American Airlines blamed high fuel prices and rising airfares for the change.

"The disparity between discount and premium tickets is too great to be offset by miles alone," an AA spokesperson said.

From the Dallas Morning News:

Timothy Sieber, an aviation consultant for the Boyd Group in Evergreen Colo., said the high fuel costs are to blame for the new fees, which may be reaching a tipping point.

"At some point, it becomes like a Saturday Night Live skit, where you're paying for a seat belt and to use the bathroom," Mr. Sieber said. "They're running out of things to charge us for."

American Airlines making more changes to AAdvantage program [Dallas Morning News](Thanks, Travis !)
(Photo: benh )

Delta's dispatch:

Escalating fuel prices continue to impact our world economy, everyday life and the airline industry. Due to continued, unprecedented fuel costs, we will add the following fuel surcharge to Award Tickets originating from the U.S. and Canada, effective August 15, 2008:

• $25 for Award Travel between the 50 states and Canada
• $50 for Award Travel between the 50 states/Canada and all international destinations

This was a difficult but essential decision to ensure we are doing everything possible to offset the cost of fuel which has nearly doubled in the last year. This fuel surcharge will not impact any existing ticketed Award itineraries or any future Award Tickets issued prior to August 15, 2008, regardless of the date of travel. We hope this is temporary, and should fuel prices subside from current levels, we will reevaluate this surcharge.

We are committed to making SkyMiles® the best frequent flyer program in the industry and providing you with the most benefits and rewards. We will continue to expand the destinations and opportunities for Award Travel and strengthen the program as we prepare for our proposed merger with Northwest Airlines®. Additionally, we will keep you updated on the launch of our new multi-tiered Award program and other key initiatives over the next 60 days.

Thank you for your continued loyalty and support of Delta and the SkyMiles Program—now and always.

JEFF



J. W. Robertson



Managing Director, SkyMiles

The announcement coincides nicely with the release of the 20th fare hike this year.

We are intrigued by the "new multi-tiered Award program" J.W. mentioned. Details are scarce, but we imagine it will work out something like this: there will be two impermeable tiers. In one tier, there will be awards. In the other tier, frequent fliers.

(AP Photo/Al Behrman)

(Thank to everyone who forwarded the announcement!)

Fewest Available Seats (avoid these airlines):
US Airways offered its lowest priced seats on 2 of 24 iteraries, Delta on zero.

Least Valuable Points:
Delta and US Airways were not only hard to book rewards seats with, they also required more miles than other airlines.

The WSJ suggests, no matter which airline you use: "Always check for discounted business-class and first-class tickets, which sometimes can be better values and even lower-priced than unrestricted coach tickets." You may also want to book a coach fare, then use your miles for an upgrade.—MEGHANN MARCO

What Frequent-Flier Miles Really Get You [wsj]

More is in the mail: United is considering a program where nonelite passengers will have to pay a fee to check luggage or get an advanced seat assignment. Elite fliers would get these features for free.

"We're trying to identify things that people are willing to pay for," a United spokesperson said. But joining a frequent flier program isn't enough.

"You don't just have to be a frequent flier to get a better seat assignment," said Richard Wong, a lawyer in Washington who is a United and American frequent flier. "You have to be a high-level elite. Otherwise, you could be stuck in the back of the plane." — MEGHANN MARCO

I'm Elite and You're Not [New York Times]

We know it can be confusing. There's so many credit card programs, with an endless array of variations and values associated with them. Moreover, the disconnect between "miles earned" on a reward points credit card and the miles traveled, as the crow flies, is huge. As with all terminology employed by the financial industry, the primary goal seems to be to obfuscate the average Joe trying to find a decent deal.

So we dove into it, with the aim of giving any credit card holder with a reward points plan a decent primer on how and when to use them to get free tickets. We also give some advice to people looking into credit cards with reward points and wondering if they are a good way to fly for free. If either of those people is you, hit the jump and read more.

If you're an existing credit card holder, looking to trade your points for flights, the first thing you need to know is what kind of card you have. There's really three types of credit cards, all ostensibly offering rewards, but differing fairly drastically in approach.

First, there are single airline cards... these are credit cards with partnerships with single airlines. An example might be the United Airlines Mileage Plus Visa, where every $1 charged is equal to 1 mile.

Second, there are cards that allow you to transfer reward points to other airlines. Purchases accrue points, and these points can then be transferred to any airline in a confederacy of partners. In addition, these cards allow you to use your points for other perks, such as hotels, gift certificates, hookers, etc.

