Peter Greenberg Sounds the Alarm.. and Shoots Himself in the Foot

Over the past week I’m taking on the icons… scolding Tim Winship, Joe Sharkey, and now Peter Greenberg — who is much more famous than I am.

Peter Greenberg thinks the mileage sky is falling.

The airlines know at the very moment they sell those miles they have no intention of redeeming about 89 percent of them! This is a bigger return on investment than just about any legitimate business you can imagine. It is, from the airlines’ point of view, a brilliant scheme.

And since there is no government regulation of these programs, the airlines can — and do — change the rules at will; they are not required to reveal how many award seats are available on any flight (if at all), and therein lies the big payoff for the airlines.

Get that? “since there is no government regulation…”

Clearly we need to bring back to Civil Aeronautics Board, which was so great at setting prices and regulating the thickness of sandwiches, to handle yield management for United’s redemption deals with Singapore Airlines. That’ll get me that elusive first class redemption seat on the A380!

But in Greenberg’s world it couldn’t get worse.

For consumers, even though we are addicted to these programs, it’s becoming tough, and in some cases impossible, to redeem the miles.

And yet I’ve never failed to redeem for the award I’ve wanted, as I’ve mentioned here several times. In the next 10 weeks I have first class award bookings to South Asia, business class award bookings to Europe, and a domestic award as well. All on the dates I needed.

But I’ve accumulated miles in a variety of accounts, if United doesn’t have availability I can check to see what American (or British Airways) has to offer. I don’t trust the airline websites to search properly, or the customer service agents to vigorously seek out every possible routing. I use the tools at my disposal, such as the ANA Mileage Plan website for Star Alliance awards (which doesn’t cover Swiss) and the Qantas website (which doesn’t cover Cathay Pacific). And I search all possible routings myself. Yes, it’s work, and in a perfect world I might not need to, but it’s my competitive advantage and it pays off.

Greenberg doesn’t like airline economics, either.

Want the real insult? Assuming an airline does, in fact, redeem your mileage for a ticket, the actual average cost to the airline to do so is slightly more than $23. That’s it.

He seems to have a problem with the idea that carrying a marginal passenger doesn’t cost much for the airline… Since the plane is already flying, burning fuel, employing pilots and flight attendants and gate agents, etc. When the mileage program is buying a seat the airline expected to go empty, that program buys it at something approximating marginal cost. Somehow this is insulting.

But after all this blather, some basic advice. Consider alternate airports, alternate routings, partner airlines, and off-season.

Not revolutionary, but good advice. Still, the specifics offered for trying alternate routings suggest the author doesn’t know as much as he thinks he knows.

If you’re flying New York to Hong Kong, go New York to Vancouver, Vancouver to Hong Kong.

Ok, Continental’s Newark-Hong Kong non-stop is a tough flight for redemption. But somehow Cathay Pacific’s flight to Vancouver and onto Hong Kong is easier? Ok, anything is easier than Continental. But I’d two score a couple first class seats on the Cathay Pacific flight Peter Greenberg recommends. Maybe he’ll keep checking availability for me?

And finally, if you’re trying to get from Dallas to Hawaii, again, the nonstop will probably not be available for frequent-flier award tickets. Instead, fly Dallas to Phoenix, then Phoenix to Honolulu, and on the return, Honolulu to Seattle, Seattle to Dallas.

The non-stop from Dallas to Hawaii is clearly going to be on American. Phoenix to Honolulu is going to be USAirways. So let’s assume that the person redeeming has miles in a oneworld and a Star Alliance program.

Greenberg thinks they’ll have better luck flying USAirways and then returning Honolulu to Seattle on… Alaska or Hawaiian? Now, Dallas to LA to Hawaii on American can be combined with Hawaii to Seattle on Alaska. But that’s not what Greenberg is suggesting is possible.

But if it was possible, and you find yourself an outbound flight you want, Greenberg says to ticket it with a less desirable return, and change up later.

What’s really important here is to confirm the outbound flight and date you really need, and worry about the return flight later.

And for goodness sakes, just burn those miles and worry about the specifics later!

Also, even if you’re not sure about where you want to go or when, try to redeem your miles now for future flights at the current mileage award levels. You can always try to change the ticket later, but remember, those mileage eligibility levels are only going to increase, and at the same time the number of available seats will decrease.

Here I think Greenberg has at least some responsibility to caveat the advice that different airline programs have different rules with respect to changes to award tickets after booking. For example, you can’t keep an outbound and change a return with Lufthansa, at all (unless the outbound remains available once you give up your booking). United requires a fee to change your routing prior to departure, waived for 100,000 mile flyers. And if it’s an award involving a partner, no changes after departure at all.

Now the award for the worst piece of advice I’ve ever read.

If you have miles in another account — like American Express — you gain nothing by leaving those miles in that account. Transfer them over to one of your individual airline frequent-flier mileage accounts — even if you have no plans on flying soon. If you don’t, it can take two to three weeks to make the transfer when you want to redeem the miles later. And the airline won’t recognize your miles until they are in your airline account.

In the American Express Membership Rewards program your miles are flexible. They can be transferred into any of a number of programs, you get to decide later once you know where you’ll need them to go. Once you transfer, you can’t move them back, you lose this flexibility. Sometimes there are bonus offers good enough to encourage you to make a transfer without a specific need. But to say “you gain nothing by leaving those miles in” Membership Rewards is just asinine.

Maybe you transfer to Delta, but Delta and its partners have no availability for the flights you want. But United does. United isn’t a transfer partner with Membership Rewards, but you could transfer your points to Air Canada (or ANA for that matter) and redeem those United flights.

Greenberg cautions this strategy doesn’t work because you need the miles in your airline account in order to redeem an award.  Greenberg doesn’t know what he’s talking about.

In fairness, different airlines offer different levels of flexibility to hold an award pending transfer of miles. But in most cases, with most of their partners, Amex is ‘live’ with the airline mileage program. The transfer is literally instantaneous. It used to be with USAirways when they were a partner. It definitely is with Continental and Delta and Air Canada (because I’ve made those transfers myself).

And there’s less risk keeping those miles in an Amex account than in an airline account. Less risk of devaluation, if your favorite program changes reward levels you can transfer somewhere else. Less risk of bankruptcy, American Express isn’t going anyway (at least they’re less likely to than the median airline).

So please don’t listen to Peter Greenberg. Leave those points in Membership Rewards until you know you need them somewhere else.

I won’t even touch the next suggestion to avoid mileage earning credit cards in favor of cashback cards.  This post is already long enough.

But there’s so much bad advice out there. Send me some more examples, we need to expose these errors to improve the quality of journalism and make sure people don’t misues their miles and lose out on great opportunities.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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