For decades, airline loyalty programs promised Hawaii travelers a ticket to paradise. And for a long while, it worked. Miles bought upgrades, neighbor island flights, and even the occasional free trip to Hawaii. Today, that promise feels broken.
Perks have vanished, except for the uber-frequent flyers who spend heavily on credit cards. Redemption costs have soared, and even longtime loyalists are questioning whether loyalty has any value left at all. What once felt like a two-way street now looks more like a one-way street, with travelers paying more and getting less.
Awards that no longer add up.
Looking ahead to spring, we booked mileage award tickets for business class flights from Hawaii to Europe. On paper, that sounds like the kind of redemption loyalty programs are supposed to make worthwhile. In practice, the value has not impressed us. Between the miles required and cash surcharges, the totals were eye watering, far more than what these awards cost in past years. That was with limited availability, even for the shoulder season in March.
Currently, those tickets are on hold since they can be cancelled and miles redeposited. At the same time, we continue to shop for cash fares and are already seeing prices close to, or even better than, what we locked in with miles. If the right cash fare and schedule opens up, we may cancel the awards, save the miles for something else, and still come out ahead.
Loyalty boom for airlines coined “emotional bias.”
Nationally, loyalty programs are booming even as those flying to and from Hawaii see less and less value. Delta’s SkyMiles program alone is valued at $28 billion, more than half of the airline’s market capitalization. Last year, Delta pocketed $7.4 billion from its American Express deal alone. American and United’s programs each generated nearly as much and are valued at more than $20 billion apiece. Analysts estimate Southwest’s Rapid Rewards to be worth about $9 billion, while Alaska’s Mileage Plan is also highly profitable through credit card partnerships, though exact valuations are harder to pin down.
Airlines sell billions of miles every year to credit card companies, which then use them to lure customers with sign-up bonuses and everyday spending rewards. That steady stream of cash has turned loyalty programs into profit engines, often more valuable than the tickets airlines sell to move people from place to place.
These programs are now so central to airline finances that they served as collateral for multibillion-dollar loans during the pandemic. For Wall Street, airline loyalty is not just a perk; it is the profit engine.
And the strategy is working. Perks like early boarding, upgrades, and lounge access keep customers emotionally tethered to an airline, even if it means paying more for a ticket. Delta executives refer to it as “emotional bias.” Once you are hooked on status, you will go out of your way to stay loyal, almost no matter the cost, to a point.
But while loyalty programs are booming for airlines, Hawaii travelers see the opposite as miles buy less, seats are harder to find, and loyalty feels increasingly one-sided.
Hawaii travelers see something very different.
Award seats to and from the islands that once cost under 40,000 miles now routinely run 70,000 to 100,000 or more. A decade ago, interisland awards could be had for 7,500 points. Today, they can be as high as 15,000 each way, if you can find them at all. In some cases, as we uncovered in Travelers Now Face 250K Award Flights, the price has climbed into six figures for a single ticket.
Have you noticed award seats disappearing or costing more miles than ever before? Many of our readers have, and so have we. One family banking points for years toward a Hawaii trip saw redemption costs triple by the time they finally tried to book. Another told us, “It used to feel like my loyalty meant something. Now, the points sit there because they are worthless.”
Even free upgrades, once a signature perk of elite status, are drying up quickly. On crowded Hawaii routes, elites often find themselves high on upgrade waitlists, with virtually no chance of moving forward.
Delta has even said it now sells more than 90 percent of its premium seats. That, as an example, leaves very little left for elites hoping to upgrade.
Hawaiian and Alaska are simply the latest and most visible part of an industry story.
The topic feels especially sharp at Hawaiian Airlines, where the HawaiianMiles program is being shut down this month. Online access will end on September 25, and the phone center will close on September 30. After that, all accounts shift into Alaska’s Atmos Rewards.
How customers will receive that change remains to be seen. One thing is certain: Hawaiian’s members are now in a much larger elite pool, where competition is tougher. At the same time, they are also part of something bigger, including oneworld membership, with more possibilities.
