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Why it's getting hard to use miles to book your flight

Air miles are becoming a precious commodity as uncertainty grows about the outlook for ticket prices and the availability of flights.

Frequent flyers are increasingly using their miles to hedge against global travel chaos by making overlapping bookings across different routes per trip, according to travel experts. Because award tickets typically carry minimal cancellation fees, if at all, compared with bookings paid in cash, passengers can simply ditch the extra bookings at the last minute, they said.

That's resulting in plane seats, particularly those set aside for redemptions, running out fast, exacerbating an already challenging environment for travelers. With no end in sight to high airfares - fuel tankers are still stuck in the Strait of Hormuz despite a ceasefire - ghost bookings are unlikely to drop anytime soon unless carriers step up efforts to crack down on the practice.

"Volatility is the new norm and risk mitigation is key," said Leigh Rowan, founder of Savanti Travel, a high-end travel agency. "We consider miles an asset class."

Rowan, formerly chief operating officer at the Points Guy, a website focused on maximizing miles and credit card rewards, is urging clients to use their miles to book multiple flights to the same destination so they can shield themselves against soaring airfares and flight cancellations. That way, his clients increase the odds of getting to their destinations. They would also be able to cancel the award bookings and pay cash if prices fall, preserving their miles while locking in a cheaper fare.

As travelers look for flexibility, interest in mile redemptions has been soaring. Roame, which tracks the availability of award seats across more than two dozen airlines, has seen searches jump 44% in the month after the late-February closures. Rival PointsYeah, which processes millions of monthly queries, said searches for U.S.-to-Asia routes have surged as much as 50% as travelers reroute their flights to avoid flying through areas disrupted by the war.

"Using miles at a time like now is like low-risk insurance," said Rob Burgess, founder of travel loyalty site Head for Points. "They give you flexibility, and right now that flexibility is extremely valuable."

Travelers are flocking toward programs with flexible rules and broad networks. HeyMax, a travel rewards app that allows customers to redeem merchant spending for travel, said the transfers of reward points from its platform converted into Cathay Pacific Airways Ltd.'s Asia Miles jumped 130% in the month after the conflict erupted on Feb. 28, as the airline expanded service to fill gaps left by Gulf carriers. Transfers into United Airlines Holdings Inc.'s program - which allows free cancellation of award tickets and redeposit of miles at any time before departure - surged 800% over the same period.

"Users are really, really smart these days," said David Wang, HeyMax's head of loyalty partnerships. "They really think about the value of the miles that they earn and how to maximize them, especially now."

Prior to the war, savvy travelers would typically save their miles to upgrade their seats to premium economy, business or first class, rather than redeem economy tickets because of the better value, according to Tim Qin, chief executive officer of Roame. Now, higher ticket prices and redemption costs are pushing more people to use their miles to lock in a seat in coach, he said.

There's also the fact that there are fewer flights. War-related airspace closures have forced tens of thousands of cancellations, shrinking the pool of award seats, prompting travelers to use their points sooner before redemption costs climb.

Value per mile

"The chaos in the travel ecosystem - airspace disruptions, rerouting, longer flight times - has made me more focused on value per mile rather than just accumulation," said Kausshal Dugarr, who had planned a family spring trip to Europe earlier this year from his home in Bangalore.

Dugarr scrapped the idea to avoid flying through the conflict-hit Middle East. He instead used Japan Airlines Co. points to book direct flights to Tokyo.

The increase in last-minute cancellations and multiple bookings, which can leave airlines with unsold seats, raises the pressure for the industry to take further action, said Bryan Terry, a managing director at Alton Aviation Consultancy.

"The changing trends in frequent flyer redemptions are testing airlines' algorithms for inventory control," he said. "Airlines need to stop the arbitrage game."

Some airlines are moving to curb speculative bookings, an effort that predates the war. Etihad Airways tightened award rules last year, introducing a 72-hour cutoff for award cancellations, adding fees and imposing a penalty of 25% of the miles redeemed if frequent flyers change their minds on travel on some seats. A day before the Iran conflict began, United updated its terms to broadly ban multiple tickets used to undercut fares and circumvent inventory controls.

Qantas Airways Ltd. has automated sweeps to detect duplicate bookings that clog inventory. Duplicate bookings "can lead to a reduction in seat availability for other customers, and an increase in unnecessary waitlists," with flagged reservations subject to cancellation, according to Qantas' website.

United, Qantas and Etihad didn't respond to requests for comment.

At the same time, airlines and credit card companies are reducing the cost of those liabilities - by making miles worth less. American Express Co. recently reduced conversion ratios to some airline partners, including those of Cathay and Emirates Airline. Cathay is also raising award prices again in May - its third increase in under three years.

Seasoned travelers such as Dugarr have already adjusted, favoring flexible programs and airlines with lenient cancellation policies. He now prefers credit cards with transferable points, and is working with travel advisory firm Stratys, which advises clients on maximizing points for luxury travel, to diversify how he earns and redeems miles.

"The biggest shift is building in more flexibility at the booking stage," he said.

(With assistance from Leen Al-Rashdan.)

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