The Extra Mile

Frequent Flyer Rules, They Are a Changin'

Changes require patience, vigilance.

May 28, 2007 - As exasperating as the tangled mess of mileage program rules can be, changes to those rules can be more irksome still.

As loyalty program members know -- if they've read the programs' terms and conditions, as they are contractually obliged to do -- virtually all the airlines' mileage schemes include legal verbiage that allows them to change the rules whenever they choose.

Delta's, which is typical, reads as follows: "Delta and its program partners reserve the right to change program rules, benefits, regulations, Travel Awards, fees, mileage Award levels, and special offers at any time without notice."

In fact, ironically, the impermanence of the rules may be the programs' most permanent feature.

While in theory change can be for the better as easily as for the worse, a "Notice of Upcoming Changes" has come to signal a warning of the pending loss of program members' benefits and the devaluation of their accrued miles and points.

As the following recent examples illustrate, consumers have good reason to be wary of program changes.

Award prices creep higher

The rules of paramount concern to many program participants are those governing the price of awards. And when those rules change, it's almost always a change for the worse.

Since 1995, when a host of major airlines increased the price of the most popular domestic coach-class award from 20,000 to 25,000 miles, the price hikes have mostly been scattered and incremental. Which is little comfort for those paying more for their awards.

Beginning in March, for instance, members of American's AAdvantage program were assessed a new $150 cash surcharge when using miles to upgrade on flights between the mainland and Hawaii, as well as higher cash surcharges for international upgrades.

In the realm of hotel programs, the Hilton, Hyatt, and Starwood chains all revised their award charts in the past 18 months, effectively increasing the prices of many awards in their programs. And members of Marriott's Rewards program will have to redeem more points when booking unrestricted Stay Anytime rewards beginning June 1.

The shrinking life of miles

After increases to award pricing, what most perturbs travelers is changes to the policies governing the expiration of their miles.

After years of relative stability, Delta, beginning this year, cut the period during which members' accounts must be active from the industry-standard three years to two. US Airways amended its policy, effective January 31 of this year, reducing its expiration policy from three years to 18 eighteen months. And United announced in January that beginning next year, Mileage Plus members also will have to be active within 18 months to keep their miles alive.

Making a bad situation worse, these rule changes were designed to apply retroactively. So, for example, when United's new policy takes effect on January 1, 2008, miles in accounts with no activity since July 1, 2006, will be deleted.

Timing matters

While the program operators clearly have a legitimate legal right to make changes, the question of timing is murkier.

Common sense suggests that members of a program should be given advance notice of any rule changes that would negatively affect the value of their miles. But just how far in advance is adequate?

In 1988, the National Association of Attorneys General issued guidelines which addressed that issue specifically, among others. And for many years thereafter, the airlines were careful to give members of their mileage programs at least six months' notice before the effect date of any significant program changes.

But whether because of a change in the political climate or for other reasons, the airlines gradually stopped observing that rule -- which never had the force of law -- and now routinely roll out changes with little advance warning, and sometimes with none at all.

The rule to end all rules

There is one rule which overshadows all others and which has the potential to give frequent flyers the biggest headache of all. The ultimate rule (as expressed by Northwest in this case): "Northwest has the right to terminate the WorldPerks program at any time." That's an option reserved by all airlines.

Frequent flyers can only hope that it's an option the airlines never choose to exercise.

Monitor rule changes

Failure to stay abreast of rule changes can have real consequences for program participants.

Members of the programs of Delta and US Airways who failed to heed notices of new mileage expiration policies risked losing their banked miles. (Neither airline would disclose the number of accounts affected by the policy changes.)

And when programs raise award prices, members who are out of the loop miss their chance to book awards at lower rates, before the increases take effect.

For the most part, travel suppliers make a good faith effort to communicate upcoming changes to members of their loyalty programs. But those notices are buried among thousands of other messages competing for the attention of busy consumers. So vigilance is essential if mileage collectors want to avoid being blindsided by unexpected changes.

Travelers can do little to stem the relentless tide of mileage program modifications. What they can do is combine two cardinal rules from the playbook of life: Pay attention; and make the best of a bad situation.