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Pent-up demand is driving travelers to frequent flyer programs and rewards credit cards, but airlines are making it harder to cash in on popular perks.

The big picture: Now that people are packing flights again there are fewer and less appealing rewards to go around.

What's happening: Airlines, including Delta, American and United, are raising the qualification requirements to earn or maintain their “elite” frequent flyer tiers to pre-pandemic levels and beyond.

Priority boarding lines are longer and many airport lounges are having to cap capacity because of demand and popularity, making the perks less valuable to members, experts told Axios.

Meanwhile, airline fares continued to rise in December compared to the same month in 2021 with a 28.5% increase year-over-year, new Consumer Price Index data shows, making it harder to earn free flights.

Experts told Axios they expect some current benefits to be curbed or reworked with high demand since they are not the same selling points.

“Airlines might have to rethink what perks you get with status because if something is overly crowded it becomes a logistical problem,” Sara Rathner, NerdWallet travel and credit cards expert, told Axios.

When most travel shut down in the early days of the COVID-19 pandemic, many airlines reduced their program qualification requirements and extended members’ status. 

The elite travel extensions, which were put in place when people weren’t traveling or able to take advantage of the benefits, are ending with Delta’s SkyMiles Medallion Members “able to enjoy their Status through Jan. 31, 2023.”

Delta is increasing the Medallion Qualification Dollars (MQD) requirements for the first time since 2015 to achieve 2024 Medallion Status for Diamond, Platinum and Gold members.

Thresholds are increasing $2,000 for gold members to $8,000; a $3,000-increase to $12,000 for platinum and a $5,000-increase to $20,000 for diamond medallion.

During the pandemic, consumers were able to earn and redeem travel rewards for non-travel purchases like restaurant takeout or groceries, Rathner said. “But as travel has returned, travel cards have also returned to the way they work in many ways,” she said.

Gaining status with an airline also likely won’t make much of a dent with the kinds of massive travel headaches plaguing airlines recently. Southwest Airlines’ mass cancellations and an outdated FAA system grounding thousands of flights Jan. 11 stranded and delayed tens of thousands of travelers.

Between the lines: The Department of Transportation statistics shows nearly 1 in 4 U.S. flights was canceled or delayed between January and September 2022, Axios' Joann Muller reports.

DOT had already been turning up the heat on airlines in the wake of travel disruptions last summer as they struggled to meet pent-up travel demand.

Here are tips to make the most of your next flight: 

Cashback cards versus travel loyalty programs

There are decisions to weigh when signing up for travel credit cards and cashback cards with annual fees, Rathner said.

“You want to get more value from the card than the annual fee,” she said.

If you’re not going to stay loyal to one airline, it also likely isn’t worth the cost and a cashback card could be the better choice.

What they’re saying: “Travel rewards are great and they tend to be more lucrative than cash back,” Bankrate.com analyst Ted Rossman told Axios.

“But we also know from our research that cash back is the most popular reward and I think that's accelerated during the pandemic,” Rossman said. “We see more people than ever gravitating to cashback cards just to keep it more simple and universal.”

Earning free flights is one of the big reasons someone chooses a frequent flyer program with a branded credit card. Free flights also can be earned with a travel cashback credit cards from brands including Chase, American Express and Capital One.

What’s happening: Airlines have been making it harder in some cases to use miles and requiring more miles to get the free flight, Rossman said.

With the travel surge, Eric Jones, co-founder of The Vacationer, also said there’s been less award seat availability over the past two years.

What they're saying: “Many people are flying for the first time in a few years, and planes are packed," Jones told Axios. "Many airlines are also offering fairly cheap first class and business class cash upgrades, so there are not as many award seats."

“Unfortunately, that is making it harder to truly maximize credit card points,” he said.

Many annual fee cards offer free checked bags, trip insurance and perks including free TSA PreCheck and Global Entry fees.

A few flights with free checked bags can make the fee worth it, Rathner said.

Also look for signup offers, which change often, for bonus points.

Between the lines: Your non-travel credit card spending with select cards can “supersize your point earning” as well, Rathner added.

Many travel cards come with travel insurance, Rossman said, which can help if flights are canceled, delayed or if your luggage is lost.

Signing up for airlines’ free programs is worth doing, Rathner said, but be prepared for it to take time to see your points add up.

“It can take years to build up enough points to get one free flight,” she said.

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The Federal Aviation Administration (FAA) said Thursday that last week's computer system outage that temporarily grounded all U.S. airline departures was caused by the accidental removal of files.

