How much money can you save by being loyal to an airline? Is paying a higher fare now going to pay off in the future? Trying to figure this out can be maddening, as every airline’s reward program grants and redeems its loyalty currency differently. Determining the value of the schemes is complex enough a task that it is often discussed in the language of central banking policy rather than simple marketing perks.
But a new report (pdf) has tried to cut through the complexity and offer a simple metric of value: Payback, or the financial return (in reward flight value) as a percentage of money spent on previous flights.
The study found that JetBlue’s TrueBlue program offers the best payback out of any of the most popular US airlines. Its basic rewards program would offer a 7.9% payback. In close second was Alaska Airlines with 7.8%.
Payback was calculated by determining how many times a traveler would have to fly before earning an equivalent free flight through accrued points. For instance, if a reward trip between Boston and Miami required 25,000 miles and the same trip would cost $300 while accruing 2,516 miles, you would need to buy about 10 trips before earning the 25,000 miles needed for a reward. Which would mean that your eleventh flight was “free” and your “payback” would be 10% since you paid $3,000 to get a reward worth $300.
The study was conducted in March 2016 by IdeaWorks, a travel industry marketing consultancy, and sponsored by Switchfly, a B2B travel services provider. It was conducted by searching each airline’s website for 140 medium distance routes (250-2500 miles) and recording the cheapest price needed for travel on points as well as dollars. With many airlines now offering accrual based on ticket fare rather than distance flown, these figures are lower than they would be for business travelers, who often fly on pricer tickets.
The study doesn’t take into account bonus points that would be earned by using an airline’s credit card or a by so-called elite travelers—typically those who travel more than 25,000 miles a year on a single airline. Some loyalty programs offer bonus miles to their elite flyers that could double the number of miles earned or more. As such, the conclusions above are most accurate for less-than-frequent travelers who aren’t flying enough to earn those milage accrual bonuses and don’t have an airline’s credit card.