In recent years, frequent flyers and loyal airline customers have become increasingly frustrated by a disturbing trend: the devaluation of their hard-earned miles and points. These loyalty programs, once seen as a valuable perk for frequent travelers, have steadily eroded in value. This trend has become so concerning that the Biden administration has decided to investigate how airlines manage and devalue frequent flyer points. It’s a welcome move for consumers who have long been subjected to unpredictable and often steep devaluations.
At Themilesmarket.com, we’ve been talking about this issue for years. In fact, airline miles have been devaluing at a rate far outpacing inflation—around 15% annually. This constant devaluation leaves people sitting on large sums of miles at risk of losing significant value if they don’t act quickly. Whether you want to sell your miles or use them to book flights, now is the time to lock in their current value before they lose even more purchasing power.
We’ve discussed this devaluation trend in depth in a previous article here, illustrating how travelers lose significant value over time if they don't use or sell their miles quickly.
Airline Miles and Points: The Inflation No One Talks About
While most people are aware of general inflation—prices of goods and services going up every year—few realize that airline miles experience their own form of inflation. Airlines regularly increase the number of points or miles required to book flights, with little to no warning. What might have once cost 50,000 miles for a round-trip business-class ticket could now cost 80,000 or even 100,000 miles.
This stealthy form of inflation is not tied to external market forces but is rather a decision made by airlines themselves. And they do it often. According to our analysis, the average annual devaluation of miles is around 15%. Compare that to the U.S. inflation rate, which hovers around 2-3% per year, and it becomes clear that frequent flyer miles are depreciating far faster than the dollar.
Imagine if your bank told you your savings account would lose 15% of its value each year. You’d probably pull your money out, right? Yet millions of people continue to stockpile airline miles, not realizing that they are losing value at a staggering rate. The unfortunate reality is that unlike traditional savings accounts, where inflation is relatively predictable, airline miles are controlled solely by the airlines, which can devalue them at will.
The Biden Administration’s Investigation
It seems the federal government is finally taking notice of the airlines’ practices. Transportation Secretary Pete Buttigieg has written to the CEOs of the four largest U.S. airlines—American, Delta, Southwest, and United—demanding transparency about how they manage their frequent flyer programs. The investigation is particularly focused on how airlines often devalue points, increase redemption costs, and limit the availability of seats that can be purchased with miles.
"These rewards are controlled by a company that can unilaterally change their value," Buttigieg said in a recent statement. "Our goal is to ensure consumers are getting the value that was promised to them, which means validating that these programs are transparent and fair."
Airlines have long profited from these loyalty programs, primarily through credit card partnerships. Consumers accumulate miles not just through flying but by spending on airline-branded credit cards. While these miles are earned through everyday spending, they are at the mercy of the airlines, who can alter their value anytime they wish.
The investigation is long overdue. Passengers often feel blindsided by sudden increases in the miles needed to book a flight or by restrictions that limit the number of available seats. These frequent and arbitrary changes create uncertainty, making it difficult for consumers to maximize the value of their points.
Why This Matters
For many travelers, miles and points are not just a bonus—they are a form of currency. People use them to book vacations, visit family, or even upgrade their business travel experience. When airlines arbitrarily devalue miles, it’s like losing money out of your pocket.
Frequent flyer programs were originally designed to reward passengers based on how much they flew. But in recent years, they have shifted to rewarding consumers based on how much they spend, particularly through credit card purchases. This has made loyalty programs a significant source of revenue for airlines, with billions of dollars in credit card partnerships fueling their bottom lines. Unfortunately, it has also led to a scenario where airlines prioritize profit over customer loyalty.
For travelers sitting on large amounts of miles, the risk of devaluation is ever-present. Airlines often provide little warning before they make major changes to their loyalty programs, leaving passengers with fewer options to use their miles effectively. And as airlines continue to rely on these programs as revenue streams, the trend of devaluation is unlikely to slow down.
What You Can Do to Protect Your Miles
If you’re sitting on a large stockpile of miles, now is the time to act. Every day you hold onto those miles is a day they lose value, especially with airlines increasing redemption rates by about 15% per year. The Biden administration’s investigation might bring some transparency to the process, but there’s no guarantee that the airlines will stop devaluing points.
Here are some actions you can take right now to protect the value of your miles:
- Book Flights Now: If you’ve been eyeing a vacation or need to travel soon, use your miles while they still hold significant value. By booking now, you lock in today’s rates before airlines inevitably increase redemption costs again.
- Keep an Eye on Airline Announcements: Airlines usually provide some warning before a major devaluation, although not always. Stay informed about upcoming changes and act quickly to redeem your miles before the new rates take effect.
- Sell Your Miles: If you don’t have immediate travel plans, consider selling your miles. At Themilesmarket.com, we buy airline miles, allowing you to lock in their current value. This way, you don’t risk further devaluation, and you get cash in hand for your miles. The process is simple, transparent, and fair—exactly what airline loyalty programs should be.
Our Recommendation
At Themilesmarket.com, we recommend that travelers either book flights with their miles or sell them to us to lock in their value before they devalue further. Sitting on a large amount of miles is risky, as airlines can—and likely will—continue to devalue them at an alarming rate. The Biden administration’s investigation might bring about some positive changes, but in the meantime, your miles are losing value. Take action now to secure their worth, whether by booking a flight or selling them for cash.
The bottom line: Airline miles are a valuable asset, but only if you use them before they lose their value. Don’t let your hard-earned points go to waste—make them work for you today!
