View Full Version : Given such uncertainty, what are you doing with your miles now


marlin
Jan 27, 04, 9:22 am
I don't have award guard and already have my ff travel planned through May. I usually plan my leisure trips 331 days out.

Is it better to have miles that may become useless or ticket stock that becomes useless.

Will you be booking ff space after May and hope for the best?

sfeinberg
Jan 27, 04, 9:26 am
I'm sitting on mine. I do hope they'll make it, but we need to be realistic here.. US is in trouble..I may cash out, but I want to see what others do...

silverpie
Jan 27, 04, 9:49 am
As mentioned before, I'm going ahead and burning for awards I know I'm going to try for anyway (eg Alaska), while continuing to earn on routine trips (eg Kansas City).

rove312
Jan 27, 04, 9:49 am
Does it make any sense to use 25,000 miles for a trip that can be bought for $200? I haven't had occasion to fly US since Oct. 2001.

TravelScholar
Jan 27, 04, 10:01 am
I've debated about this quite a bit, and I think my approach is still going to be to earn on US and pretend like nothing's going on.

Right now, I have two trips planned through the end of March, and about 40K in the bank. I do have Award Guard coverage, so I figure if the worst happens, I'll probably be able to cash in a biz ticket to Europe through Award Guard and get another airline to match my former status on US.

My biggest concern is that I've got two biz class award tickets to Australia booked with US miles for my honeymoon in August. If US does disappear, then I'm pretty sure that would ruin our plans. http://www.flyertalk.com/forum/frown.gif

MileKing
Jan 27, 04, 10:15 am
I believe that using the miles for an award ticket on a carrier other than US Air is the safest strategy at the moment. Booking award tickets for trips <60 days out on US is probably OK too.

The riskiest strategy has to be booking US award tickets that are far in the future. If US goes under while holding those it is doubtful another carrier will honor them and I wouldn't count on getting anything back from another carrier, even if they were to pick-up the Dividend Miles program. Holding the miles is risky as well, but maybe the only solution for those without vacation time.

Burning the miles on low fare flights you would normally pay for is an option and at least nets you something, although it may be a huge devaluation. Still something is better than nothing.

I'll say one thing, Award Guard will clearly be put to the test if US goes under. Randy is probably very scared right now. It's not clear to me that the program has the resources to support such a failure. And I would be very surprised given the state of the industry if any other airline offers to take over the Dividend Miles program.

ClueByFour
Jan 27, 04, 10:49 am
Burning almost as fast as I earn 'em.

Because I fly across the pond a lot (and went thru many, many SWUs and companion certs last year), I now have to support my transatlantic upgrade habit with miles.

Other than that, hovering around 150k. If things look bad quickly, I'll book a biz trip somewhere nice on UA in a hurry.

------------------
Don't feed the trolls.

SS255
Jan 27, 04, 10:49 am
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by MileKing:

And I would be very surprised given the state of the industry if any other airline offers to take over the Dividend Miles program.</font>


Maybe I'm just in denial because I'm sitting on 260,000 miles with 3 more trips booked through April, but I'm not worried about losing my miles. Any airline which acquires the DM program will have a captive audience. I don't foresee the capacity controls changing, so while it may be more difficult to redeem miles on the acquiring carrier, it's the lesser of two evils.

marlin
Jan 27, 04, 11:07 am
Mileking
Do I understand you think sitting on the miles would be more advantageous than say booking something on UA (using our US Air miles)331 days out?

Understand no one thinks booking US that far out would be wise. Thanks for all the discussion.

TravelScholar
Jan 27, 04, 11:14 am
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by marlin:
Mileking
Do I understand you think sitting on the miles would be more advantageous than say booking something on UA (using our US Air miles)331 days out?

Understand no one thinks booking US that far out would be wise. Thanks for all the discussion.</font>

I was always under the impression that, even if you booked on another carrier, if you booked with US miles and US goes away, then you're out of luck just as much as you would be with miles or with a ticket on US metal.