Driving the news: A preliminary review determined that "contract personnel unintentionally deleted files while working to correct synchronization between the live primary database and a backup database," the agency said in a statement.

The big picture: The outage of the system that sends pilots safety alerts and other critical information caused thousands of delays and cancellations and cost airlines billions of dollars. 

Details: The FAA, which is still investigating the outage, has so far found no evidence of a cyber-attack or malicious intent, per the agency.

They've made the necessary repairs to the system and taken steps to make the Notice to Air Missions System system more resilient, according to the statement. 

What they're saying: "The agency is acting quickly to adopt any other lessons learned in our efforts to ensure the continuing robustness of the nation’s air traffic control system," the FAA said.

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The outage caused thousands of delays and cancellations, costing airlines billions of dollars.

Delta Airlines planes taxi at LaGuardia airport in New York on Jan. 11. Photo: Ed Jones/AFP via Getty Images

Federal Aviation Administration (FAA)

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JetBlue aircrafts at John F. Kennedy International Airport in New York in November 2021. Photo: Angus Mordant/Bloomberg via Getty Images

Flights cancellations and delays have become rather common this winter, but suffering from flight troubles doesn't need to mean you'll get left out in the cold.

The big picture: Multiple airlines have a number of policies for refunds, reimbursements and rescheduling that can help people who find themselves waiting hours, if not days, for their flights.

There have already been a number of flight cancellations and delays for American travelers.

On Wednesday, Jan. 11, thousands of flights were delayed and canceled after the FAA's Notice to Air Missions System — which sends notifications to pilots — crashed overnight and caused a major outage.

During the 2022 holiday season, Southwest Airlines customers experienced massive delays and cancellations due to extreme weather and technical glitches.

Major winter storms forced multiple other airlines to enact refund and waiver policies for travelers.

What to do if your flight gets canceled or delayed 

There are plenty of steps to take when your flight gets bumped a few hours or overnight.

Check your flight status: Scott Keyes, the founder of Going, formerly known as Scott’s Cheap Flights, told CNN that keeping up to date on your flight status through text alerts can help you avoid getting stuck at an airport.

Check your airline's policies: Nothing is more helpful than checking with your airline about the next steps. You can check online or scan the airline's app to find out what to do at the airport.

Airlines are constantly updating their accommodations based on major weather events and sharing updates on their platforms.

Contact your airline: Nick Ewen, director of content at The Points Guy, told U.S. News that travelers should contact airlines to seek help with cancellations and delays. 

Speak with customer representatives: The Department of Transportation (DOT) said travelers should speak with customer representatives who can help "arrange meals and hotel rooms for stranded passengers," as well as help with baggage claim issues, settle complaints and write checks if you're bumped off of your flight.

What to know: Per the DOT, consumers are entitled to refunds if an airline cancels a flight, regardless of the reason for it, as long as the consumer decides not to travel.

Consumers are entitled to refunds for "significant delays," too, according to the DOT. However, DOT has not clearly defined what a "significant delay" means. Refunds are made on a case-by-case basis.

Travelers can also purchase fully refundable tickets can obtain a refund if they do not use the ticket to travel.

How it works: Travelers should contact their airline or a ticketing agent if they feel they are entitled to a refund, the DOT said.

Details: The DOT's Airline Customer Service Dashboard explains what travelers are entitled to based on their delay or cancelations, and that includes hotel and transportation needs.

In some cases, such as a disruption leading to wait times of three or more hours, travelers may be entitled to a meal voucher or meal cash, according to the DOT. 

If you're bumped to a flight on a separate date, many airlines will offer hotel accommodations.

Airlines have committed to offering these vouchers and reimbursements. Speak with a ticketing agent or representative if you feel you're entitled to such benefits.

Zoom in: The DOT has a website for travelers to file complaints if problems can't be resolved at airports. 

The department said it will acknowledge complaints within 30 days of receiving them and a response will come within 60 days.

You can book travel insurance ahead of time to avoid issues. Some credit cards offer free travel insurance as a benefit. 

Yes, but: Bankrate.com analyst Ted Rossman told Axios there are a lot of nuances with travel insurance.

“Like for example, credit cards that offer travel insurance can be very valuable," Rossman said. "It tends to be more if there's bad weather or if you get sick or something. Interestingly, the Southwest operational meltdown, I don't think would have qualified on most cards. It depends.”

Sara Rathner, a travel and credit cards expert at NerdWallet, told Axios that "insurance can’t prevent things from happening that interrupt your travel, but it can certainly help make you a little more whole if things don’t go as planned.”

