This year’s airlines with the most and least valuable points

For the last four years, if you wanted to collect the most valuable airline miles among U.S. carriers, you’d probably collect Southwest
LUV,
-1.96%
Rapid Rewards points. According to NerdWallet’s valuations, Southwest Airlines points have hovered around 1.5 cents per point since 2019 (when we started collecting the data). That means travelers can usually redeem 10,000 Southwest points for a $150 award flight.

Let’s put that in perspective. In 2020, Southwest Rapid Rewards points were worth a whopping 1.6 cents, while every other major U.S. airline’s points were worth only 1 to 1.1 cents. Southwest Rapid Rewards members could book more flights (or more expensive flights) because their points were worth almost 1.5 times as much as everyone else’s.

But other airlines started catching up over the past three years. In 2022, Southwest, Delta Air Lines
DAL,
-0.29%,
American Airlines
AAL,
+0.08%
and JetBlue
JBLU,
-1.55%
all tied for the most valuable miles. And this year, Southwest has finally lost its crown to … American Airlines.

Yeah, it’s a surprise to us, too, considering American Airlines did away with its domestic award chart in April and got rid of its low-cost SAAver and AAnytime awards. Usually, airline and hotel programs that switch to dynamic pricing — instead of using award charts — have lower point values, not higher.

So why are American Airlines AAdvantage miles worth so much now? And how did the rest of the airlines fare in our annual analysis of airline and hotel points? Here are some of the highlights from our latest data.

Plus: Want to add a rental car or hotel to your flight reservation? Here’s why you shouldn’t bundle your travel bookings.

How have points changed in value last year?

To calculate the value of airline miles and hotel points, we collect real-world data on thousands of flights and hotel stays and compare cash prices and award prices to determine the baseline value of each loyalty program’s points.

American Airlines miles are worth 1.7 cents this year, up from 1.5 cents last year. The next highest are Southwest and JetBlue, which haven’t changed in valuation and remain at 1.5 cents per point.

Alaska Airlines miles climbed this year to 1.4 cents. They’re also partners with American Airlines through the Oneworld alliance.

Frontier Airlines also added a few tenths of a cent, so their miles are now worth 1.1 cents. They’re at last out of the under-1 cent valuation that has plagued the budget airlines in our analysis. But then again, maybe it shouldn’t come as a shock since Frontier also had the highest value rewards program last year.

The biggest loser is Delta Air Lines, with its points falling from tied for first (1.5 cents) last year to barely beating Frontier Airlines. Delta SkyMiles are now worth 1.2 cents — the same as United Airlines
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-0.33%
and Hawaiian Airlines.

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Why American Airlines’ miles are so valuable

The American Airlines award chart may be gone, but the dynamic pricing still provides excellent value on some routes. We found several sweet spots on domestic and international itineraries where you could redeem points for more than 2 cents per point … in economy! Usually, you’d have to book business class flights (which generally have much higher cash prices that companies don’t mind paying) with points to see that high of valuation with airline miles.

It didn’t seem to matter how far out you book, either. There were many award flights where you could get a lot of value for your points no matter whether you were booking 15 days out or six months out. You could even get some deals when booking holiday flights with AAdvantage miles.

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A caveat about dynamic pricing

Loyalty programs are growing, and so is the dependence on dynamic pricing. Keep in mind that airlines like Southwest keep their valuation fairly consistent. If the cash price goes up, the points price goes up by an equal proportion.

American Airlines, on the other hand, has a higher baseline valuation than Southwest, but there are many times when you might look to use your miles for a flight and find that the options are all below baseline value. The cash price and miles price are not as closely correlated.

In other words, if you like to scour for deals and you want more options to book international flights on points, you might want to start collecting American AAdvantage miles. If you’d rather not do the comparisons every time you book and you usually fly domestic, you might want to stick with Southwest Rapid Rewards points.

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How to rethink your travel rewards strategy

Our analysis has shown that award pricing changes every year, so it’s a good reminder to use your points instead of hoard them, because they might be worth less in the future.

Inflation has largely cooled with airfares down almost 19% year over year, according to consumer price index data for July. With lower inflation, it’s unlikely we’ll see points jump in value like they did last year. Spend your points when it makes sense. Knowing the value of airline miles is particularly useful if you are thinking of getting a new travel credit card, transferring credit card points to an airline partner, or simply trying to decide whether to use cash or points to pay for your next flight. If the points price is higher than the cash price, cough up the cash and save your points for a better redemption.

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Meghan Coyle writes for NerdWallet. Email: [email protected]. Twitter: @inkwaves.