Am I wrong? If so, then maybe my Australia trip would have a glimmer of hope, even if US goes down.

sassamanlaw
Jan 27, 04, 11:42 am
I’ve depleted over 200k miles for trips in February and May and I’m now down to 55k which is the lowest total I’ve had in years. I’ll still fly U.S. but I’ll put all my miles in my United account.

MileKing
Jan 27, 04, 11:53 am
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by marlin:
Mileking
Do I understand you think sitting on the miles would be more advantageous than say booking something on UA (using our US Air miles)331 days out?

Understand no one thinks booking US that far out would be wise. Thanks for all the discussion.</font>

NO, that is not what I think or what I said. Booking on another carrier would seem to be a better alternative.

For TravelScholar, it is uncertain whether another carrier will honor an award ticket booked on that carrier with US miles. My own personal view is it's likely that they will. You may be better off with paper tickets rather than an e-ticket in that situation.

NJUPINTHEAIR
Jan 27, 04, 11:59 am
TravelScholar:


This question already has been debated and although there is no definitive answer, you should read the following:

http://www.flyertalk.com/forum/Forum51/HTML/006531.html

By the way, I received my paper e-tix for my United flight from USAir with USAir's imprint.

So, what did I do? I just got the United locator number for my award flight and input it into United's Any Itinerary system and printed out my tix on United paper stock with nary a USAir logo to be found.

It works for me, and as far as I am concerned, it is now a United Tix, that has been validly paid for already with my Didvidend Miles.

Final point. I am amazed at how so many smart people are in denial over this. I have read that one FTer has stated that the Dividend Miles program is USAir's best revenue generator. If so, that is really sad, when the selling of miles on cents on the dollar is your best resource.

In any event, why do these individuals think that the Dividend Miles program will be sold to someon who would want to shoulder the liabilites of that program? After all, past practices are no guarantee of the future, especially in this competitive environement.

Can any of you who take this position kindly explain to me, what a company gains by taking over such a program with its liabilites and in return for what?

If you are talking about anothe airline, they already have a loyal customer base -- with outstanding miles -- and if USAirways goes bye bye, then some of those customers are up for grabs anyway, but you are not saddled with any liabilites that you would owe to them if your took over Dividend Miles.

Moreover, if Pitt is a pit, and Philly has Southwest ready to invade, why are you so sure that those customers won't just burn off their "newly safe" miles, and then switch their loyalty?

This type of thinking seems to me to be quite dogmatic, and not in keeping with the realities that are swirling around's one's ahead at the present time.

My simple advice: USE IT OR LOSE IT!

PHLbuddy
Jan 27, 04, 12:21 pm
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by NJUPINTHEAIR:
TravelScholar:
...By the way, I received my paper e-tix for my United flight from USAir with USAir's imprint.

So, what did I do? I just got the United locator number for my award flight and input it into United's Any Itinerary system and printed out my tix on [b]United paper stock with nary a USAir logo to be found...</font>
I am interested in learning more about this. Do you mean you simply printed out your e-ticket itinerary? Or tickets with boarding cards? I just booked a UA ticket to Argentina in Business using US Miles and would love to distance myself from US as much as possible.

MileKing
Jan 27, 04, 12:49 pm
NJUPINTHEAIR, I'm with you regarding Dividend Miles. No other carrier is going to purchase the program (or honor the miles) if US goes under. In the past, when things were much better for the airlines, this may have been the case. With things the way they are now, I just don't see it happening. Those miles will be gone forever.

geo1005
Jan 27, 04, 1:05 pm
I disagree. When/If there is a fire sale at US, at some point the cost of aquiring the DM program will be worth it for one of the majors.

Arrzee
Jan 27, 04, 1:24 pm
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by NJUPINTHEAIR:
&lt;snip&gt;

So, what did I do? I just got the United locator number for my award flight and input it into United's Any Itinerary system and printed out my tix on United paper stock with nary a USAir logo to be found.

It works for me, and as far as I am concerned, it is now a United Tix, that has been validly paid for already with my Didvidend Miles.
&lt;snip&gt;
</font>

The paper might say United on it, but if the ticket number starts with 037 instead of 016 (which I suspect it does), you have a ticket issued on US Airways stock.

