Time Flies Faster with Airlines' New Rules

Jan. 28 -- Last year, Gary Leff and his wife spent their honeymoon touring Asia, and the 10 flights between them didn't cost a dime.

Leff has become something of a master frequent flier, having socked away hundreds of thousands of miles over the years in dozens of airline programs. So when he heard he could lose miles on US Airways, United Airlines and Delta Air Lines as those carriers work to weed out dormant frequent flier accounts, Leff thought it was unfair.

"They [fliers] spent time accumulating points, and when they finally get there, it's like Charlie Brown and that football -- it keeps getting pulled away," said Leff, a chief financial officer for a Washington-area university research center.

He's not the only one griping.

Frequent fliers and those who monitor air travel say these popular programs are in the midst of big changes as major airlines work to ensure that their best customers get more of the free tickets.

In past years, financially strapped airlines have reined in frequent flier programs by limiting available award seats and increasing the miles needed to get a free ticket. The latest adjustments -- primarily cutting the time that consumers have to collect miles without using their accounts -- could affect everyone from leisure travelers caught off guard by the new rules to those enrolled in multiple programs who have to watch them more carefully.

It's another hassle at a time when more passengers are vying for free seats, consultants say. To make more money on the programs, airlines have spent years drawing in participants by teaming up with retailers, credit cards and online sites to offer extra credits or miles. But the influx of new program members -- now at an estimated 100 million -- means that casual travelers who don't update their accounts frequently could stand to lose thousands of miles if they don't act soon.

"There's some concern out there," said Tim Winship, publisher of frequentflier.com, a consumer Web site, who expects many travelers to give up on their plans as the changes continue. "Why bother playing the mileage earning game when it's so frustrating when it comes time to redeem?"

Airlines used to give passengers three years before cutting miles from dormant accounts. But that began changing at the end of 2006.

US Airways was the first to switch to 18 months, and miles in those accounts will begin expiring Wednesday if a customer has let his frequent flier number become dormant for that long. United, which recently followed suit, will drop accounts that haven't been used for 18 months beginning at the end of this year. Miles in Delta's program began expiring last month in accounts dormant for two years. Continental Airlines reserves the right to close accounts inactive for 18 months but it doesn't do so as a practice.

Airlines insist their most frequent fliers will benefit because they will compete with fewer people for award seats.

"This change makes our Mileage Plus program better for customers who are most loyal to United, reduces our operating costs and brings our program in line with major competitors," said Dennis Cary, United's senior vice president of marketing, when the changes were announced this month.

Many consumers rush to update their accounts when miles are about to expire. And the practice has become much easier than in years past.

Before frequent flier programs were opened to other merchants, some travelers prevented their miles from expiring by taking a cheap and easy flight from Washington to New York or across the San Francisco Bay. Today, miles can be earned by booking a hotel room, using an airline credit card or even buying a magazine subscription or using a particular cell phone.

Frequent fliers who participate in multiple programs often pay close attention to changes. But many might let their programs lapse through inattention or frustration, and that could help those left in the programs get the shrinking number of free seats.

A November report from the Transportation Department's inspector general said major airlines cut the number of seats they offer to everyone by about 11 percent from 2002 to 2005. Furthermore, discounted fares have led to more of the seats being sold rather than awarded for miles.

Awards from four of the six airlines with the largest programs are down, when counted as a percentage of miles flown by paying customers, the report said. United was among those whose awards dropped the most during the four-year span to 6.6 percent from 7.8 percent. The percentage stayed the same at Delta and rose at US Airways, although both airlines made some of the biggest cuts to available seating in general; 11 percent and 21 percent, respectively.

About 26 percent of complaints to the Department of Transportation in 2005 about frequent flier programs were "not able to redeem miles," up from 17 percent in 2001.

Most carriers do not disclose how many members they have or how many free seats are on each plane. The report calls for more transparency and standardization of the widely varying programs so consumers can make better decisions about joining them. But the Air Transport Association, an airline trade group, opposes that because it considers the programs competitive tools.

Travel monitors said American Airlines was one of the first carriers to team with other businesses to offer credits on frequent flier accounts, expanding the accounts to millions. It was a way for airlines to offset the cost of giving away free travel and to generate income by selling miles to credit cards, hotels and others looking for marketing opportunities. In more recent years, the Internet has made it easy to track purchases by a frequent flier number, further fueling the programs.

But financial troubles meant that few airlines could afford the new demand for free seats, observers said. Airlines, especially those in bankruptcy or merger talks, are likely pondering other changes.

Morgan Durrant, a US Airways spokesman, said no other changes to the airline's program are planned. But he said past changes mean there are many more ways to earn and keep miles. He said customers may pay a fee to keep their soon-to-expire miles, but other means might be less expensive. As for using the miles, he said, there also is more than one option.

"Advice we give to travelers is to be flexible with time or travel and also airports," Durrant said. "Many large markets have viable alternative airports. For example, San Jose or Oakland for customers traveling to San Francisco."

Durrant said airline customers also can use miles to upgrade to first class rather than booking a separate flight, but carriers like US Airways give preference to their best customers.

US Airways once was the No. 1 carrier at Baltimore-Washington International Thurgood Marshall Airport, and many passengers in the region participated in its frequent flier program. Faced with competition from discount carriers and financial difficulties, the airline ceded its local dominance in 1999 to Southwest Airlines. These days, US Airways isn't among BWI's top five carriers, and customers have fewer flight choices there to use their miles.

Many passengers say working through the frequent flier system on most carriers can be a challenge.

Aaron Kahn, a Pennsylvania State University law student studying in Washington this semester, said he sticks to major carriers such as United and American, specifically because his miles don't expire as long as he flies every few years. He diligently accumulates miles and tracks them on his preferred carriers so he can plan -- the minute the flights are available. Most airline schedules are available 330 days in advance.

"On American [Airlines], you have great luck with miles if you are flexible, as this fall I booked a trip ... for next summer, which includes visits to five countries in business class," he said. "But even when calling 331 days out at midnight Eastern Time, I often could not get my preferred routing."

Kahn said he avoids discount airlines because he doesn't fly often enough to earn a free ticket. Unlike major full-service carriers, credits on discounters typically expire after a year and can't be extended. Southwest Airlines recently changed that to two years, and others followed, but it also limited the number of seats available to award seekers.

"If we did not restrict the seats, there could be the possibility of a completely full aircraft all on reward miles," said Whitney Eichinger, a Southwest spokeswoman. "We wanted to make a change that reeled that in a bit, but still allowed customers to find seats on the flights they preferred."

Winship, the program observer, cheered the extension to two years, but not the restrictions: "Is it a net gain for customers? I don't claim to know. ... What will the airlines do next?"

Copyright (c) 2007, The Baltimore Sun.



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