miles faster with a Chase or American Express card with rich bonus categories, and then transferring the points to Emirates or some other airline that has the award availability to match the trip you want when you want it.
There are going to be big winners in the credit card game once travel re-opens, and the world’s airlines start flying planes they can’t fill up. But it’s more complicated to take advantage of than just spending your travel rewards points directly for a ticket or transferring miles to Delta.
It takes paying attention to where these airlines go,how some of these programs work and how to use them, getting into the weeds. In other words, we’ll see a bifurcated world of frequent flyer haves and have-nots based on a moderate threshold of effort.
Thanks Gary;
I want to go to Europe without going to through the Middle East or Asia. Done ME and Asia enough times.
I don’t want to pay high fuel surcharges so that eliminates BA
Iberia is pretty good, who else has reasonable availability?
@ Gary — Ready and waiting! One pandemic down, one to go.
Gary, Im not sure you’re assumption that going forward these airlines will open up award space if there’s unsold revenue holds true. There are plenty of cases in the past (on multiple different airlines) of flights departing with empty seats and with zero award availability. There would need to be a large shift in mgmt thinking (and possibly IT systems changes) for airlines in order to change the somewhat stingy award habits on some of these airlines. Even right now, we are hearing stories of airlines blocking redemptions, using partner miles for example.
@beachfan – I almost always use UA miles (Chase points transfer) to get to Europe. Lots of redemption options with no surcharges.
I’d say a good number of people are preferring to fly nonstop to minimize possible exposure to covid. I think Emirates product is great but I have no plans of flying it unless I’m planning to go visit Dubai.
I’m not seeing a bonanza of opportunity just yet lol. Make a calendar reminder to follow up on this post in six months
Weird. I just read an article saying SQ has pulled their first class availability until Oct 2021. Seems more like my points are being devalued than I am somehow in the position of obtaining a great value when travel starts up. International travel? Expect closed lounges, reduced services at hotels etc. I understand the desire to push credit cards for your business model, but this sounds like puffery and nothing more. Prices are reduced on domestic flights so not sure why I would want to use miles on domestic flights not to mention the fact the situation in the US continues to worsen and will be way worse by the time we hit 2021. If you think the roll-out of the vaccine is going to go smooth when we have Trump who just golfs everyday while people die and Biden being shutout of access to the top government scientists then you are delusional. Cash back is still the way to go and when travel does come back there will be significant demand from paying customers not to mention the fact all those people with point surpluses that they haven’t been able to burn for several months. It will be all but impossible to get good redemptions and that is before we see potential devaluations to programs. Would never recommend to anybody to be getting points cards now.
@Gary – I hope that you’re right but do you really see SQ and CX offering two saver first class award seats per flight under reasonable terms (not offering seats only within 12 hours of departure or some such)?
Yes, but the value per mile is going to get even worse!
Cash fares will drop as airlines scramble for cash to pay salaries, suppliers, and interest; for them getting more cash in their coffers is going to continue to be more important than reducing the (non-cash) liability from unredeemed miles. To drive this behavior airlines will be giving out even more miles (remember post-9/11 triple mile promos?) creating an even higher balance of miles whose devaluation is certain.
During a recession cash is king. This is a self-serving disinformation piece. Sign of the times!
@Amy You are right. Cash is king and will continue to be for years to come. But Gary’s point is that there will still be some arbitrage opportunities with points for those folks who do their homework.