Personal Business: Travel
HOW FREQUENT FLIERS CAN STAY IN THE GAME
When airlines tighten frequent-flier rules, the howls are as loud as those against income-tax hikes or Social Security cuts. "Changing the programs is their right, but to make these changes retroactive for miles we've already earned under the old rules is unfair," argues Hank Segal, a sales vice-president at a unit of Maidenform in New York who logs about 75,000 air miles a year.
Unfair or not, it's about to happen anyway. United Airlines, American Airlines, and USAir recently announced hikes on the mileage needed for a free domestic ticket by 5,000 miles, to 25,000, by early next year. United will tweak other award levels by Feb. 1. Northwest Airlines is expected to boost mileage required for domestic and Asian travel this year. Delta Air Lines is revamping its plan, too.
Frequent-flier programs are shifting back toward their roots--as plans for people who really do fly frequently. Until 1989, major airlines required 35,000 miles for a free domestic ticket--double the level for some Continental Airlines freebies today. But because of lower mileage requirements, mileage bonuses, and increased leisure travel in the past four years, even homemakers and retirees have become mile-counters.
THE MATH. USAir Vice-President Dan Brock claims that "with all the ways to earn miles today--from mileage partners to credit cards--a 5,000-mile increase shouldn't be a problem for frequent fliers." But it will be rough for occasional or leisure travelers. Here's why: On United or American, a traveler who normally flies short hops that earn the 500-mile minimum would need an additional 10 flights to earn a free ticket under the higher requirement. In total, a member who accumulates mileage solely by flying will have to log 50 flights before earning a freebie. "The people who will be most affected will be the ones who fly once or twice a year. But since 87% to 90% of all awards are redeemed at the 20,000-mile level, this is a big change," says Randy Petersen, editor of the newsletter Inside Flyer.
Just ask Chicago attorney Mike Wilczynski, who flies short hops on American about six times a year, taking several years to earn a ticket. The 22 million-member AAdvantage plan purges mileage if you don't amass enough to redeem a free ticket within three years. "So now," notes Wilczynski, "my miles may start expiring before I reach the higher level."
There are ways for savvy fliers to make the best of a bad situation. First, consider claiming free domestic tickets before the higher mileage levels kick in. If you belong to American Express' Membership Miles plan, whose miles can be applied to five airline programs, transfer enough mileage to USAir and Northwest to "top off" those accounts to today's lower award levels.
With planning, you can still buy time to take advantage of the old, lower mileage levels. For example, redeem American's AAdvantage miles for a travel voucher by Jan. 31, 1995. (Do it by Dec. 29, 1994, if you have miles expiring at the end of '94.) The voucher must be exchanged for a ticket within a year, but that ticket is good for another 12 months. The travel date and destination on the ticket can be changed for $25. So you can lock in the 20,000-mile level for travel through Jan. 31, 1997.
With all the changes, it may be time to reconsider which plan is best for you. USAir is retaining its 750-mile mileage minimum, allowing fliers who take short hops to earn freebies while flying one-third fewer flights than they would have to with American or United. Trans World Airlines and America West Airlines will continue to offer a 750-mile minimum and domestic tickets for only 20,000 miles--requiring almost half the flights of the Big Two. And for now, Continental and Southwest Airlines are retaining their more lucrative award schedules.
One thing's certain: Mileage-hungry travelers will have to scout for nonflight mileage sources, such as credit cards, car rentals, and hotels. For nondiscounted stays through Mar. 31, 1994, Radisson Hotels is offering triple mileage on five airlines, while stays at Hilton Hotels paid for with an American Express card earn double mileage on six carriers. Last month, American Telephone & Telegraph launched True Rewards, which gives five miles in any of three airline plans for every dollar spent on its long-distance service. In the end, there'll still be freebies, but only the most dedicated fliers will get them.TABLE: REINING IN THE FREEBIES
AIRLINE/ACTION EFFECTIVE DATE
NORTHWEST Apr. 1, 1994
Reducing minimum mileage credit by 33%; also withdrawing from American Express Membership Miles
UNITED Aug. 1, 1994
Raising miles needed for a free domestic coach ticket by 25%
TWA Dec. 31, 1994
Ending co-mileage agreement with American Airlines
USAIR Jan. 1, 1995
Boosting mileage for domestic coach award ticket by 25%
AMERICAN Feb. 1, 1995
Raising miles for domestic coach award by 25% and first class by 13%
DATA: AIRLINES, BUSINESS WEEK