And Hawaiian is hardly alone, as flyers tied to Delta, United, American, and Southwest are voicing many of the very same frustrations. United’s Saver awards to Honolulu are notoriously scarce. Delta’s dynamic pricing means redemptions can fluctuate significantly, often exceeding 100,000 miles for a round-trip. Americans’ awards are heavily capacity controlled. And Southwest, once attractive with flexible points tied to fares, now feels inflated as fares climb.
Why loyalty collapses faster in Hawaii.
Hawaii routes are fewer in number and always in high demand. A Los Angeles to Chicago flight might have dozens of daily frequencies across multiple airlines. But between the mainland and Hawaii, options are limited. That scarcity makes award seats harder to find and redemption costs higher.
Distance also plays a role. Hawaii flights are longer haul, meaning they cost airlines more in fuel and other ways. Carriers are less likely to release those seats at low redemption levels compared to shorter flights elsewhere.
The result is that miles do not stretch as far here as they do in other parts of the country. When award seats do become available, it is often at the last minute, a sharp contrast to the early availability that travelers once counted on.
On top of that, the post-pandemic surge in leisure demand, with Hawaii one of the most coveted destinations, made loyalty’s collapse here almost inevitable.
To make matters worse, many of the glowing articles about airline loyalty credit card programs are not truly independent. They are advertorials dressed up as news, produced by websites that market credit cards and pocket big commissions every time someone signs up. That positive spin often obscures the harder truth Hawaii flyers already know: miles do not buy what they once did.
So, whether it is Atmos, SkyMiles, MileagePlus, AAdvantage, or Rapid Rewards, Hawaii remains one of the most challenging places to extract real value from airline loyalty programs.
Airline loyalty turned upside down in Hawaii.
The New York Times recently called airline loyalty programs the billion-dollar engines driving industry profits. In Hawaii, travelers see something else. Award seats are scarce, redemption costs are sky high, and upgrades that once defined elite status now rarely occur.
For many Hawaii travelers, loyalty now comes down to just one thing: money and value. Miles are no longer something to hoard, but rather to burn through as quickly as possible before they lose more value.
If travelers ever walked away from the game, stopped using the branded credit cards, and stopped chasing miles, the airlines’ most reliable source of profit would vanish. Loyalty and credit card programs have become the financial backbone of the industry, and without them, the big U.S. carriers would look very different.
Our bottom line: Earning and redeeming points is no longer our primary goal. Finding the best Hawaii airfare is. What is your strategy?
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No loyalty with the airlines. No loyalty with island people towards tourists. No loyalty period. Aloha spirit gone too. Everybody just cares about the old mighty dollar.
Don, you missed no loyalty from Visitors to the Islands…
BOH, this is one of your best analyses ever. You make some very good points.
I used to make about one RT flight weekly for work for many years. I was a charter member of Delta’s Diamond loyalty tier and for many consecutive years after that. I found having a DL-branded credit card very handy because it offered another path to earning elite qualifying miles. Originally, Diamond status was an exceptional loyalty program, for upgrades and little extra perks like the occasional Porsche ride on the tarmac at Delta hubs. Then, DL began to monetize everything, leading the pack in the race to the bottom–they were the first to come up with dynamic award pricing. I no longer chase Diamond status because it just isn’t worth the time, energy, and expense anymore.
My strategy now is to look first for nonstop flights, convenient schedules, and the best price I can find, either in cash or miles. I am fortunate to live in a place with a lot of nonstops. The airline matters less.
I just booked a one way from Sacramento to Maui on Hawaiian via Alaska Airlines website for 10k miles. Interestingly enough if you book on Hawaiian Airlines website directly it’s 15k miles.
I’ve been also using Alaska Miles for first class for 40k miles on the same itinerary.
Another excellent article BOH. My strategy is now almost exclusively to aggressively earn and burn miles on airline tickets as well as hotels and car rentals. Airline miles depreciate rapidly, so holding them is not a good strategy. Even though I’ve got elite status with both UA and AA, I’m not so loyal to the brand that I won’t use another carrier if it has a good deal. Checking prices early and often (both cash and miles) is also critical, especially if you’re looking for premium economy, or first/business seats.
