=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/chronicle/archive/2003/02= /23/TR20993.DTL ---------------------------------------------------------------------- Sunday, February 23, 2003 (SF Chronicle) Failing to honor promises could put air miles at risk Ed Perkins A recent news story, widely circulated, concluded that frequent-flier programs were in danger of going the way of Blue Chip Stamps. The main point of evidence cited was the move by several big car-rental companies to charge travelers for those miles that were formerly free. "Nonsense," retorted a leading frequent-flier newsletter; the programs will remain strong because they're so profitable to the airlines. Who's right? In my book, neither got it quite right: If frequent-flier programs lose their clout, it won't be because a few companies charge customers for miles or because they become money-losers for the airlines. Rather, the programs' biggest risk is airline greed -- failure to deliver on the primary promise: award trips and upgrades. And that risk is serious. Let's face it: When your employer pays for the ticket, frequent-flier awards are bribes. If you don't really believe that, just consider a parallel case. If you were, say, the IT manager of a middle-size company, and a salesman told you, "Buy $20,000 worth of my servers and I'll give you a free trip to London or Honolulu," you'd either throw that salesman out of your office or your boss would throw you out of your job. So when an airline says, "Buy $20,000 worth of my tickets and I'll give you a free trip to London or Honolulu," it's really the same thing. If you pay for your own tickets, the frequent-flier credit amounts to a rebate rather than a bribe. Either way -- bribe or rebate -- those miles lose their value and their pull if you can't use them. That's the potential Achilles' heel for the airlines. Accumulating many thousands of miles doesn't matter if you can't get a seat or an upgrade, where you want to go and when you want to go. I originally figured that, in the current traffic slump, the airlines would be extremely liberal with their frequent-flier trips. After all, if the planes are not full, why not make it easy for travelers to use their awards -- and work off some of the tremendous backlog of unused miles? Unfortunately, the airlines seem to be making it harder, not easier, to use miles. I keep hearing from readers who can't get the trips they want. And most of the big airlines are making it much harder for ordinary travelers to get frequent-flier upgrades. The airlines certainly profit on the miles they issue, themselves, by keeping you as a customer even when some competitive line would have offered you a better deal. They also profit in that travelers' appetites for frequent- flier benefits are great enough to allow the airlines to cut back on product quality. And when they sell miles to third-party companies -- car rental companies, credit-card issuers, hotels and such -- that use them to entice customers, the airlines actually get more revenue from a seat than they'd get by selling a cheap ticket directly to a traveler. As long as the system worked reasonably well, everybody was happy. The airlines and their partner companies got your loyalty and your business, and you got "free" travel. But that balance falls apart when you can't get the "free" travel you've been promised. Cutting back on frequent-flier trip availability is like switching a monetary bribe from U.S. dollars to Monopoly money. Right now, I don't sense that the airlines have yet gone too far to destroy their programs. But they're pushing close to the edge. My wife's take on the situation is incisive: "Frequent-flier miles do not improve with age." Slowly but surely, the airlines seem to be devaluating the value of their outstanding miles. Use yours sooner rather than later. E-mail Ed Perkins at eperkins@ mind.net.=20 ---------------------------------------------------------------------- Copyright 2003 SF Chronicle