At 25, Mileage Programs Are Down but Not Out

It was 25 years ago Monday, May 1, that American rolled out the first modern mileage scheme, AAdvantage. Since then, the programs have evolved in ways no one could have imagined.

They have proven to be powerful marketing engines -- so much so that no major airlines feel they can compete successfully without one.

The marketing programs that began life as cost centers have become profit centers, generating billions of dollars annually from the sale of frequent flyer miles to credit card issuers and other program partners.

And they have morphed from narrowly focused frequent flyer programs into frequent buyer programs which appeal to the masses.

By any measure, today's programs are huge. Each of the largest airline programs -- those of American, Delta and United -- has 40-50 million members. Sixty million travelers belong to one or more hotel programs. And well over 10 trillion unused miles reside in the accounts of program members.

But the programs -- the airline programs in particular -- have been losing traction with consumers. As we hear all too often from subscribers to this newsletter, some of the airlines' best customers, the award side of the programs has languished even as the opportunities to earn miles have burgeoned.

Will the programs be around to celebrate their 50th birthday? Five years ago, the answer would have been an unqualified "Yes." Today, though, it seems entirely possible that the programs' value could continue eroding to the point that they're widely dismissed as irrelevant.

Mileage programs have had a long and sometimes controversial run. But if the airlines allow their value to decline further, the programs' future is by no means assured.

Last Chance to Buy a Book, Win a Bag

Time is running out on the special promotion for "Mileage Pro - The Insider's Guide to Frequent Flyer Programs," co-authored by the editor of this newsletter, Tim Winship, and Randy Petersen.

Through May 4, everyone who purchases a copy of the book via the publisher's website will be entered in a sweepstakes to win one of two pieces of premium-quality luggage from Briggs & Riley.

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FrequentFlier Forum Topics

As always, there's plenty of activity on the FrequentFlier Forum.

In the "Airline Programs" Forum, White Diamond wonders whether a company can insist that the miles an employee earns for business trips be used toward future company travel: "He's been racking up a lot of frequent flier miles this way, and my supervisor and I are wondering if the company has any legal right to make this gentleman use his frequent flier miles for company related flights, and not personal flights?"

Also in the "Airline Programs" Forum, ashmarie wants to earn miles for making the travel arrangements, even though she's not the one actually traveling: "I book a ton of flights for my boss online with my new job just using Travelocity or Orbitz or the actual airline websites, etc. Does anyone know of any programs where I can be awarded points or miles for using a certain service for buying the tickets (the credit card I use is in my name)?"

And much more. Questions, answers? Post them to the Forum!

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From American: 25 Deals in 25 Days

Need a little spice in your mileage life? To mark the 25th anniversary of the program's launch, American will be announcing a new AAdvantage promotion, award discount or travel sweepstakes on each of the first 25 days of May.

American kicked off the festivities by awarding 25,000 miles to every passenger on each of 10 flights departing from 10 different airports on May 1.

The deals to date:

Day one - a 25% discount on select MileSAAver awards booked and ticketed by May 31 for travel between Aug. 22 and Nov. 8.

Day two - a chance to win a Royal Caribbean cruise for $25 (see "Sweeps & Freebies" section below).

Day three - a 25% bonus on miles earned for charges to the Citibank AAdvantage credit card during May, June and July. Maximum: 2,500 bonus miles during the promotion period.

And counting...

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Delta Offers Miles for Clothing Care

With the newly launched SkyMiles Clothing Care program, SkyMiles members can earn miles for dry cleaning.

To participate, SkyMiles members must register a credit card at skymilesclothingcare.com. Thereafter, they'll earn one mile for every dollar charged to the registered card at participating dry cleaners. There's also a one-time bonus of 100 miles for the first $50 spent and 200 miles for every $200 spent during a consecutive two-month period.

Members may register up to five credit/debit cards in the program at no cost. Once a card is used at a participating establishment, miles will be automatically credited to their SkyMiles program account.

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Double Delta Miles at Sofitel Hotels

Through June 30, SkyMiles members will earn double miles for qualifying stays at Sofitel hotels in North America.

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Bonus Midwest Miles for Kansas City Members

First: ONLY Kansas City-based Midwest Miles members living in the 64000-67999 zip code range are eligible to participate in this promotion.

Between May 1 and Aug. 31, eligible Midwest Miles members will earn up to 10,000 bonus miles for flights from Kansas City to the following cities: Boston; Ft. Lauderdale; Los Angeles (LAX); Milwaukee; New York La Guardia; Orlando; Pittsburgh; San Antonio; San Francisco; San Diego; Tampa; or Washington, D.C. (DCA).

