Fort Worth Star-Telegram
Posted on Sat, Jan. 28, 2006

Wal-Mart will allow employees to keep frequent-flier miles

By TREBOR BANSTETTER
STAR-TELEGRAM STAFF WRITER

After decades of missing out on one of the most widespread business-travel perks, employees of Wal-Mart will finally get to keep their frequent-flier miles beginning this year.

Effective Feb. 1, the retail giant will change its long-standing policy of collecting miles earned by traveling employees and using them strictly for corporate trips, executives said. Wal-Mart will also allow employees to travel in first class or business class for the first time on certain flights.

"We feel like this enhances our ability to recruit and retain our associates and makes us a higher-level employer," said Dan Fogleman, spokesman for the Bentonville, Ark.-based company.

For 25 years, the vast majority of people who travel for business on most major airlines have been able to accumulate frequent-flier miles for their personal use. That was one of the key elements of the program when it was invented by Fort Worth-based American Airlines. The idea was that if the traveler personally received the benefit, he would make sure his corporate travel department always booked flights on that airline.

It succeeded far beyond American's expectations, and today millions of people are enrolled in frequent-flier programs with every major carrier. Airlines also partner with hotels, car-rental agencies, credit cards and a host of other businesses to distribute miles.

Business travelers are typically among those who benefit most, cashing in miles for free trips to Hawaii, Paris and other vacation spots.

But a select few companies, including Wal-Mart, Chrysler and Anheuser-Bush, were able to negotiate deals that allowed them to pool employee miles and use them for business travel, said Randy Petersen, who publishes a newsletter, Inside Flyer, that caters to corporate travelers. Those deals, although rarely publicized, were allowed because of the immense volume of travel those companies booked.

"Wal-Mart has been doing it this way for a long, long time," said Petersen, who managed Wal-Mart's frequent-flier program as an independent consultant in the late 1980s and early '90s. He estimates that at the time, the company was saving close to $1 million annually by using the miles for business travel.

The policy change means the airlines will have the opportunity to build loyalty among Wal-Mart's employees. Executives at American say that many travelers rank the carrier's frequent-flier plan as a top reason to fly the airline.

Fogleman said Wal-Mart hopes that some of its business travelers will use their miles for upgrades to first class.

"When they travel on a regular basis, this can help them arrive both physically and mentally prepared to do the job," he said.

Petersen said that with airfares at historically low levels, the cost of managing the pool of miles had likely become greater than the free travel benefits.

He also speculated that Wal-Mart got lucrative corporate discounts with major carriers last year, which allowed the company to finally turn the frequent-flier benefits over to employees.

American, Delta Air Lines and others renegotiated most of their corporate discounts last year after an industrywide reduction in business fares.
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Trebor Banstetter, (817) 390-7064 [email protected]