Loyalty Members Have Amassed Billions of Unused Airline Miles
As travel demand hit rock bottom in 2020, points and miles balances in loyalty programs started increasing. Customers were still earning rewards by signing up for new credit cards and using them for everyday purchases, but they weren’t using those rewards as much as in the past.
Even though the earning rate was almost half when compared to 2019, the redemption side saw an even larger drop as travel was virtually halted for many months during the pandemic. Some of that lower earning could also be due to increased spending offers for bank points such as Chase Ultimate Rewards, Amex Membership Rewards, Capital One Miles and Citi ThankYou points.
A new ValuePenguin study found that the five most valuable airline loyalty programs in the U.S. – Delta Air Lines SkyMiles, American Airlines AAdvantage, United Airlines MileagePlus, Southwest Airlines Rapid Rewards, and JetBlue TrueBlue – ended 2020 with a combined balance of $27.5 billion in unused loyalty program miles. That was an increase of $2.9 billion from the previous year. That was more than triple the increase of $889 million increase the year before that.
Customers of those five programs earned a combined $6.8 billion worth of miles in 2020, 46.2% less than the $12.6 billion worth of miles they earned in 2019. They only redeemed about one-tenth of the miles that they had earned, resulting in that $2.9 billion increase in balances.
“Ultimately, this glut of miles might end up leading to more devaluation,” LendingTree chief credit analyst Matt Schulz told Value Penguin. “That would help airlines as they continue to try to recover financially from the devastation wrought by the pandemic, but it would not be great news for consumers.”
With devaluations possible, and airlines possibly resuming miles expirations soon, this is a good time to start planning travel if you are comfortable to start flying again. Devaluations are often unannounced which means that the value of your stash of miles could suddenly become worth less overnight. So start booking early and try to be flexible with your travel plans. With more people getting vaccinated, and travel restrictions loosening up around the world, demand will be higher than usual for award seats.
Let us know how your earning and redemption patterns have changed during the pandemic, and what your plans are for the near future as far as travel goes.