Airlines are sucking the value out of reward miles to cope with rising costs — why you 'need to be more strategic' now

The result is that dynamic pricing tends to devalue points, requiring higher balances for redemptions. In other words, your points aren’t worth as much as they used to be.

As far back as 2024, the U.S. Department of Transportation launched an inquiry into the rewards programs at major airlines, including American Airlines, Delta Air Lines, Southwest Airlines and United Airlines, over concerns about dynamic pricing and reward devaluation.

“There’s no question that dynamic award pricing, higher redemption rates on some domestic routes and added fees have made it harder to find the outsized deals that travelers enjoyed a decade ago,” Brian Kelly, also known as The Points Guy — a travel and credit card rewards expert — told The Associated Press.

But he says that doesn’t necessarily mean points have lost their value. “It just means consumers need to be more strategic about how they redeem them.”

How rising air travel costs impact rewards points value

The war in Iran continues to spike fuel prices, with about a fifth of the world’s oil and liquified natural gas supply held up in the Strait of Hormuz.

Since the start of the war, the price of jet fuel nearly doubled in just six weeks. Airlines responded by passing along fuel surcharges to customers, reducing flight frequencies and pausing less profitable domestic and international routes.

Indeed, airlines removed about 2 million seats and 13,000 flights in April, according to data from aviation analytics firm Cirium.

During peak travel seasons, flights become more expensive as demand intensifies. But this summer, geopolitical events are putting additional pressure on prices. Tickets are already 21% higher than last summer, according to the U.S. Bureau of Labor Statistics.

That’s not just impacting fares for seats. It’s starting to impact reward seats, too.

While all carriers have been impacted, the three main Gulf carriers — Emirates in Dubai, Qatar Airways in Doha and Etihad Airways in Abu Dhabi — have been hardest hit. And so have their loyalty programs.

It also impacts their partners. For example, American Airlines has a codeshare agreement with Qatar Airways while United Airlines partners with Emirates and Etihad Airways.

That means some planned redemptions may be in limbo. But the bigger risk is long-term devaluation, according to The Miles Market. “When airlines face existential financial pressure, loyalty program devaluations often follow — quietly, with little notice,” it says, pointing to how Emirates has previously devalued Skywards during periods of financial stress.

“If the conflict persists and fuel costs rise (longer rerouted flights burn dramatically more fuel), another round of devaluations becomes more likely,” it says.

Another issue is redemption availability. When fewer flights are operating, there are fewer reward seats available. So, even if you’re sitting on a ton of points, you might not be able to use them.

How to get more bang for your points

You can earn miles by signing up for an airline’s frequent flyer program, through a co-branded credit card for a specific airline or a credit card from a financial institution that doesn’t limit you to a specific airline and its partners.

If you don’t fly regularly with a specific airline, a credit card with broader redemption options may be a better fit. But, if the credit card comes with an annual fee, make sure the fee justifies the rewards you’re getting.

Credit card rewards aren’t just limited to flight redemptions. Higher status tiers also allow for other perks, such as free checked bags, priority boarding, airport lounge access and travel insurance. If you don’t travel much, the annual fee may not be worth it.