Airlines trying to lure frequent fliers

Incentive: Carriers use various programs to make air travel attractive again.

Strategies

October 28, 2001|By Donald D. Groff | Donald D. Groff,PHILADELPHIA INQUIRER

Is this a good time to cash in frequent-flier miles for free flights?

Yes -- in many cases.

Despite early speculation after Sept. 11 that frequent-flier programs might be in danger of suspension by strapped airlines, several lines are using their programs to lure passengers back into the air. At least five airlines, including US Airways, have for a limited time reduced to 15,000 the mileage required for a free coach-class domestic flight.

Normally, the amount needed is 20,000 to 30,000 miles, depending on the airline and timing.

Discounted mileage deals also are being offered on business, first-class and some international travel. As first announced, most require booking by late October or early November for flights through mid-November. The programs could be extended if airlines decide the incentive is working.

While the 15,000-mile level is at least 25 percent "less expensive" than normal, passengers should apply the usual test before taking advantage.

Determine first what the round-trip flight would cost if booked as if you were going to pay for it. One formula comes from Consumer Reports magazine, which has studied award patterns and concludes that for reasonable value, you should use your miles for trips that cost more than $250, or that offer at least 1 cent per frequent-flier mile.

For instance, if you use a 15,000-mile award for a flight that you could buy for $132, the value of each mile is .0088 ($132 divided by 15,000), below the 1-cent threshold. But if it were a $450 trip, the value of each mile would be 3 cents -- a very good return.

The airlines are offering some very low fares on certain routes, so the trick is to avoid using the frequent-flier awards to cover really low-fare flights. Unless, of course, getting there for free is more important than the actual value.

Summaries of the deals can be found at www.smarterliving.com and www.webflyer.com (click on "NotiFlyer").

In brief

Travel insurance

Buyers of travel insurance are advised to check their policies carefully: There are major changes afoot, some favorable to consumers, some not, in the wake of the Sept. 11 attacks.

One big insurer, CSA Travel Protection of San Diego, imposed an indefinite moratorium on covering financial default by travel providers on Oct. 5, said Claudia Fullerton, chief marketing officer, so if your cruise or airline company goes bankrupt, your policy won't reimburse you.

Fullerton said CSA's underwriter made the decision because of "the instability in the travel industry." She also noted millions in payouts CSA expects to make on claims by customers of Renaissance Cruises, which abruptly ceased operation last month.

Travel Guard International, a Wisconsin company that says it handles about 40 percent of the U.S. travel insurance market, has raised premiums by about 10 percent since the attacks, said spokesman Dan McGinnity.

Effective Sept. 21, it also began to cover terrorist incidents in the United States and abroad; most insurers cover only foreign incidents. Under the policy, customers can be compensated if they cancel a trip that would put them in a city within 30 days after a terrorist incident there.

McGinnity said his company, as of last week, still covered financial default. -- Los Angeles Times

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