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Airlines tighten up on frequent flier perks

Flying on a bargain fare? Your miles may not be worth as much. But for some customers the perks get plusher.

By STEVE HUETTEL, Times Staff Writer
© St. Petersburg Times
published January 5, 2003


TAMPA -- Mark Petche joined the chorus of US Airways frequent fliers who howled when the airline tried to deny its most precious perks to customers who flew too often on bargain tickets.

US Airways backed down. But the carrier, which is struggling to emerge from bankruptcy court, had already found another way to squeeze some of its best customers: charge $10 for luggage tags that identify elite-level fliers. The tags used to come free in the mail.

"Very chintzy," says Petche, a Tampa lawyer who earned US Airways' top-tier status, Chairman's Preferred, with 132,000 miles of flying on the airline last year. He was able to wrangle a couple of free tags by calling the special line for Chairman's Preferred members.

Increasingly, frequent fliers are finding rewards -- large and small -- are harder to come by as financially strapped airlines struggle to pump up revenues.

Much of the carriers' efforts are aimed at weeding out customers who fly on bargain fares yet win the airlines' most coveted goodies by racking up enough miles (typically 25,000, 50,000 or 100,000) in a year to qualify for various levels of elite status.

That's why all miles flown aren't created equal anymore.

On Wednesday, Delta Air Lines began cutting the number of miles that customers using its most deeply discounted tickets earn toward elite status. On the flip side, those paying full coach fare or higher receive multiples of the miles they fly.

United and American Airlines gave elite fliers who didn't hit mileage targets last year a chance to qualify anyway. But both charge for the privilege.

Tighter rules are hitting infrequent fliers, too. Northwest and Continental Airlines boosted the number of miles required to get a free coach flight last year by 5,000 miles to 25,000.

"They're all trying to reward those who spend lots of dollars and reward less those who spend little," said Chris McGinnis, who publishes TheTicket, a newsletter aimed at Delta frequent fliers.

Some of the best rewards come with elite-level status: upgrades to first class, free or discounted memberships to airport clubs and extra frequent flier miles to redeem for free trips.

By boarding first, elite members get first crack at overhead bins. They can reserve a prized seat in the front of coach and get off the plane quickly. Those special luggage tags ensure their checked bags are among the first that pop out on the luggage carrousel.

As the economy roared through the mid to late 1990s, airlines scrambled to lavish perks on high-paying business travelers.

With most carriers suffering huge losses -- largely because business travelers are flying less and buying more deeply discounted tickets -- their focus has changed to rewarding only those who consistently pay the highest fares.

Delta's new rules on counting miles for elite status quickly drew barbs on frequent flier bulletin boards on the Web.

Giving only half credit for miles flown on the cheapest tickets sends the wrong message to valued elite fliers who are on vacation, said Joe Brancatelli, who runs a Web site for business travelers.

"It says some people are worth less than others," he said. "We don't care about you if you're flying on the cheap. . . . You're worth half a customer."

Delta contends that giving elite-level credit based solely on miles is outdated with the proliferation of bargain fares. Hotels, for example, have long based their reward programs on dollars spent rather than nights stayed, said Jackie Yeaney, Delta's director of consumer marketing.

"We want to give people more credit for the more money they bring to our company," she said.

Delta travelers buying a full coach fare now earn 11/2 miles for each mile flown, and those paying for first or business class get double miles. Thousands of low-fare fliers will be purged from its elite SkyMiles Medallion program, Yeaney said, but thousands more will qualify for the first time.

In the end, Delta expects the number of elite members will increase slightly or stay the same. Between 2 and 3 percent of the 32-million SkyMiles members reach Medallion levels, Yeaney said.

Medallion members flying on the cheapest coach seats tote up fewer miles toward their elite status than before, but they now will be able to upgrade into first class at no extra cost if seats are available.

Delta hasn't decided how to count miles on the new, all-coach airline it will launch this spring connecting cities in the Northeast and Florida, Yeaney said.

After air travel plummeted in the wake of the Sept. 11, 2001, terrorist attacks, many airlines automatically renewed all elite level memberships for 2002.

With business travel still in a slump, United and American are offering elite fliers who didn't fly enough miles last year another way to qualify.

United is giving Mileage Plus members within 10,000 miles or 10 trips of reaching elite status a three-month extension to make their numbers. Members have until Feb. 16 to register -- and pay a $25 fee.

American is giving members the chance to make up the difference with cold cash: $395 for AAdvantage Gold and $595 for AAdvantage Platinum.

Brancatelli, the business travel editor, says it's laughable that United, which is in bankruptcy reorganization like US Airways, is making its best customers pay to remain loyal.

But Randy Petersen, editor of InsideFlyer magazine, called both offers good deals. Avid frequent fliers short on elite miles often spend the last days of the year on "mileage runs," trips designed to put them over the top.

"Most of them spend $325 or so on a mileage run anyway," he said. "This way, you can stay home and enjoy yourself. And American makes more money because they save the costs of flying you."

Petersen also disagrees with fliers who criticize airlines for boosting the requirements for free award tickets.

Continental and Northwest had reduced the number of miles needed for a coach seat to 20,000 in an attempt to fill empty seats after the Sept. 11 attacks, he said. The carriers simply returned to the standard 25,000-mile requirement last year.

The biggest question on frequent fliers' minds is whether the miles they've accumulated are safe, especially those earned on US Airways and United.

Airlines are under no legal obligation to honor miles and could fold up their frequent flier programs at will, Petersen said.

But short of US Airways and United switching from reorganizations to bankruptcy liquidations, he said, the airlines are unlikely to touch members' miles. The carriers would lose too many customers just when they desperately need the business, he said.

Other travel experts aren't so confident.

Charlie Leocha, who writes a Web travel column under the moniker Cheap Charlie, urges readers to stop flying the two airlines, get out of their frequent flier programs and switch their affinity credit cards to ones offered by healthier carriers.

He warns that the recent squeeze on frequent fliers and elite members will only get worse as airlines battle to cut costs and raise revenues.

"They're in such dire straits financially, they trot out something new every day," Leocha said. "Everyone's in the same survival mode. . . . and airlines are like lemmings. If one does it, they all do."

-- Steve Huettel can be reached at huettel@sptimes.com or (813) 226-3384.

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