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THE WALL STREET JOURNAL 2/1/02
Last month, Thomas Anantharaman nearly threw away a free vacation to Hawaii.
Just as he was set to toss his American Airlines frequent-flier statement in the trash, he suddenly noticed that the mileage requirement for a summer vacation he'd been planning jumped by 20,000 miles -- unless he booked soon. "Now I guess I'm doing it in the coming winter," says Mr. Anantharaman, a college professor in Madison, Wis.
Warning to frequent fliers: Start reading the fine print. After a post-Sept. 11 bonanza in mileage offers, airlines have quietly started imposing an array of new restrictions making life harder for frequent fliers. True, some carriers recently eliminated blackout dates. But others have changed the rules on everything from upgrade certificates to higher mileage requirements for free tickets, in some cases by as much as 25% more. During the past few weeks, Northwest Airlines and Continental Airlines raised the award levels for most domestic coach flights to 25,000 miles from 20,000. (And, unlike on most airlines, you're still stuck having to stay over on a Saturday night.)
"I feel betrayed by an airline I used to admire greatly," says Andy Hyde, a publishing executive from Nashville, Tenn., and a Continental platinum member.
Other signs of stinginess: Alaska Airlines, for one, is eliminating some free certificates travelers used for fare discounts and admission to airport lounges. Fliers aren't happy. Says Robert Winn, a corporate trainer in South Bend, Ind., who flew 69,000 miles on Alaska and its partner airlines last year, "It's made me rethink where my airline loyalty should lie."
Some Curious Timing
Doing anything to make it harder to fly would have been unthinkable just a few months ago: Passenger traffic was down 20% and airlines were desperate for passengers to fill seats. American, Delta and Alaska offered double miles for all trips flown. Northwest began promoting super-discount fares when used in combination with tiny numbers of miles.
Some experts find it curious airlines would reverse the generosity now, given the continued reluctance of many people to fly. "I don't know that this is the right time to be messing with your programs," says frequent-flier analyst Randy Petersen.
But other analysts say the post-Sept. 11 crisis has forced airlines to re-examine everything from their pricing structures to their route maps in an effort to return to profitability. Changing award programs to limit free flights, some experts say, is another part of that turnaround effort. "If you're going to do it, now is a good time," says Ray Neidl, an analyst at ABN Amro Securities.
What's more, though air travel is still off, it's slowly recovering. "In October, airlines were saying 'We're going to have empty seats anyhow, so let's give them away,' " says Goldman Sachs analyst Glenn Engel. But now, "you don't want to be giving away seats when supply and demand are already tight."
To be sure, this isn't the first time frequent fliers have complained about the difficulty of redeeming miles. In 2000, the miles earned by frequent fliers rose nearly 12%, while those they actually redeemed fell 2.5%, according to Webflyer.com. Internet sites are filled with postings from frequent travelers fuming over the recent moves -- Continental's new mileage requirement, for example, provoked a flood of messages on FlyerTalk.com.
But Northwest, Continental and American say they are trying to make things simpler for fliers, and are cutting discounts or provisions few people used anyway. Some of the discounts aren't needed from a "competitive standpoint," says Continental. And some changes clearly benefit travelers: Delta is temporarily offering double miles to give fliers a chance to beef up their accounts. US Airways says fliers have more opportunities for upgrades than in the past. And blackout dates are disappearing.
Loyalties Take Flight
Some fliers, however, contend that cutting those blackouts on a few peak travel days isn't much of a perk, particularly if you have to pony up more miles to fly most of the year now. "Those dates are going to be very hard to get free trips on anyway," says Pankaj Gupta, a computer executive in Bloomfield Hills, Mich., and frequent flier on Northwest.
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Higher Hurdles
As travelers slowly return to flying, airlines are tightening up their frequent-flier programs, making it tougher to earn and redeem miles. Below, what some major carriers are doing:
Airline / Change
Alaska - The old policy: Fly 10,000 miles, get 10,000 miles. Now it's fly 75,000 miles, get 50,000. And effective April 30, upgrades will cost 10,000 miles, up from 5,000.
American Starting June 30, the number of miles needed to get a pair of upper-tier tickets to Hawaii and Europe will increase by as much as 25%.
Continental - Miles required for a free ticket during most of the year (September through May) rises to 25,000 from 20,000. You have until June 1 to book under the old rules.
Delta - Want to stay on Delta's Platinum list? You'll need to fly 20,000 miles in the first quarter, up from 15,000 last year.
Northwest Miles required for a free trip from September through May will rise to 25,000, up from 20,000. New rate begins June 1.
US Airways - Travelers used to be able to book free upgrades months in advance; now they have to wait until a few days before departure.
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What to do? Act fast -- not all the restrictions take effect immediately. And some fliers are simply changing loyalties. Eager for coveted frequent fliers, some airlines will start you off as an "elite" flier just for promising your future business. That classification gives you preference in upgrades, among other benefits. So, fed up with the recent changes at Continental, Jon Posner bolted. The New York real-estate manager gave American proof of his "platinum" frequent-flier status with Continental -- and now has "gold" status on American. "I'm done with OnePass," he says of Continental's program.