Should I Consolidate Miles in a Troubled Airline’s Program?

Dear Tim,

I am concerned about the consolidation theory you espouse due to the financial instability of some of the airlines.

I am entitled to about 300,000 miles from my divorce. While at the time my ex-husband had 100,000 miles on United and about 200,000 on Delta, he spent all the United miles. He now has Delta and a fair amount of American.

I would be hesitant to follow your policy of putting all eggs in one basket, take all the miles on Delta, and have Delta go under. What’s the safest and most conservative way to request the miles?

Nancy

Dear Nancy,

There is indeed a potential disconnect between mileage consolidation and mileage protection.

In untroubled times and when dealing with airlines with good long-term survival prospects, consolidating one’s mileage earning in a single program remains the best way to reach award thresholds and to earn elite status. Or to put the matter differently, miles scattered among a multitude of programs probably won’t add up to meaningful awards in any single program.

On the other hand, investing your patronage exclusively in a company that may not be in business long enough to reward your loyalty is clearly not a winning strategy. Or, at best, it’s a highly risky one.

In this case, the miles have already been earned, so the question of elite status doesn’t arise. The challenge is divvying up the miles between two carriers—one of which, American, is in significantly better shape than the other, Delta.

With that in mind, and given that there aren’t enough American miles in your ex-husband’s account to cover the entire 300,000 miles you’re entitled to, I would suggest you proceed as follows:

• First, request the greatest number of American miles that the account can accommodate and that is divisible by 25,000. So, if the American account balance is 142,000 miles, ask for 125,000 miles. That way, you’ll be receiving exactly five restricted domestic coach round-trip award tickets, with no extraneous miles left over.
• Second, subtract the number of American miles you’re requesting from the 300,000 miles to which you’re entitled. That number will be the number of miles you’ll request from the Delta account. So, if you request 125,000 American miles, that leaves 175,000 Delta miles, enough for seven domestic round-trips.
• Finally, make it a point to redeem the Delta miles before the American miles. Delta is in more danger of insolvency than American, so using those miles sooner rather than later will reduce your risk of losing them.

Because it will probably take several years to use the awards, I would also strongly recommend keeping current with developments in the airline industry. While American is relatively healthy and Delta is financially challenged, their conditions could deteriorate or improve very quickly, requiring a timely adjustment in your redemption strategy. If, for example, Delta’s prospects improved, there would no longer be a compelling reason to spend the Delta miles first. And if American’s situation worsened, it might make sense to alternate award travel more or less equally between the two programs.

Enjoy the award trips.