The Extra Mile

The Future Face of Mileage Programs: Smaller, Meaner

Q&A: Can I Consolidate Miles from Several Programs?

May 26, 2003 - With the largest airlines frantically rightsizing and reinventing themselves to regain profitability, frequent flyer program participants are wondering, worrying, what changes are in store for mileage programs.

While the airlines themselves are mum on the subject, the future outline of major U.S. airlines' frequent flyer schemes may be detected in the programs operated by smaller American carriers and by foreign airlines.

On the home front, we have the program models of low-priced airlines such as AirTran, JetBlue and perennial profit-maker Southwest. These carriers bundle their discount fares with pared-down rewards programs. In addition to their simplicity, the programs keep costs under control with a single policy stroke: earnings expire after 12 months.

Short-lived points means that many travelers will lose 'em before they have a chance to use 'em. And for the airlines, that means they will be issuing award tickets only to a very few truly frequent flyers.

Bottom line: these penny-pinching programs have much the same incentive power as those offered by the mainline carriers, with much less liability. That's a formula which must look awfully attractive to the Big Six airlines.

Other hints come from outside the borders of the U.S. Foreign airlines have always marched to a slightly different drummer, mileage-wise, and the worldwide travel slump has magnified those differences.

Example: beginning in July, British Airways will scale back by 75% the number of elite-qualifying miles awarded for most coach-class fares. That may well portend a widespread movement to tighten the link between what consumers pay and what they get.

And Air Canada, which is operating under Canada's version of bankruptcy protection, recently announced that members of its Aeroplan program will pay CDN $25 each time they have an award ticket issued. The policy breaks new ground, establishing a precedent that revenue-hungry U.S. airlines are surely monitoring.

As Thomas Hobbes said of 17th-century life, frequent flyer programs are shaping up to be "nasty, brutish and short."

Current News & Offers

While they may not know the name, most frequent flyers are familiar with the service provided by a company called iDine.

iDine operates the miles-for-dining portion of the largest airlines' programs -- Alaska Airlines, America West, American, Continental, Delta, Northwest, United, US Airways -- all of which award 10 miles for every $1 spent dining out.

The beauty of the iDine system is that, once a credit card is registered with the program, any charges made at participating restaurants are automatically tracked and the miles awarded. Customers need not show their frequent flyer cards or specially request the miles, and restaurant employees are unaware that diners are earning miles for their meals.

iDine has extended the concept to hotels.

Henceforth, stays at participating hotels, mostly independent upscale properties without links to the major hotel chains' programs, will earn five airline miles for every $1 spent. The underlying procedure -- miles tracked via registered credit cards -- remains the same. So anyone participating in a program's dining-for-miles option is already registered to participate in the new hotel feature.

Visit http://www.idine.com/ for more on iDine's dining and hotel programs, including a listing of hotels currently participating.

Readers: Miles on their Minds

Question from Liz

We have miles with several partner airlines and would like to put them into one program. How do we go about doing that?

Answer

There's no easy way to transfer miles from one program to another. (Ready transferability would defeat the purpose of a loyalty program, which is to keep consumers focused on a single company's products or services.)

Depending on which programs you participate in, the online mileage-exchange service Points.com may help. But you'll pay $19.95 per year for transfers. And worse, only 10% to 20% of your original miles will remain after the conversion.

It is also possible to combine the miles-to-points and points-to-miles functions of the Hilton HHonors and Diners Club Rewards programs to effect a transfer. But the process is time-consuming and, as with Points.com, the conversion loss is substantial.