Frequent-flier rules favor big spenders Carriers are changing strategy to the benefit of full-fare passengers



When the 23 million members of United Airlines' frequent-flier program awaken on Jan. 1, they will face not only a new year but also changes in the program's rules. Members who redeem miles for certain free flights will be required to stay over a Saturday night during their travel, and upgrades will be allocated differently.

United's members are not alone. Welcome to the changed -- and still changing -- world of airlines' frequent-flier programs. And while there are more ways than ever to obtain airline miles -- from buying groceries to making tuition payments -- a fundamental shift in strategy is giving new advantages to the airlines' best customers, who usually travel for business and often pay the highest fares.

In many airlines' programs, these big spenders are receiving perks like bonus miles, preferred seating, extra carry-on baggage allowance, early boarding privileges, special check-in desks, exclusive phone lines for reservations or complaints, priority baggage delivery to the airport carousel, overnight delivery of award tickets and access to airport clubs.

For people who travel a lot, such perks can help make even a grueling journey tolerable. But, of course, those benefits are far from free.

To reach the upper frequent-flier tiers, customers must meet annual mileage minimums. To join United's Premier Executive level, for example, or American Airlines' Platinum level or Continental Elite Gold, passengers must fly 50,000 actual miles, or 60 flight segments, on purchased tickets during the year. A segment is industry language for any flight from one city to another; Los Angeles to New York is one segment, and Los Angeles to Chicago to New York is two segments.

One step -- several perks below -- is United's Premier level, American's Gold and Continental's Elite Silver, each requiring 25,000 miles or 30 segments. Continental also offers an Elite Bronze category, requiring 20,000 miles or 25 segments.

To ensure the loyalty of their most frequent fliers, some carriers have begun adding even higher reward levels.

Northwest Airlines, for example, recently created an International Gold Elite card for the several thousand passengers -- out of its total of more than 52 million -- who travel frequently to Europe or Asia on first- or business-class fares. Among an array of other perks, they are guaranteed confirmed reservations on any otherwise sold-out flight operated by Northwest.

United offers Premier 1K, for passengers who fly at least 100,000 miles a year or 100 segments. In addition to most of the perks listed above, Premier 1K members alone are exempt from the blackout dates that apply to United's free tickets for off-peak travel.

Within the airline industry, the "road warrior," who travels often but sometimes on advance purchase, low-cost tickets, is becoming less important than the "high-yield passenger," "full-fare passenger" or "VFF," or very frequent flier.

Almost without exception, these terms refer to the men and women flying on business who need to get where they are going tomorrow, if not yesterday, and pay for the privilege (through the nose, in the opinion of many travel managers) with high fares.

About 25 percent of TWA passengers, for example, account for PTC one-half of the carrier's revenue. Frequent travelers who pay full fare account for only 9 percent of United's passengers but 44 percent of its revenue.

Such figures help explain why American Airlines is giving 40,000 bonus miles to passengers who pay full fare for first- or business-class tickets to Europe and complete their travel by Jan. 31, 1998. That is in addition to the usual award miles for the trip.

The 40,000-mile bonus for travel to Europe is being offered by other airlines, too, with some variations: US Airways is offering it to its business-class travelers until Jan. 31, and Continental will add 10,000 more miles, for a bonus of 50,000, if business-class passengers pay with an American Express card.

For business-class travelers on TWA, the travel deadline for the 40,000-mile bonus is Feb. 28.

In a departure from the mileage bonuses, British Airways will offer passengers who travel to Europe by Jan. 31 -- in first or business class or on the Concorde -- a free economy-class ticket to any British Airways destination in the world.

Airlines have also found other ways to bolster the award mileage for their highest-paying passengers, and, in some cases, to deny it to those who pay the least.

TWA, which is making an all-out effort to attract the bigger spenders, gives full-fare passengers one mile for each mile flown and an additional mile for each dollar they spend on the ticket.

British Airways and most U.S. carriers deny frequent-flier mileage to passengers who fly with tickets issued by consolidators, who buy airlines' unsold seats at big discounts and sell them at lesser discounts. Several Asian carriers that fly to and from the United States award frequent-flier miles to first- and business-class passengers but not to those in economy class.

Pub Date: 12/14/97

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