Members earn 2,500 bonus miles for flying to two different destinations, 5,000 bonus miles for three different destinations, and 10,000 bonus miles for four different destinations.

Registration is required using promotion code 32006.

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Northwest Offers Bonus for Osaka Flights

WorldPerks members can earn up to 10,000 bonus miles for flying Northwest to Osaka by June 30.

Earn 10,000 bonus miles for roundtrip travel in J, C or Z class, 7,500 in Y, B or M class, and 5,000 in Q, V, T or K class.

Registration is required.

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United Extends Credit Card Redemption Options

With the launch of the new Mileage Plus Choices Visa card on May 1, United claims that it has reinvented airline loyalty programs. Well, not exactly. But the new card does add substantial value to its predecessor, albeit at the cost of some added complexity.

Rather than traditional Mileage Plus miles, cardholders now earn Choices for purchases charged to their Mileage Plus credit cards. Choices are just like regular miles, and can be redeemed in conjunction with regular miles for restricted and unrestricted awards, upgrades, and so on. But they can also be redeemed for several new awards that cannot be obtained with regular miles.

Most importantly, Choices can be cashed in to pay, in full or in part, for a United revenue ticket booked at united.com. When redeemed for United tickets, Choices are worth 1¢ each, so 15,000 Choices would be needed for a ticket worth $150.

Choices can also be redeemed for hotel stays and car rentals booked at united.com. In that case, the value of Choices declines to .8¢ each.

As well, cardholders can redeem 40,000 Choices for an annual subscription to Economy Plus Access and up to 50,000 Choices for as many as 5,000 elite-qualifying miles and five elite-qualifying segments per year.

In a nutshell, United has broadened its card benefits to include some of the features of cards like the Capital One No Hassle Miles card, which makes much of its "any airline, any seat, any time" awards. United can't match the "any airline" piece, but it steals Capital One's thunder as far as award restrictions go.

United's marketing materials proclaim Choices "a new kind of currency." Yes, but do we really need a new currency -- especially one with a convoluted relationship with the old currency, traditional miles?

When Delta and American Express launched the SkyPoints card -- which also features a new currency, SkyPoints, which can be redeemed for discounts on Delta paid flights or converted to traditional SkyMiles -- I suggested that a better approach would have been to extend the new benefits to the old currency. Why muddy the waters with an extra currency? The same question applies in this case.

And why is it that the new miles (Choices, I should say) earned for using a credit card to purchase a toaster, for instance, are more valuable than miles earned for flying on United? There's something fundamentally illogical about that.

Quibbles aside, Mileage Plus credit cardholders lose nothing and gain considerable awards flexibility with this change. It's definitely a step in the right direction.

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Deal Alert from SmarterTravel.com

1) Hawaii Fares on Aloha from $149 Each Way

Travelers departing from California can take advantage of Aloha's Hawaii sale. Flights start at $149 one-way, and are valid in May and June.

Travel at the lowest prices is valid Tuesdays through Thursdays through June 30. Book tickets by May 9.

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2) Europe Spring Sale Fares from $374

Spring flights to Amsterdam, Barcelona, London, Paris, and other cities in Europe are on sale from package tour provider 1-800-Fly-Europe. Prices start at $374 roundtrip for travel in May.

Departures are valid midweek through May 28. Book tickets by May 19.

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Win a $25 Royal Caribbean Cruise

Enter the "25 Cruises for $25" sweepstakes by May 31 for a chance to win one of 25 three-night Royal Caribbean cruises for $25 each.

Participants must be AAdvantage members to enter.

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[Visit http://frequentflier.com/sweeps.htm for more travel sweepstakes.]

Feedback from the Frontlines of Travel

"What's in your wallet?

"This letter today [in last week's newsletter] is the best laugh of all. With full copyright credit to Scott Adams the creator, it's as though Dilbert found his way into cashing miles given out by Dogbert.

"How long will it take for so many people to wake up to the shell game of frequent flyer miles from credit card banks so as to cancel their mileage cards with these snake oil salesmen? If no takers, there'll be no bakers, no candlestick makers with pointy hair in the bank office suites as pioneered by that little weasel seen last year on PBS's 'Frontline.'

"As the ad says: 'The answer is always NO!' Time for the public to insist that cuts both ways and walk away from these scams." [Ed N. - Portland, OR]

"Just booked someone on Southwest from San Diego to San Jose, CA for May 9 - 10, 2006. Southwest's fare $222.60. United's fare to San Francisco was $860.30. Guess which one he took? UA!

"Flying into less crowded airports can definitely save you lots of money as in this case. Guess this man had money to burn! But wait until his company finds out. Bye bye birdie." [John H. - International Travel Counselor]

Until next week...