By the way, I'm curious to know how you were able to pull your record in United's website. Was your MileagePlus number associated with the tix? I can't seem to find any option that allows me to simply enter a UA confirmation number to pull my itinerary... it first wants my Mileage Plus number (which it won't have, since my I use my Dividend Miles number instead).



[This message has been edited by Arrzee (edited Jan 27, 2004).]

Lindyhopper
Jan 27, 04, 1:47 pm
Could someone please post a link to Award Guard? I cant seem to find one in a search.
Thanks.

Morrissey
Jan 27, 04, 2:04 pm
If I were a US flyer, I would definitely book a nice trip on UA for departure within the next month or two. Sometimes UA opens up hard to get seats for awards close to departure. Last March, when I thought UA was going to go under, I was able to score a business class ticket with my UA miles to Sydney just three weeks before departure...food for thought!

NJUPINTHEAIR
Jan 27, 04, 2:15 pm
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by geo1005:


I disagree. When/If there is a fire sale at US, at some point the cost of aquiring the DM program will be worth it for one of the majors.</font>

What proof do you have to back up this statement and just why will it be worth it for the other carriers to do this?

With all due respect, your saying this will not make this happen, as much as you or I, might wish it to be.

With respect to the other questions, about a week later, I contacted United and gave them the details of the flight of my award travel and the days, names, etc.

They were able to locate it in their system and then they gave me their confrim number.

I input the number and voila it now appears under the all other itineraries of their system.

It is true that my tix starts with 037 -- therefore I guess it can be considered a USAir tix.

However, I printed out the electronic receipt and itinerary from the UNITED site, and now I have a nice United Airlines logo on the document that is indicated for reference only. It states:

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">E-Ticket smReceipt and Itinerary

YOUR ELECTRONIC TICKET WAS ISSUED


This Document is for reference only
Your electronic airline ticket is stored in our computer system.
As with all airline tickets, your electronic ticket is not transferable.
Thank you for choosing United Airlines </font>

It goes on to note that this document and the credit card that I used to purachse the tix --$5.00 for the security fee -- will allow me to board.

At least for me, the above taken with my payment of the security fee and the fact that this reservation is confirmed in United's own computer system is sufficient for me to feel comfortable that I can argue that I have a valid and enforeceable contract and that United has accepted this bargain, whether or not they have been paid my USAir for the tix or not, as of yet.

They say it is a valid reservation stored into their system, that I cannot transfer it to anyone else, and I have paid some $$ towards its use, myself.

If legally untested, it still IMHO is a far better alternative than sticking one's head in the sand and saying everything will come out well in the end, or relying on a clause in an omnibus bill that has not been tested -- AFAIK -- by the DOT/FAA, or construed as enforecable by the courts.

The above is not a legal opinion, nor am I providing any legal advice, but just what I am doing for myself. I encourage all of you to do as you see fit.

Good Luck!



[This message has been edited by NJUPINTHEAIR (edited Jan 27, 2004).]

PHLbuddy
Jan 27, 04, 2:22 pm
I have the same problem as Arzee...NJUp are you using the "my itineraries" function at united.com, or some other site?

NJUPINTHEAIR
Jan 27, 04, 2:35 pm
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by PHLbuddy:

I have the same problem as Arzee...NJUp are you using the "my itineraries" function at united.com, or some other site?</font>

Yes. I chose that and then the one on the left side of the page:

<font face="Verdana, Arial, Helvetica, sans-serif" size="2"> All United Itineraries


• View all United flights regardless of where you booked them
• Check seat assignments
• Check for schedule changes
• Check for upgrades
• View hotel and car rental reservations included in your United itinerary
• View paper and electronic ticket itineraries </font>

I do have a United FF number and perhaps that makes a difference. I signed in first before accessing that.

If you don't have one, well that is easy to remedy. I think you can sign up online and get some bonuse points to boot!

In this environment, if you are flying USAir and not using it to top off any FF points, I would think it behoove you to get a United FF number in any event, and start earning Mileage Plus FF miles.