Finally, there's cards that allow you to buy tickets with your points. These cards are unaffiliated with frequent flier programs. Each point is assigned an arbitrary value (that may inflate or deflate over time) and you can then use these points to buy tickets. Capital One's "No Hassle Rewards", for example.

The last type of card is probably the worst deal, as they are unaffiliated with frequent flier programs. Consider Capital One's "No Hassle Rewards" program, for example. Each dollar spent on that card is worth two "miles". But these aren't miles in the sense of miles that you can actually travel. Check out Capital One's policy on trading in your miles for a plane ticket:

The number of miles required by the Cardholder for travel redemption will depend on the cost of the itinerary chosen by the Cardholder at the time of redemption. The mileage requirement is as follows: 15,000 miles are required for tickets up to $150; 35,000 miles are required for tickets from $150.01 up to $350; 60,000 miles are required for tickets from $350.01 up to $600. For tickets over $600 in value, the required number of miles will be determined by multiplying the cost of the ticket times 100 (ex. $768 ticket requires 76,800 miles).

To put this in perspective, you would have to spend $30,000 dollars on your card to buy a ticket from San Francisco to Boston, round-trip, in coach. That is an outrageous gouge.

But this raises a larger point: no matter which type of card you have, exchanging your rewards for tickets is really only really a "good deal" if you are either making a huge volume of purchases on a corporate expense card, or if you habitually make gigantic purchases on your own credit card, like Porsches. Consider the following chart, courtesy of the Wall Street Journal.

Although slightly out of date, the point is clear: you need to make assloads of purchases to get even a cheap ticket on a reward points credit card. A cheap seat on a flight from Detroit to Chicago next to an old woman examining the boils on her leg will cost you, at a minimum, $13,514. And if you want a luxurious trip to Rome in Business Class, surrounded by succulent-lipped stewardess wenches serving you ponderous goblets of brandy, you will still need to buy a minimum of $180,000 worth of purchases on your plastic.

Still, some lessons on how to get a good value if you already have the points on your card can be distilled from this chart. The big lesson is that you are an absolute sucker to trade in your reward points on a coach domestic flight from, say, Chicago to Detroit. The best value to be had from exchanging reward points for tickets is on business or first class trips to exotic, international destinations, or on domestic flights in any class that need to be booked at the last minute. Ultimately, it's really about the value of the flight and how much it would cost you at retail.

At this point, it's pretty clear that although reward points are technically free money, the expenditure necessary to notch up any really compelling tickets is just prohibitive for anyone who isn't either spending for a company or couldn't afford these tickets on their own anyway. Reward points are not "average Joe" good deals.

But if you're a wealthy corporate fat cat who is still obsessed with getting the best deal, how can you know when you're just being ripped off on that reawards ticket, or if it's actually a good deal expenditure of your imaginary money? Upgrade Travel's Better Living Through Miles has this handy rule-of-thumb for securing the best value.

The value of miles depends on how you spend them on. Miles are like a currency (except they don't earn interest), and like money, you want to try to get the most bang for your buck. I always recommend getting a value of at least 1.7 cents per mile. That's my breakeven number. I use that cutoff because I could get that much in cash back, on average, with some credit cards. I want my miles to be BETTER than cash back. Cash is great, but miles can be worth a lot or a little. So I aim high. I start by comparing the cash fare with the miles necessary to book a ticket. Divide the cash fare by the miles, and if it's less than 1.7 cents per mile, spend cash. If it's more than 1.7 cents per mile, use the miles. And the higher the better. My lifetime average is 4.4 cents per mile.

If that's not good enough for you, Better Living Through Pseudonymous Miles has done one better: he's put together an entire choose-your-own-adventure style guide to knowing how and when you are getting the best value for your buck from your reward points or frequent flier miles. Just go here and start answering questions about your travel goals and the type of credit card rewards program you're affiliated with. It's an excellent resource, not only to inform yourself about how reward points and frequent flier systems work, but to take the decision of whether or not you are getting a good deal out of your hands and placing it firmly on the objectiveshoulders of an expert.

Ultimately, whether or not reward points are a "good deal" is subjective and has a lot to do with your existing credit card expenditure. Reward point programs pander to executives on corporate expense accounts, or rich people who can generally afford business class tickets anyway. If you are looking for a corporate charge card and would like the added perk of some sweet, luxurious international trips, you would likely do well to pick a reward point program. But if you are an average Joe, placing the occasional purchase for groceries or a new iPod, and your primary aim is to travel on domestic flights as a coach passenger, it doesn't make a lick of sense. You'd be better off with a cash-back card... and, even then, you won't be getting much mileage out of it.

As in all things, rich people get all the real perks.