Sky Talk

Frequent fliers burning up miles

Mary Jane Credeur of Bloomberg News has an interesting report on a jump in frequent flier mile redemptions at American and United, as passengers try to avoid higher fares.

     Sept. 19 (Bloomberg) -- American Airlines and United Airlines passengers are burning through record numbers of frequent-flier points to avoid paying higher fares. The seat giveaway is good news for the biggest U.S. carriers.

Airlines are adding surcharges of as much as $100 on frequent-flier tickets. They're also speeding the drain on passenger mileage accounts by expanding the supply of free seats and demanding more points for some flights.

Keep reading for the full story.

- Trebor Banstetter

The ups and downs of airline spinoffs

American Airlines and other carriers have been under increasing pressure to spin off their frequent flier programs this year. The call to "unlock non-core assets" was, in part, responsible for AA's decision to divest American Eagle. But some investors are still calling on the airline to sell off the American AAdvantage frequent flier program, arguing that it's by far the most valuable of AA's properties.

Still, the results of the only major divestiture of a frequent flier program, by Air Canada, is a mixed bag, according to an article in the Toronto Star:

... some are beginning to wonder whether efforts to "unlock hidden value" in Air Canada could ultimately prove to be an exercise in corporate alchemy, a misguided attempt to turn airline-grade aluminum into investing gold.

"What was gained by the frequent-flyer program was lost primarily by the mainline airline," Kevin Crissey, an analyst at UBS Investment Research, wrote in a recent research note.

The report effectively argued that there's no such thing as a free lunch in the airline industry, which probably doesn't come as much of a surprise to anyone who's flown on a commercial jet lately.

The theory underpinning such a move is relatively simple: Unlike airlines, loyalty programs tend to be stable, cash-producing businesses with low fixed costs and substantial growth opportunities. Hence, separating them from risk-laden airlines gives investors direct access to the business, resulting in a higher valuation. It's also believed to remove impediments to growth.

But some are now warning there may also be a significant downside.

You can read the entire story here.

- Trebor

Travelers scheme to keep frequent flier accounts active

As airlines crack down on unused frequent flier accounts, travelers who fly less often are coming up with ways to keep them active, according to a story in USA Today. Some airline customers are visiting Internet sites that offer miles for answering surveys or viewing ads, while others are increasingly using credit cards and other services that offer bonus miles.

American Airlines recently announced that it will delete miles on accounts that haven't been accessed in an 18-month period, either through adding miles or booking rewards.

- Trebor

US Airways may spin off frequent flier plan

US Airways is the latest carrier to consider spinning off its frequent flier plan. In his conference call with analysts last week, CEO Doug Parker said the move was being considered, but he also said he was skeptical of the benefits of such a deal.

American Airlines has similarly begun studying divesting its American AAdvantage frequent flier program, after being pressed by FL Group, a major investor.

- Trebor

AA launches new miles tool

American AAdvantage fanatics have a new tool in their quest to pile up miles - an interactive map that shows hotels, restaurants and other businesses that offer American miles when you buy goods or services. So before you go out to dinner, for example, you can check the site and find a restaurant, like Lupe's Tex Mex Grill in Bedford, that will give you miles as well as tasty burritos.

The tool, dubbed Milefinder, currently covers 11 cities, including Fort Worth and Dallas.

"We are always looking for new avenues to engage travelers in ways that are personal and relevant to them," said Kurt Stache, president of the AAdvantage program, in a news release.  "AAdvantage MileFinder is need- and location-specific, so it is an ideal tool for AAdvantage members to see how easy it is to earn miles in their neighborhood or on their next trip."

- Trebor

Racking up airline miles

  Fairmont Hotels has signed a new agreement with United and Lufthansa airlines and Cathay Pacific that gives you airline miles every time you stay at one its luxury hotels.

Already, Fairmont has similar agreements with American and Alaska airlines, Air Canada and Emirates.

The 100-year-old hotel chain consists of 51 properties in 10 countries, including one in downtown Dallas (pictured left).

-David

Miles buzz

Frequent fliers have been buzzing about this bit of news from American about its Aadvantage program. Some of the comments from the road warriors at FlyerTalk:

It's a great way to help ensure your infrequent flyers become even more infrequent.
Obviously they want to prod people into desired behaviors to comply with said policy.
But if people think the policy is unfair, they won't be inclined to do that.

The sky is hardly falling down; it is hardly difficult to keep an account active ( 10 mins on opinion place every year would do it ) ; 18 months of inactivity hardly makes someone a Frequent Flyer does it?

Perhaps someone else has already noted this, but I just got my new PLT card a few days ago, and I realized that if I stopped flying/spending/redeeming now, my status would outlast my miles!