Aloha to all.
Glad this works for you but I am wondering if checking prices often may eventually work against you. Of course, I am referring to AI and pricing based on your browsing habits. I would very much like to see that made illegal but am not holding my breath.
Airline loyalty schemes have strayed from their purpose. Once a tool to reward travel, they’ve become financial products built to monetize customers. Hawaii flyers feel it most: points lose value as redemption costs climb, upgrades vanish & award seats grow scarce. Programs like SkyMiles & AAdvantage earn billion-dollar valuations on Wall Street even as utility to travelers erodes. Hawaiian’s folding of Hawaiian Miles into Alaska’s Atmos Rewards underscores the trend – competition rises, benefits thin. Even Southwest, long admired for customer focus, has added fees & curbed open seating, sparking backlash. The logic is clear: loyalty is treated as an asset class. But execution is corrosive. Travelers are disengaging, regulators circling & lawsuits brewing. Unless airlines restore tangible value, these programs—once crown jewels—will collapse under the weight of their own monetization.
Very well said.
What started out as airlines trying to recognize their most valuable customers (most frequent travelers) has been corrupted beyond recognition. A lifetime ago, while working for a European airline, our loyalty program joined you, not the other way around. Each station kept track of their most frequent fliers and awarded them limited membership.
When affinity awards started creeping into the system, the whole concept of frequent flyer became far less meaningful. Now, folks who don’t travel frequently at all, somehow think that their daily grocery purchases charged to their airline affinity credit card entitle them to free seats to Hawaii. The whole system has become irrevocably corrupt.
When Hawaiian Miles disappears, should we stop using the Hawaiian Air credit card or do dollars spent go to the new program? I am confused. Mahalo for your help. Appreciate you guys!
According to Upgraded Points, the Hawaiian credit cards from Barclay’s Bank will be going away and you will get an Alaska credit card, issued by Bank of America, instead. If that’s correct, any spend on the Alaska card will automatically go toward the new ATMOS program. Your only decision will be whether you wish to keep the Alaska credit card. Since any Hawaiian mileage balance and status you have with Hawaiian will transfer to the ATMOS program, you might want to keep it–but you will need to do your own analysis as to whether it’s beneficial to you.
Hi Steve. Be careful about any credit card affiliate websites. You should get your information from a source that doesn’t get paid from new credit card signups.
I guess my question is after September will any dollars spent using the Hawaiian credit card transfer to ATMOS. If no miles are being earned I will just cancel the card, I guess. I have not heard anything from Barclays about the credit card itself going away. Does that make sense?
Money talks and __ walks. Simple as that.
My strategy is the same as BOH’s: Just find the best airfare. I bought Economy plus tickets Denver to Kauai for an upcoming trip, and when I looked to use miles to upgrade to first, the total miles (plus additional cash) was exorbitant, and that would have put me on a Waitlist with seats to be assigned by United. I waited until there was a flash sale and bought the upgrades for cash. Year ago, I sent my sister and her husband to Kauai roundtrip from Chicago on United, for 75,000 miles, first class. Loyalty meant something back then. No more.
I find them valuable but in a different way. I am now retired but in 25 years I racked up 3 ½ million miles on AA so I am lifetime platinum and get free access to main cabin extra, flagship lounge access on international trips and free 2 bags. So I tend to always fly American but I also prefer them. I fly less now and no longer first class all the way but I hope to reach 4 million and get more benefits. Miles though are a waste of time following the change to credit card plan.
Loyalty is gone. HAs Pualani platinum upgrade certs are really hard to use. It is not worth the chance that I might end up in a cramped coach seat.
Status really doesn’t matter if you travel first/business. Most business/first class fares come with extra baggage and lounge access.
As noted in article, amassing massive amounts of miles really cost more than they are worth.
Good article gentleman.