The airline industry has pounded into our heads over the years how valuable frequent flyer programs are.  They are advertised as a money saver for just about everything under the sun.  From hotel rooms, gasoline, credit card rebates, and of course air travel.  The concept is simple, fly on a certain airline and they will give you points to redeem either on a later flight or with one of their partners.  For example, credit card companies or hotels.  In most cases you get one point for each air mile traveled.  It sounds simple but the details can be harder to figure out than quantum mechanics.

Some of the things that the airline doesn’t tell us are that the actual value of a used point is less than 2 cents per mile.  To put this into perspective, if you take a 1000 mile trip, the value you will receive would be $20.  Not bad, every little bit helps, right?  To make matters even worse, because the vast majority of mileage points are never redeemed the airlines place an actual value of a frequent flier mile as less than 1/1000 of a cent.  If you do the math you will see who is actually benefiting from the plan.

Another detail they don’t like to publicize is that in a lot of cases the points you have earned are almost impossible to redeem.  For instance, you walk into a hotel and tell the friendly desk clerk that you want a room and you want to use your frequent flyer miles.  He looks in his computer and tells you that there are no “award rooms” available but they would be happy to put your room on a credit card.  If you ask them when you reserve a room to use your frequent flyer miles the common answer is that you have to reserve the room as much as a year in advance.  This problem is becoming the norm rather than the exception.  Even on flights that you want to take you still have to have a special “award seat” which are extremely limited.  In addition, these “award seats’ are the first to be bumped due to over booking.

Many plans also partner with car rental companies.  In theory, you can earn free rentals at many major companies, but in reality you run into the same problem you face with hotels.  The cars available with the points is usually for cars that are currently “not available.”  Another selling point is that if you use your airline credit card to pay for your flight, rental car, or book a hotel room you will earn double points.
Most airlines offer credit cards through their partners where you can earn additional flyer points.  But, the same problems exist with these points.  So, in essence the airlines are providing you the opportunity to go into debt to earn more points.

Unavailability of services teamed with the actual value of the points earned makes the frequent flyer deal anything but a deal.