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Flights cancellations and delays have become rather common this winter season.

People check-in for their flight at JFK airport on January 11, 2023 in New York City.

People check-in for their flight at JFK airport on Jan. 11,  in New York City. Photo: Michael M. Santiago/Getty Images

Air travel

Delta Air Lines and T-Mobile will begin offering free WiFi on all flights beginning in February, the two companies announced Thursday.

Why it matters: Delta joins JetBlue as the only major U.S. airline to offer free wireless internet connectivity to all passengers.

Details: Delta will begin rolling out the Wifi on domestic flights on Feb. 1. More than 700 planes in its fleet will offer the perk by the end of 2023, the company said in a statement.

International and regional routes will add Wifi by the end of 2024, per the statement.

Travelers can access the WiFi by logging into their Delta SkyMiles frequent flyer account "while on the ground or on the plane," the companies said. 

What they're saying: “The ability to stay connected while seeing the world is simply foundational," Delta CEO Ed Bastian said in the statement. 

Bastian called Delta’s partnership with T-Mobile an "exciting step forward" in offering an "onboard experience that’s as comfortable and personalized as sitting in your own living room."

Flashback: The Wall Street Journal reported in December that Delta was planning to roll out free wireless internet as early as 2023. Delta told WSJ it was exploring “various offerings to select customers on select routes.”

Travelers can access the WiFi by logging into their Delta SkyMiles frequent flyer account "while on the ground or on the plane," the companies said. Those without a SkyMiles account can sign up for free.

The service will be available on "smartphones, tablets and laptops," T-Mobile said.

United Airlines, for example, charges $8 for members who have frequent flyer programs and $10 for normal flyers.  Southwest Airlines also charges $8.

JetBlue is the only other airline with free WiFi. 

But Hawaiian Airlines is planning to offer free Wifi through SpaceX’s Starlink in 2023 and American Airlines has also been testing offering free WiFi after watching ads, WSJ reports.

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Delta Air Lines to offer free WiFi on domestic flights starting in February

More than 700 planes in its fleet will offer the perk by the end of 2023.

A Delta airlines Airbus 320 approaches Ronald Reagan Washington National Airport

A Delta airlines flight approaches Ronald Reagan Washington National Airport. Photo: Daniel Slim/AFP via Getty Images

Delta Air Lines

Southwest Airlines apologized Tuesday for canceling over 15,000 flights during the holiday season and offered a $300 voucher in the first step of a long journey toward winning back customers' trust.

Why it matters: The Dallas-based airline's mass cancellations stranded tens of thousands of passengers, putting a large dent in its reputation for customer service. The company has since vowed to review every aspect of its operations, including its outdated scheduling technology, to prevent similar events in the future.

What they're saying: "On behalf of Southwest, I want to let you know we’re so sorry," CEO Bob Jordan said in an email to impacted customers. "Our Purpose has always been to connect our Customers to what’s important in their lives. And this holiday season, as you made plans with us to do just that, we fell short."

"Southwest experienced a unique combination of events that started with severe weather at our busiest airports and transitioned into other operational challenges that stretched our People, processes, tools, and technology," Jordan said. 

"This caused unprecedented wide-scale cancellations and ultimately impacted your trip."

Jordan added that the company is handling refunds, reimbursements and lost bags "with great urgency," and offered each impacted customer 25,000 reward points — valued around $300 — toward Southwest's frequent flyer program "as a gesture of goodwill."

The big picture: Southwest's cancellations forced thousands of travelers to rebook travel plans at the last minute amid a major winter storm.

Worth noting: The Department of Transportation has said it will examine "whether cancellations were controllable and if Southwest is complying with its customer service plan."

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A Southwest Airlines passenger jet lands at Chicago Midway International Airport in Chicago, Illinois on Dec. 28, 2022. Photo: Kamil Krzaczynski/AFP via Getty Images

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The Internal Revenue Service increased the "optional standard mileage rate" used to calculate tax deductions by 3 cents a mile for 2023.

The big picture: The increase brings the IRS rate to 65.5 cents per mile driven for business use, which comes after two increases in 2022, the federal agency announced in a statement.

Flashback: The IRS normally updates mileage rates once a year but in June announced a rare mid-year adjustment that went into effect July 1 because of high gas prices.

It was the first mid-year adjustment to the rate since 2011, the agency said in June.

The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile, the IRS said. 

