The Brancatelli File
FREQUENT FLYER PROGRAMS:
FREE LUNCH BY ANY OTHER NAME
BY JOE BRANCATELLI
August 2, 1994 -- Frequent flyer programs may be the closest thing business travelers ever get to a free lunch, but the mileage plans are hardly money in the bank.
The free-lunch part is easy to understand: travel and the airlines will eventually give you something for nothing. But the money-in-the- bank part is hard for even savvy travelers to comprehend. A frequent-flyer mileage account is not as safe as a bank account: the "cost" of awards occasionally goes up, and if you're in the habit of "banking" your miles for future use, you lose.
Although airlines sometimes change the cost of awards on an individual basis, the major carriers engineered a huge restructuring of all their award prices in 1988. Travelers who "banked" their miles were hard hit. One example: two first-class tickets to Hawaii had cost just 75,000 miles. By the time the 1988 restructuring was complete, however, some airlines had inflated the price to 240,000 miles.
Another major restructuring is scheduled for early next year. The cheapest award--one coach ticket for travel in the continental United States--will cost 25,000 miles next year. It costs just 20,000 miles now. And those two first-class tickets to Hawaii? They'll cost almost 500,000 miles next year.
The lesson in all this is simple: Whenever you accrue enough miles to earn an award you desire, claim your award certificate immediately. Claiming an award as soon as you earn it doesn't mean you have to take the trip immediately. The award certificate is good for at least one year, and you can make reservations for flights as much as a year in advance. That means your award is valid--and inflation-free--for at least two years after you've claimed it.
If guarding your miles against inflation caused by the very same airline to whom you've pledged your loyalty seems somehow unfair, consider the unsavory alternative. A group of disgruntled American Airlines customers in Illinois sued the airline after the 1988 restructuring. Not only haven't the travelers won their lawsuit, six years later they are still fighting for the right to sue in the first place.
American insists the travelers have no grounds to sue, and has appealed all the way to the U.S. Supreme Court. In April, the Court agreed to consider American's argument. Even if the Supreme Court eventually rules the travelers can sue American, only then will the actual issue of award inflation be contested.
So unless you plan to make a federal case of your free lunch, make sure you don't consider your frequent flyer miles money in the bank.
THIS MONTH'S ANSWERS…
Some salespeople travel with discount books and membership cards that supposedly offer 50 percent off the price of a hotel room. Are these programs really that good?
About a half-dozen firms offer programs promising discounts from 10-50 percent on hotels around the country; the best known are Entertainment (800-445-4137), Quest (800-638-9819), and Encore (800-638-0930). Membership can cost as much as $100 annually, however, and the value of the programs depends on your flexibility. For starters, the discounts are available only against a participating hotel's "rack rate," the full retail price that few travelers ever pay. Moreover, discounts are only available when the hotel believes it cannot sell all or most of its rooms; that usually eliminates holiday periods, "peak seasons," and times when large conventions are in town. Want a low-risk way to test these hotel discount programs? Join the National Travel Club (800-JOIN-NTC). For less than $25 annually, the Club gives you a Quest membership, a one-year subscription to Travel Holiday magazine, free travel insurance, and car-rental discounts.
I recently flew an itinerary that had just one flight number, yet I was forced to change planes en route to my final destination. How can a single flight number entail a plane change?
Unfortunately, a single flight number no longer guarantees a nonstop or even a "direct" flight (a direct flight makes one or more stops, but does not require a plane change). Itineraries under a single flight number may now require a "change-of-gauge" (a transfer between widebody and narrow-body aircraft) or may be a so-called "funnel" flight, which is a wholly fictitious flight number in the computerized reservation system that actually represents a pair of connecting flights. In the future, press your travel agent for details, and specifically ask, "Is this a nonstop flight?"
My airline recently said I could not use frequent-flyer award certificates from my wife's account to claim a free flight. Don't the airlines now allow award transfers?
Most airlines do allow members to transfer award certificates to other parties. However, award certificates from different accounts are not combinable to claim a free flight. In other words, when you want to claim an award, all the miles required must come from a single account, not a combination of accounts.
This column originally appeared in Selling magazine.
Copyright © 1993-2008 by Joe Brancatelli. All rights reserved.