Frequent Flyers Turn Miles into Insurance Amidst Chaos

Air miles are becoming a valuable asset as global travel faces increasing uncertainty regarding ticket prices and flight availability. Frequent flyers are now using their miles to make overlapping bookings across different routes for a single trip, effectively hedging against potential travel disruptions. This strategy is feasible due to the minimal cancellation fees associated with award tickets compared to cash bookings.

This surge in "ghost bookings" is rapidly depleting available award seats, exacerbating an already challenging environment for travelers. The practice is unlikely to subside unless airlines implement stricter measures to combat it. Travel experts emphasize that in this era of volatility, miles offer a low-risk form of insurance, providing crucial flexibility. Some airlines, like Etihad and United, have already tightened their award rules to curb speculative bookings.

Cathay Pacific is raising award prices for the third time in under three years, and American Express has reduced conversion ratios to some airline partners. These moves by airlines and credit card companies aim to devalue miles, essentially reducing their liabilities. Seasoned travelers are adapting by favoring flexible programs and airlines with lenient cancellation policies, diversifying how they earn and redeem miles to build in more flexibility from the booking stage.