Frequent-flier programs disgruntle some

By Gary Stoller, USA TODAY
Rich Spear belongs to 13 airline frequent-flier programs, but he’s not as big a fan of them as he once was.
It’s difficult to redeem miles and understand the “ins and outs” of each program, says the frequent business traveler and technology integration consultant from Cranberry Township, Pa.
“The golden age of frequent-flier programs — when miles were earned by flying and airlines competed for the top customers with promotional offerings and realistic award availability — was the late 1990s and early 2000s,” Spear says. “Now, it’s just a moneymaker with airlines selling miles to credit card companies, florists and everyone else under the sun, and then limiting when you can use them.”
Next month marks the 30th anniversary of American Airlines’ introduction of the first frequent-flier program. And despite complaints from Spear and other fliers, the popularity of the programs hasn’t waned. They’ve grown from their original mission of building brand loyalty among fliers to billion-dollar revenue generators that lure non-fliers and are vital to an airline’s profitability.
Rating airlines’ frequent-flier programs
United and Alaska airlines have the best frequent-flier programs, according to InsideFlyer, a frequent-flier magazine that rated the programs at USA TODAY’s request.

Airline Overall rating:

AirTran B
Alaska A-
American B+
Delta B+
Frontier B-
Hawaiian B-
JetBlue C
Southwest B+
Spirit C
United A-
US Airways C+