Context: Taxpayers use the rate to calculate the "deductible costs of operating an automobile for business and certain other purposes" instead of tracking actual costs.

It's also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage. 

Meanwhile, the national average gas price per gallon for regular unleaded was $3.179 Friday down from the record high of $5.016 on June 14, according to the latest data from AAA.

Reality check: The IRS has lowered the mileage rate after past increases, according to a chart on its website.

The rate was last lowered in 2021 by 1.5 cents before it increased twice in 2022.

Details: The IRS reimbursement rate was increased to 65.5 cents per mile.

For active-duty military members, the rate is 22 cents for deductible medical or moving expenses, the same as the July 2022 increase.

The 14 cents per mile rate for charitable organizations remains unchanged because it is set by statute, the IRS said.

Between the lines: The IRS said the rates “apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles.”

Of note: The IRS said that "under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses."

Taxpayers also have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates, the IRS said.

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The Internal Revenue Service is increasing the mileage rate starting Jan. 1, 2023. Photo: Al Drago/Bloomberg via Getty Images

Internal Revenue Service (IRS)

Southwest Airlines flights appeared to be back on schedule Friday morning ahead of another busy holiday travel weekend after days of cancellations, delays and baggage claim chaos.

The latest: As of 8:30 am ET Friday morning, Southwest had 41 cancellations, which is about 1% of its flight schedule, per Flight Aware data. The airline also had 101 delays.

Southwest had topped FlightAware's charts with thousands of canceled flights earlier this week, when the airline flew about one-third of its schedule.

It ranked eighth on the list Friday morning.

The big picture: Southwest passengers have been stuck in a travel nightmare since winter storms prompted widespread delays and cancellations leading up to Christmas. 

Operational challenges undermined the airline's ability to resume service, Axios reported. 

Yes, but: Southwest said on Thursday it was "eager to return to a state of normalcy" on Friday, hoping for "minimal disruptions" over the New Year's Eve weekend.

Southwest said that employees were working "around-the-clock" to help customers get back on schedule.

What we're watching: Southwest Airlines CEO Bob Jordan apologized publicly earlier this week for the failures. He said the airline will help customers who suffered as a result.

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The airline ranked eighth on a list of flight cancellations as of Friday morning.

ravelers make their way through Orlando International Airport during the busy Christmas holiday season on December 28, 2022 in Orlando, Florida..

Travelers make their way through Orlando International Airport on Dec. 28. Photo: Paul Hennessy/Anadolu Agency via Getty Images

Southwest Airlines is planning for its schedule to "return to normal" on Friday, the company said in a statement.

The big picture: Southwest passengers have been suffering from a travel nightmare with thousands of cancellations and bundles of lost bags.

Driving the news: The airline said Thursday it is "eager to return to a state of normalcy" on Dec. 30 with "minimal disruptions" ahead of another busy holiday travel weekend.

"We are encouraged by the progress we've made to realign crew, their schedules, and our fleet," the airline said.

Employees are working "around-the-clock" to help customers and crew members, the company said.

"Our crews are showing up in every way throughout this challenge," the airline said. "We're grateful for the heroic efforts of all our people to serve our customers."

By the numbers: Southwest had at least 2,363 flights canceled as of Thursday evening, about 57% of its operations, according to FlightAware data. Another 221 flights were delayed.

There were more than 2,300 Southwest cancellations on Wednesday and thousands more earlier this week.

Southwest has canceled more than 15,000 flights in the past week, according to a Wall Street Journal tally.

What's next: Southwest Airlines CEO Bob Jordan apologized publicly for the travel nightmare, saying the carrier will look to help customers who suffered from delays, cancellations and lost baggage.

 Editor's note: This article has been updated with additional details on canceled flights.

Passengers have been suffering from a travel nightmare with thousands of cancellations.

Arriving travelers wait for ground transportation during the busy Christmas holiday season at Orlando International Airport on December 28, 2022 in Orlando, Florida.

Arriving travelers wait for ground transportation at Orlando International Airport. Photo: Paul Hennessy/Anadolu Agency via Getty Images

Lost luggage is piling up at airports nationwide as the recent Southwest cancellations and delays continue to wreak havoc on holiday travel schedules.

The big picture: Southwest's flight cancellation problems — sparked by extreme winter weather but exacerbated by the airline's business model and antiquated systems — have left some passengers stranded without their bags and unsure how to find them.

The latest: Southwest had 2,362 flights canceled by 10 a.m. ET Thursday, about 58% of its operations, according to FlightAware data. Another 61 flights were delayed.

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