Although nothing is certain, I think it far more likely that United or MileagePlus will survive in some form or another as opposed to USAir. Sorry.

I hope the above helps.

geo1005
Jan 27, 04, 2:37 pm
NJUPINTHEAIR, I have exactly the same amount of proof to support my opinion that the Div. Miles Program will be absorbed by another major (if US goes under) as you do to support your feeling that the program will vanish. That is to say - no proof at all.

I do speculate that at some point (if US goes into fire sale mode) that one of the majors will pick up the US Div. Mile program and capture that group of FF'ers.

[This message has been edited by geo1005 (edited Jan 27, 2004).]

NJUPINTHEAIR
Jan 27, 04, 2:50 pm
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by geo1005:

NJUPINTHEAIR, I have exactly the same amount of proof to support my opinion that the Div. Miles Program will be absorbed by another major (if US goes under) as you do to support your feeling that the program will vanish. That is to say - no proof at all.

I do speculate that at some point (if US goes into fire sale mode) that one of the majors will pick up the US Div. Mile program and capture that group of FF'ers.

[This message has been edited by geo1005 (edited Jan 27, 2004).]</font>


Well, I respect your opinion, but at least with my hypothesis -- and it is only that --should you be proven wrong, then you get SQUAT, whereas if I am proven wrong, then I get a flight, perhaps not the best bargain that I could have obtained -- but since my main airports are those in NYC -- it is a pain to get to PHL -- but at least I get something.

The day of reckoning for United I think is farther off than that for USAir, whatever day that may be, and it is far harder for me to comprehend the US allowing the number 2 airline going out of buisness than the number 7 airline, which is rapidly being invaded by discount carriers.

Finally, you say the other major airlines would pick this up for "pennies on the dollar." I don't believe that the DM miles program is valued in Dollars anymore for an individual, anyway. I believe it is in pennies. Therefore, why would a major airline want to incur the liabilites of $$ reward seats that they will pick up for pennies??

With SW invading, it is less hospitable for the majors in any event. The fact that AA picked up TWA may have been part of the deal of the asset sale, and as I have said before, it was a very different world out there.

If you are one of the high value flyers, why would a major want to buy the whole DM program just to get you. I would think that you would gravitate to them, as they would be a carrier that could transport you on your needs, and not the other way around.

I am no businessperson, but it seems to me that there is very little value for anyone to purchase the liabilites associated with the DM program.

TomBascom
Jan 27, 04, 2:59 pm
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by NJUPINTHEAIR:
Originally posted by geo1005:

I disagree. When/If there is a fire sale at US, at some point the cost of aquiring the DM program will be worth it for one of the majors.

--------------------------------------------------------------------------------

What proof do you have to back up this statement and just why will it be worth it for the other carriers to do this?

With all due respect, your saying this will not make this happen, as much as you or I, might wish it to be.
</font>

Geo answered the "proof" part so I'll take a crack at the "why". The "why" would presumably be twofold:

1) The cost of acquiring a customer is less when you can pick them up in bulk. Sure, some of them will defect and others will use you and abuse you but that will be factored into the price. The acquiring airline still comes out ahead with a known group of people and some fairly valuable data about their travel history. They get to save lots of money and even more time that would have otherwise gone into a marketing effort targetted at those customers.

2) The existing partner arrangements regarding things like the Dividend Miles Visa are quite valuable -- but only with the miles. Take away the miles and the relationship is worthless.

Inertia works -- the acquiring company knows that a smooth transition means they keep some percentage of those customers and the associated revenue streams.

As for the "liability" aspect of things: The liability isn't that great and is easily managed -- we may feel that the miles are "worth" around $0.02 each to usbut the airlines know that they really only cost them a fraction of that if we can even manage to redeem them -- the real liability is probably more like $0.001/mile and perhaps much less depending on how many miles they feel comfortable about condemning.

NJUPINTHEAIR
Jan 27, 04, 3:19 pm
TomBascom:

I appreciate your input and viewpoint. Would it not be easier for an existing airline to separate the wheat from the chaff, by stating publicly that DM high flyers can fax them their account status and they may comp them similar status and preserve their miles, as well?

