The only thing better than finding cheap airplane tickets or cheap vacation packages is the ability to fly for free. The recently announced United Continental merger will not result in any frequent flier miles being lost, but using those miles in the future may prove more difficult.
One of the biggest benefits of an airline merger is that ability of the merged airline to reduce capacity. The merged airline typically strategizes how to fly less unprofitable seat miles by cutting back on the total number of its flights.
The premise behind frequent flier programs that are properly managed is that airlines can limit free frequent flier seat awards to seats that would otherwise go unsold. Load factors (the average percent of seats sold on flights) were once in the 60 percent range, whereas now, after airlines reduced their capacity over the last two years, is in the 80s.
With additional capacity reduction as a result of this merger, it will become increasingly tough to find award seats. Given that increased demand usually drives higher costs, airlines are expected to increase the number of miles required to secure a free ticket.
Currently, many airlines charge 25,000 miles for a round trip ticket in the continental U.S. However, if no award seats are available when a passenger wants to fly, often any available seat can be selected by a frequent flier willing to spend 50,000 miles for that ticket.
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