The Risk of Getting Locked Into One Airline Loyalty Program

Miles are not a currency you control

A mile in your account is a promise from an airline, not money in a bank. The program's terms give the airline broad room to raise the price of awards, change how status is earned, or restrict which flights are bookable, and members have little recourse when it happens. This is normal, ongoing behavior across the industry, not a rare event.

Real examples from the past year

The worst case: an airline goes out of business

Spirit Airlines is the clearest recent example of the risk hoarding creates. After a second bankruptcy filing converted to full Chapter 7 liquidation, Free Spirit points became worthless immediately, with no warning and no way to move the balance to another program. Compensation for stranded points and credits was left to a bankruptcy court process with very low odds of any recovery for members. If an airline shows real financial distress, spending down its miles quickly is safer than continuing to bank them.

How much do award prices actually rise over time

There is no single industry-wide index that tracks award price inflation across every program, but independent point valuation trackers publish monthly updates showing individual programs moving, sometimes up and sometimes down, from month to month. The Aeroplan and LifeMiles examples above show that increases of 20 percent or more in a single update are realistic and have happened within the past year, not a rare, distant risk.

Practical ways to reduce your exposure

• check_circleDo not stockpile miles for years waiting for a perfect redemption. Spend them within a year or two of earning, since prices can rise with no notice.
• check_circleKeep meaningful balances in at least two programs across different alliances rather than putting everything into one airline.
• check_circleWatch for financial distress signals at smaller or struggling carriers, and treat their miles as higher risk than a financially healthy major airline's.
• check_circleBook a good redemption when you find one instead of waiting for a theoretical better deal, since the theoretical deal may simply get more expensive instead.

Common questions

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