I believe that KLM did this, and I don't think that any company is under any obligation to offer this "deal" to everyone, just those FFers who are road warriors.

Fair enought it may save geo and you, but it still seems to me an easier way to get the most desirable flyers -- if that is your intention -- at little to no cost.

I am not one of those, especially since my home base is NYC's airports, so for me, it makes sense to take the tix on United and run.

By the way, I just read that the Senate is moving closer to passing a bill that would have the effect of allowing United and some others to defer their upcoming pension payments until they reach a better state of health. If this does become the law -- and it still is a big if -- I think that United will emerge from Bankruptcy by no later than the 3rd Quarter of this year.

You pick up all wonderful stuff when you are married to a corporate bankruptcy specialist!

scirel
Jan 27, 04, 3:20 pm
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by NJUPINTHEAIR:
Final point. I am amazed at how so many smart people are in denial over this. I have read that one FTer has stated that the Dividend Miles program is USAir's best revenue generator. If so, that is really sad, when the selling of miles on cents on the dollar is your best resource.
</font>

I have read on several other threads that FF programs are the best money-making portions of many airline operations, and I tend to believe it. So this proposition isn't limited to US alone. Of course, the programs are only valuable if linked to a viable airline operation, because the main value of miles consists in the ability to use them for travel awards. So the problems that US continues to face devalues the Dividend Miles program as well. However, there definitely is some sort of a latent value there. Whether anyone thinks it's enough value -- in the form of customers and partnerships -- is anybody's guess.

TomBascom
Jan 27, 04, 3:27 pm
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by NJUPINTHEAIR:
TomBascom:

I appreciate your input and viewpoint. Would it not be easier for an existing airline to separate the wheat from the chaff, by stating publicly that DM high flyers can fax them their account status and they may comp them similar status and preserve their miles, as well?
</font>

Sure, they could do that. But they'd lose the partner program links. I'm guessing but I'd view that as a "last resort" strategy if they can't agree on price. Losing the partner tie-ins would be painful and they run the risk of losing more wheat than they gain be eliminating chaff. (Chaff doesn't really matter. Inactive fliers don't cost anything. Whereas active fliers that go somewhere else are a lost opportunity that you now have to entice through more costly channels.)

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">... I don't think that any company is under any obligation to offer this "deal" to everyone, just those FFers who are road warriors.</font>

Of course nobody is obligated but the Dividend Miles customer base is anchored in some very attractive demographics. I'd pick it up myself if the price was right http://www.flyertalk.com/forum/wink.gif


[This message has been edited by TomBascom (edited Jan 27, 2004).]

MileKing
Jan 27, 04, 3:44 pm
Partner program links? The other airlines already have their own links with some of the same partners as US, namely the hotels, car rental firms, and Idine. Most airlines also have existing credit card bank relationships, shopping program relationships, and telephone company relationships, although not necessarily the same as US's. I think you vastly overestimate the value of US's "relationships".

The Dividend Miles program is a huge liability for any potential acquirer. While the customer information is valuable, that information can be purchased separately without taking on the liability. And whether you acquire the entire program or just the customer information, you will need a marketing effort to convince customers to stay. There really is no scenario I can see where it would be beneficial for another carrier to assume Dividend Miles.

geo1005
Jan 27, 04, 3:44 pm
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by TomBascom:
I'd pick it up myself if the price was right http://www.flyertalk.com/forum/wink.gif</font>

**** Tom! Keep talking like that and you and I could go in the airline business and create the first LCC that serves decent vodka, green limes, and Milanos! http://www.flyertalk.com/forum/thumbsup.gif

http://www.flyertalk.com/forum/wink.gif

USFlyerUS
Jan 27, 04, 3:49 pm
Just remember the DM program is one of the few PROFITABLE parts of US! US earns much more in revenue, via the credit card, telecomm providers, rental cars, hotels, etc., than it takes to support the program.

