Confusing frequent-flyer programs leave Canadians scratching their heads

Frequent-flyer programs can be a boon for many travellers, allowing them to accrue miles so they can save on pricey flights.

However, exchanging miles for rewards isn’t as simple as it used to be.

Earlier this month, the U.S. Department of Transportation wrote a letter to the Office of the Inspector General, a federal watchdog agency, saying that American travellers have become confused by the “complex algorithms” involved with frequent-flyer programs.

In particular, they pointed to the systems that weigh dynamic variables to determine how many miles travelers need to exchange for a flight.  For example, the factors that lead to a flight near the Christmas holidays costing more miles than one in the middle of April.

And according to Patrick Sojka, founder of travel-tip website Rewards Canada, frequent-flyer programs in Canada are also leaving consumers north of the border scratching their heads.

“They see the marketing from credit cards and the programs, taunting them with a free flight for only 25,000 miles, but when they go to redeem for the flights they want, and the program is asking for 40,000 miles, they don’t understand why,” Sojka told Yahoo Finance Canada.

“They simply want to fly from A to B for 25,000 miles.”

Sojka said Aeroplan Market Fare Flight Rewards is one of the frequent-flyer programs that employs the same complicated system which sees the price of miles required vary in accordance with the actual price of the ticket.

“If there is a seat sale, you may actually pay less miles than is posted in the chart, but if the flight is quite full and tickets are selling at a higher price you’ll be paying more miles than are posted in the chart,” Sojka explained.

Much of the confusion can be blamed on the reward charts used by Aeroplan and other plans such as Air Miles and Delta Airlines Sky Miles in the U.S., which lay out how many miles need to be redeemed in exchange for flights but aren’t actually fixed.

“Yes, the programs publish award charts and the amounts are listed. In there is the minimum amount of miles needed for a flight, but those redemptions tend to be more restricted and are limited in availability,” said Sojka.

The miles required also increase based on the busyness of the flight and its demand overall.

“So where someone thinks that they may get a flight between Toronto and Los Angeles for 25,000 miles, because that’s what the chart says, but then go to redeem and the rate is 37,500 or more miles, is where some of this confusion comes from,” said Sojka.

Sojka said some users are also perplexed by the math that determines how many points you accrue. He said one mile flown no longer necessarily equals one mile earned towards your account. The earn rate now depends on whether you flew in first class, business or economy.

“Buying the cheapest ticket possible? Chances are you won’t earn 100 per cent of the miles you flew,” he said.

In contrast, Sojka said WestJet’s frequent-flyer program, WestJet Rewards, is the simplest to understand because it functions in the same vein as a cash back system – when you earn one WestJet dollar that equals $1 of real airfare.

Part of the problem may be that many of these frequent-flyer programs have been left unchecked. The Canadian Transportation Agency only has jurisdiction over those that are run by air carriers, which leaves independently owned programs, such as Aeroplan or Air Miles, outside their control.

“The agency does not have the authority to deal with complaints about independent loyalty programs,” a representative for the transportation authority told Yahoo Finance Canada. 

The CTA’s rules specify that air carriers must explain their loyalty programs in their tariffs.

In 2014-15, it received three complaints related to carrier-operated loyalty programs in relations to missing points, redemption or reservations. The previous year it received four.

Sojka said to the best of his knowledge the CTA has “not done anything to crack down on the cloudiness” surrounding loyalty programs.

“I believe there have been some individual cases where consumers may have complained, but ultimately the complaint is shut down because the program has the answer clearly stated in their terms and conditions,” he said.

However, Sojka still recommends that consumers use programs such as Aeroplan and Air Miles because of their partnerships across Canada, which make it easy to rack up points.

“You may not get flights, but you can use those miles for other redemptions,” he said.