Air Miles has just dramatically changed the Flight Rewards component of the program. Gone are the distance-based, seasonal reward prices. Instead, the miles required will more closely align with the cash fare. For those of us who avidly collect Air Miles, it’s a good idea to see what this means and whether it’s a program that still merits our attention for travel purposes.
Air Miles Flight Rewards
As the name of the loyalty program implies, using these points for travel has long been a popular choice. Until recently, Air Miles had a distance-based chart with peak season and off season reward pricing.
I’ve been tuned in to the program since before flights became bookable online and I only recall one devaluation when base rewards were adjusted upward. They also became variable, with the base level redemption remaining as a benchmark minimum. However, over time, and in spite of status or credit card discounts and occasional airline-specific specials, finding availability at or near the base level became more and more difficult.
Dynamic Reward Pricing
The general trend toward dynamic pricing in travel loyalty programs meant this transition was probably inevitable and the removal of the reward chart from the website earlier in the year signalled the impending doom/change.
Dynamic pricing means flight rewards tied more closely to the cash fare and the resulting loss of sweet spots. On the flip side, there is elimination of irrational redemptions (sour spots?) where the miles required are unreasonably high. Still, it’s all theoretical until you search for flights and see where your miles will actually take you.
Ahead of the switch, I wrote a blog post detailing several flight search results departing from Nova Scotia to compare with the new booking system after it went live. I chose round-trip flights of various distances where the base level reward was available for randomly chosen dates in 2022.
Now, here are the current results (from an Onyx account) with the previous results in parentheses:
Halifax – St. John’s
1940 + $158
(1020 + $158)
Halifax – Iles de la Madeleine
7050 + $110
(1500 + $110)
Halifax – Whitehorse
8290 + $149
(6200 + $142)
Sydney – Orlando
5200 + $203
(4000 + $166)
Halifax – Paris
April 9 – 16
2560 + $814
(4700 + $797)
Halifax – Sydney, AU
16520 + $390
(15,000 + $275)
Halifax – Auckland
18,000 + $262
(20,000 + $262)
At first glance, these results do not look positive; the starkest example being the YGR trip. Short-haul redemptions for otherwise expensive flights were always one of the best features of the Air Miles program. If you happen to live close to a smaller airport with steep cash fares, Air Miles were a great money-saver as long as you could find availability.
Another downside is that despite a lower reward price, the surcharges remain absurdly high for transatlantic flights as shown by the Halifax – Paris example.
However, there are more flights to choose from, so that’s a gain. Case in point, the non-stop from Halifax to Newark (the only year-round non-stop to NYC) was always elusive, but now it shows up on every date I checked.
And there are flights where the miles required are fewer than the base reward in the old version. For example, flights to Florida from the Maritimes were overpriced in miles (4000/3200) and now there are lots of dates with redemptions under 2000. Of course, the corresponding airfare is similarly cheap, but you now have the option to use your miles when previously it was only reasonable to do so when cash fares were especially high.
Another notable change involves one-way flight redemptions which previously commanded a premium at the base level. This is no longer the case which could be beneficial when booking flights within North America, but not so great for international flights where one-ways are often priced as much or more than a round-trip so presumably reward tickets will be likewise expensive.
The Cash vs. Dream Dilemma
Even under old system, it was important to compare the value of your prospective Dream miles flight redemption against the Cash mile value (95 = $10) with the goal of exceeding that if possible. If not, then you would have received more value from earning Cash miles and redeeming at participating partners (and perhaps setting those savings aside for travel.)
In this new version, exceeding the Cash mile standard when using Dream miles for a flight redemption will be even more challenging with flight rewards so closely linked to airfare and outsized value a scarce commodity.
When searching flights, look for one ticket on miles and one paid fare to see a direct comparison.
You can check out some points and miles blogs for a detailed value analysis of the new flight rewards, but I suggest you also spend some time surveying the options yourself. Hopefully in the future Air Miles will introduce a flexible date search to make it a bit easier or at least allow members to check all of a given city’s airports where there is more than one (like London, New York, Washington, Toronto, etc.).
The 15% North America discount for holders of the BMO Air Miles World Elite Mastercard along with the status-based and airline specials might move the needle a little toward sticking with Dream over Cash, but it’s certainly a question many Air Miles members will want to consider.
As with booking cash fares, you’ll need to monitor flight rewards closely to take advantage of any dips in the mileage price.
Dynamic Duo: Aeroplan and Air Miles
Now that two of Canada’s major travel loyalty programs have moved to dynamic reward pricing, I think it would be worthwhile to do a comparison on both the earning and burning side for collectors here in the Maritimes – but that’s a topic for another day. I will say that my opinion of last year’s Aeroplan revamp continues to be generally positive, whereas I’d say the jury’s still out with Air Miles. It would surely be nice to see family pooling of Air Miles as is now offered by Aeroplan.
As a keen Air Miles collector who has redeemed Air Miles for several flights over the years, I knew this change would have both positives and negatives.
In the old format, the base reward of 1500 miles for flights from the Maritimes to the closest U.S. zone (as far as Illinois and Virginia) was a big draw, along with the Quebec and Ontario zones when cash fares were high. Conversely, transcontinental or transatlantic flights were not really in the picture due to their relatively poor value.
Now it feels like all destinations are on the table. With more airlines in the mix and the possibility to book flights that don’t start or end in Canada, the options for redeeming miles have expanded.
The ability to book premium cabins is an interesting addition as well, but the extra miles required will be correspondingly substantial.
While I still think Dream miles are worth collecting, it’s probably wise to reevaluate your points and miles strategy in light of the changes. Consider your future travel plans and whether an Air Miles flight redemption is worth pursuing.