TomBascom
Jan 27, 04, 3:57 pm
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by MileKing:
Partner program links? The other airlines already have their own links with some of the same partners as US, namely the hotels, car rental firms, and Idine. Most airlines also have existing credit card bank relationships, shopping program relationships, and telephone company relationships, although not necessarily the same as US's. I think you vastly overestimate the value of US's "relationships".</font>

It's possible (although I'll grant that it's unlikely) that the terms may be more favorable in some of US' deals -- remember tat Wolf arranged some very, very favorable deals back in the day.

But the real value is simply that it's an existing and ongoing business relationship. Requiring people to sign up for or register or whatever for your own arrangements means that you will inevitably lose quite a few of them. Acquiring the relatinship means that you keep them. That has value.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">The Dividend Miles program is a huge liability for any potential acquirer.</font>

Then why isn't it shown as a liability on the books?

Because it isn't a liability -- it's a net asset.

Perhaps I'm misunderstanding you but you appear to be making the argument that X miles in peoples Dividend Miles balance is some sort of a huge liability that nobody can afford which is simply untrue. It just doesn't represent all that much money.

TomBascom
Jan 27, 04, 4:01 pm
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by geo1005:
**** Tom! Keep talking like that and you and I could go in the airline business and create the first LCC that serves decent vodka, green limes, and Milanos! &lt;IMG SRC="http://www.flyertalk.com/forum/thumbsup.gif"&gt;
http://www.flyertalk.com/forum/wink.gif</font>

The thought has merit -- maybe we could get CPRich to contribute some miles towards acquiring a few startup aircraft? He ought to have enough for half a dozen A321s http://www.flyertalk.com/forum/wink.gif

NJUPINTHEAIR
Jan 27, 04, 4:05 pm
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by USFlyerUS:

Just remember the DM program is one of the few PROFITABLE parts of US! US earns much more in revenue, via the credit card, telecomm providers, rental cars, hotels, etc., than it takes to support the program.</font>

As I have said that is sad -- and telling.

However, to support the program, as MileKing has said, you have to have a viable product with which to entice those customers, and that is hemmoraging $$.

If you have no program to support the enticements then it is of no utility. Moreover, if you continue to try to obtain customers with a worthless pitch, you have fraud. Now, I am not saying that USAir is marketing a fraudulent program, far from it, as they are tyring to salvage the airline, but there is a point of diminishing returns.

Tom Bascom has eloquently stated his position, but I tend to agree with MileKing that those other partner relationships are vastly overstated in the current environment.

Although the doom and gloom scenario may not come to pass, if you value the frequent flyer miles as a form of currency -- which they presently are, then ask yourself this question:

Would it make sense if you were invested in the stock market, to leave all your assets in one stock, and a shaky one at that, or would it behoove you to diversify your account, by placing some of your currency in another stock, that although risky, has somewhat better prospects.

After all, suppose USAir does fold, and you are holding a United tix for a future date that United proclaims it will not honor. I guess under that circumstance, your miles would revert to the DM program, whatever its shape and form.

If, as Tom theorizes, the DM program is bought by someone, then you have not lost anything, and your miles will be picked up by the new owner.

If however, no one is there to capture the DM program, you at the very least have an argument that United must accept your reward ticket.

If nothing else, I don't see any downside with this "diversification" of your portfolio.

Comments welcome.

[This message has been edited by NJUPINTHEAIR (edited Jan 27, 2004).]

TomBascom
Jan 27, 04, 4:09 pm
Diversification makes perfect sense. But I wouldn't panic.

And to answer the thread topic http://www.flyertalk.com/forum/wink.gif

I've been burning miles for leisure, for last minute business travel and for unreimbursed business travel.

TomBascom
Jan 27, 04, 4:22 pm
To the question of "how great is the liability" -- from the 10k link in the other thread:

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">As of December 31, 2002 and 2001, Dividend Miles participants had accumulated mileage credits for approximately 7,011,000 awards and 6,817,000 awards, respectively. Because US Airways expects that some potential awards will never be redeemed, calculations of FTP liabilities are based on approximately 79% of total accumulated mileage credits. Mileage credits for Dividend Miles participants who have accumulated less than the minimum number of mileage credits necessary to claim an award and a portion of mileage credits of Dividend Miles participants who have excessive balances are excluded from calculations of FTP liabilities. The liability for the accumulated Dividend Miles was $90 million and $89 million as of December 31, 2002 and 2001, respectively. Incremental changes in FTP liabilities resulting from participants earning or redeeming mileage credits or changes in assumptions used for the related calculations are recorded as part of the regular review process.

