Airlines boost frequent flier threshold

TRANSPORTATION & THE PORT

January 21, 1994|By Suzanne Wooton | Suzanne Wooton,Staff Writer

So you like paying rock bottom airline fares while still racking up the frequent flier points you did when ticket prices were much higher? Well, some airlines have decided you can't have it both ways.

United, American and USAir airlines are increasing the minimum mileage required for a free ticket in the continental United States and Canada from 20,000 to 25,000 points. Delta, Northwest and Continental are expected to follow.

"It's like a price increase that has probably been overdue for some time," said Don Witte, director of USAir marketing services.

For USAir, the change will take effect Jan. 1, 1995. United's increase from 20,000 to 25,000 will occur Aug. 1 while American will change Feb. 1, 1995.

Even though you have to redeem points by these dates to cash in at the current level, the travel certificates issued are typically valid for a year. Mr. Witte predicts the change will produce a sizable number of requests later this year.

The increase is the first since 1981 when American Airlines introduced frequent flier points to foster passenger loyalty by giving repeat customers free trips or upgrades to first class.

In fact, airlines have lowered their awards criteria in recent years. Prior to 1989, a free trip within the continental United States or Canada typically required 30,000 frequent flier miles.

The increase is part of restructuring in the airline industry, which has lost more than $12 billion since 1989. With fares falling in many markets, airlines are hard pressed to reward passengers the same way they did when ticket prices were much higher.

"They're saying, 'How can we give them the same number of points when the price of the ticket has changed from $347 to $112?' " says Randy Petersen, publisher of Inside Flyer, the Colorado Springs-based publication which tracks frequent flier programs.

According to Mr. Petersen, several airlines will likely impose expiration dates on points this year. Five carriers -- Northwest, United, American, America West and Alaska Airlines -- already have such limits.

Nearly every American airline has a frequent flier program, an indispensable marketing tool in an intensely competitive industry. Membership industrywide has soared from 1.8 million to more than 30 million in just 12 years.

In addition, numerous international carriers have adopted the programs. Already, they have taken steps to tighten their frequent flier programs. Two years ago, Canadian airlines lowered the number of miles passengers can earn while flying on discount tickets. Most international airlines don't even give credit for economy class tickets.

All airlines control the number of seats on any given flight. But the demand for free seats has been growing as passengers find more and more ways to earn points through corporate tie-ins, using an affinity credit card, placing a long-distance call, renting a car or staying at a hotel.

The latest changes in basic domestic awards for travel in the continental United States and Canada will affect infrequent travelers the most. Because it won't pay to have points spread around various airlines, those travelers must start showing more loyalty to one airline. In addition, passengers probably will look for more ways, such as affinity cards, to earn mileage.

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