Source: InsideFlyer
A USA TODAY analysis — which includes statements by airlines and a review of documents they filed with the Securities and Exchange Commission— shows that the number of members who have signed up for U.S. airlines’ frequent-flier programs exceeds 311 million, the population of the USA.
CHART: Which airlines have the best frequent-flier programs?
Many of the airlines’ most important customers, frequent business travelers, are grumbling, though. They’re bothered by non-frequent fliers reducing the availability of seats on planes by earning miles with credit cards and in other ways that don’t involve taking a flight. And they’re annoyed by an inability to book a free flight at the lowest mileage-redemption levels.
“There are rarely any flights at the lowest mileage level anymore,” says frequent-flier Jebb Stewart of Salem, Utah.
Four years ago, Stewart says, he cashed in 35,000 miles per person for a family trip to Hawaii. In March, Stewart says, he checked Delta Air Lines’ website for a free round-trip flight from Salt Lake City to Honolulu on any date through the end of December. There were four days on which seats were available at the lowest mileage level.
“The lowest mileage level I could find was over 50,000 miles,” says Stewart, a military trainer who is a frequent-flier member with American, Delta and United. “The rest were 65,000 and up.”
Frequent-flier Ken Stead of Lisle, Ill., says he must plan “way, way ahead” to redeem miles for a desired free flight.
He says frequent-flier programs are worse today because “a lot more miles” are needed for an award and free-seat availability is scarce. The motto of frequent-flier programs today “seems to be ‘How can we give less benefits without being overt about it?'” says Stead, who works for an interconnect products manufacturer.
FREQUENT FLIER 101: What you need to know about loyalty programs
MORE: How to choose the ‘best’ frequent-flier program
Travel industry experts who monitor the programs say a large number of frequent travelers are like Stead. “The frustration level is at an all-time high,” says Tim Winship, publisher of
Trying to book
It took USA TODAY 13 attempts recently before it could book a free seat at the minimum mileage level on a Delta flight.
Despite changing arrival and departure dates and the arrival city, USA TODAY repeatedly struck out trying to book a free flight at the lowest mileage threshold from New York to six European cities in August, a peak travel month.
USA TODAY also was unable to get a free seat for the minimum number of miles for flights during two off-peak months: New York to Los Angeles in September and New York to Omaha in October.
Delta’s website sometimes showed dates when free seats at the lowest mileage levels were supposedly available, but only free flights requiring higher mileage appeared when clicking on the dates.
A telephone agent for Delta’s SkyMiles program said the website wasn’t as up to date as the changing seat inventory in the airline’s reservations system.
Delta spokeswoman Chris Singley says the airline on March 13 upgraded the award calendar on its website “to improve its accuracy.” USA TODAY, though, tried to book its free flights four days later and found them inaccurate.
Singley says that in late March more than 20% of seats remaining for April and May flights were available at the lowest mileage level.
Demand is “very high” for free seats on summer flights, particularly with average airfares continuing to rise, she says. “Just as the lowest fares will sell out quickly, so do award seats at the lowest redemption levels.”
ELITE STATUS: The ultimate frequent flier perk
FREQUENT FLIER DEALS: Search for promotions, bonus mile offers
Frequent-flier guru Randy Petersen, publisher of InsideFlyer magazine, says Delta gets “beat up the most” by frequent fliers who complain they can’t cash in miles. But last year Delta SkyMiles members redeemed more than 12 million mileage awards, and 8.3% of Delta’s passengers — “a pretty significant number,” Petersen says — flew with mileage awards.
Petersen says plenty of free seats are available at all airlines if fliers learn to accept that they must pay more than the minimum number of miles to land one. “I can get any award if I pay double miles for it,” he says.
In Delta’s SkyMiles program, 25,000, 40,000 or 60,000 miles can be cashed in for a domestic round-trip coach ticket. For a first-class ticket to Southeast Asia, 60,000, 120,000 or 185,000 miles can be redeemed. Delta’s website warns that “travel to all destinations within a region may not be available at minimum mileage rate.”
Earning miles
Petersen says fliers shouldn’t be discouraged by the lack of free tickets at the lowest mileage level, because miles have become so easy to earn.
Many frequent-flier club members earn the bulk of their miles without flying. Credit cards issue a mile for every dollar spent, and miles can be earned by buying products, shopping at grocery stores, taking out home mortgages, getting insurance quotes and answering marketing surveys.
Many frequent fliers — those who routinely tolerate crowded airports and aircraft and endure flight delays and cancellations as part of their lives — say they should earn more miles than non-fliers.
“Why does a person who earns miles by using a credit card and never flies have the same award availability as me, a Delta Diamond Medallion flier who earns most miles by flying?” asks frequent business traveler Michael Sommer, a consultant in Jacksonville. “Where would the airline be without its loyal passengers?”
Though some aspects of frequent-flier programs disturb Sommer, they haven’t kept him from traveling on numerous year-end “mileage runs” — flying solely to accumulate miles and qualify for elite-level status in a program.
On five consecutive days in late November and early December, Sommer earned 22,000 miles he needed for Diamond status by taking three round trips: between Jacksonville and Los Angeles, via Atlanta, and twice between Jacksonville and Seattle, via Atlanta.
Such elite status this year “almost guarantees” him an upgrade from coach to first class on all Delta domestic flights and 125% more miles for every paid flight, he says. It also gives him perks such as no checked-bag fees, free entry into airport club lounges and priority check-in, security line and boarding privileges.
“The real value of frequent-flier programs for lots of travelers is the early boarding and upgrade perks,” says aviation consultant Michael Boyd. “Forget the free travel stuff, because getting a seat is often like trying to win the lottery.”
Perks notwithstanding, “it feels like fraud” when a free ticket cannot be gotten at the lowest mileage-redemption level, Winship says.
Banks and airlines, he says, promise a free round-trip ticket for 25,000 miles to consumers who sign up for a credit card affiliated with a frequent-flier program. But then the consumer is unable to find a flight for that number of miles.
“I would love to see the airlines get their hands slapped in a significant way, but I think they’re savvy enough to protect themselves,” Winship says. “In a court of law, the airlines would be able to point to all the fine print related to the programs.”
Big ‘misconceptions’
Maya Leibman, president of American Airlines’ AAdvantage program, says “one of the biggest misconceptions” is that “getting award tickets is impossible.”
Last year, AAdvantage members redeemed more than 165 billion miles and received than 7 million free flights, upgrades and car rentals. “Award redemption is one of the areas where our best customers give us the biggest kudos,” Leibman says.
During the recession, award redemption at American and other airlines was brisk, and the airlines relied on frequent-flier programs to generate revenue.
“During the difficult economic times, the program enabled some carriers to generate enormous amounts of money by selling miles to third parties,” says Nawal Taneja, professor emeritus at Ohio State University’s aviation department.
Citibank, which issues credit cards affiliated with American, paid $1 billion for the airline’s AAdvantage miles in 2009, according to 10-K documents the airline filed in February 2010 with the Securities and Exchange Commission.
American’s rival, United Airlines, brought in $774 million in revenue from its Mileage Plus program that year, 10-K documents filed by United show.
Last year, American issued 185 billion AAdvantage miles, and 62% of them were sold to program participants, documents filed with the SEC show. The airline’s ancillary revenue increased by more than 5% to $2.4 billion because of increases in passenger service charges, fees and increased revenue from the sale of mileage credits.
The frequent-flier programs of legacy airlines such as American and United have also given the carriers a competitive advantage, says Darin Lee, an airline expert for Compass Lexecon, an economic consulting company.
“Frequent-flier programs have been a very successful means for the legacy carriers to differentiate themselves from the low-cost carriers,” Lee says. “At a time when air travel has become highly commoditized, the programs that allow passengers to redeem miles to exotic destinations not served by low-cost carriers have afforded the legacy airlines a competitive edge.”
Legacy airline Delta pleased infrequent mileage earners in February by eliminating its policy of miles expiring after two years of account inactivity. Miles in nearly all competitors’ programs expire after a certain period of inaction.
“Customer perception has been that airlines are not sufficiently customer-centric,” says Taneja. “Delta’s move could improve customer perception and distinguish the airline and its brand.”
Petersen, the frequent-flier expert, calls Delta’s move “a yawner” and “a public relations” move. He doesn’t expect other carriers to follow suit.
Delta’s move doesn’t create “a lot of corporate pressure” on other airlines’ programs,” Winship says. “Airlines’ least-profitable customers are the people who are most affected by Delta’s move.”
While infrequent mileage earners celebrate Delta’s decision, many of the airlines’ best customers — frequent business travelers whom the programs were designed to reward — are disgruntled.
Businessman Richard Hadden, a member of eight frequent-flier programs, says the programs have become “far less attractive” to fliers who have been flying for more than 20 years.
Yet, the author and professional speaker from Jacksonville admits, the loyalty programs still have him under their spell.
“I’ll pay more to fly Delta because of its program,” he says, “and even endure a change of planes en route, rather than fly cheaper and direct on an airline that doesn’t allow me to concentrate my mileage.”


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