The number of awards redeemed for free travel during the years ending December 31, 2002, 2001 and 2000 was approximately 1.3 million, 1.1 million and 1.1 million, respectively, representing approximately 6% of US Airways’ RPMs in those years. These low percentages as well as the use of certain inventory management techniques (see above) minimize the displacement of revenue passengers by passengers traveling on Dividend Miles award tickets.
</font>

$90 million is less than the cost of a new plane.

It looks like about a little more than 25% of the "live" outstanding balance gets used every year ((7M * .79 ) / 1.3M).

The cost of a "free" trip works out to about $16. If you flew 10 paid trips to earn that free trip then they probably got $2,000 or so out of you in revenue.

The idea, of course, would be that an acquiring airline would honor your miles in order to hook you into the same behavior in their program.

Not a bad investment if you ask me -- $16 for a proven sucker and if they like what they see (or at least aren't offended by it) they'll spend $2,000 more to do it again.

[This message has been edited by TomBascom (edited Jan 27, 2004).]

TravelScholar
Jan 27, 04, 4:27 pm
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Lindyhopper:
Could someone please post a link to Award Guard? I cant seem to find one in a search.
Thanks.</font>

http://www.awardguard.com

However, new enrollments were suspended some time ago. All you can do is to view information about the program relevant to current enrollees.

Bourne
Jan 27, 04, 4:36 pm
I burned off all my miles (&gt;350K) by Dec 02. I was a CP for 2003 and did not fly a mile. http://www.flyertalk.com/forum/smile.gif

bowdenj
Jan 27, 04, 5:36 pm
I'm about ~160,000 or so I found the get together http://www.flyertalk.com/forum/Forum95/HTML/003825.html for London and am considering that trip coming up.

Highest balance was probably ~230,000 or so - I used some miles for Christmas / Thanksgiving trips.

AlecM
Jan 27, 04, 5:59 pm
Holding no miles - but holding two September standard Envoy tix to Paris.... wondering if there's any value in converting back to miles and booking UA instead.... would've really liked to fly Envoy.

Thoughts??

Alec in PVD

planeluvr
Jan 27, 04, 8:32 pm
I will not use my miles in a fire sale (over 500,000). I will continue to use them for upgrades to Europe and continue to accumulate additional miles and let the chips fall where they may.

The miles redemptions are capacity controlled (except for premium awards on U metal) so the liability to an airline is a seat that would have gone empty. If they don't want to award additional seats on a flight, they don't. Miles are not euros or pounds but a coupon that may be honored by other competitors if U goes out of business.

dingo
Jan 27, 04, 8:58 pm
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by planeluvr:
I will not use my miles in a fire sale (over 500,000). I will continue to use them for upgrades to Europe and continue to accumulate additional miles and let the chips fall where they may.

The miles redemptions are capacity controlled (except for premium awards on U metal) so the liability to an airline is a seat that would have gone empty. If they don't want to award additional seats on a flight, they don't. Miles are not euros or pounds but a coupon that may be honored by other competitors if U goes out of business. </font>

Pretty much sums up my feelings as well for my 700k miles...though I wish I didn't have that many now. http://www.flyertalk.com/forum/frown.gif

GadgetFreak
Jan 28, 04, 8:55 am
I have about 300K miles which I may drift down a bit but Im not going to do a real burn off. I was at around a million combined UA and UA and growing rapidly at the end of 2002. I decided to start using miles and bringing it down slowly. Im not happy at losing 300K but I would rather risk that than waste them. On the other hand I have or will have booked about 52K miles for the first quarter of this year and may add another 10K or so, maybe more to that. Exactly 1K of that is on US (RT shuttle). Most of the rest is on UA and some on AA. The initial reason was the bonuses. Now Im pretty glad it turned out that way.