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The Guardian: Frequent flyer miles soar above sterling

The Guardian: Frequent flyer miles soar above sterling

Old Jan 8, 2005, 6:56 pm
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The Guardian: Frequent flyer miles soar above sterling

Frequent flyer miles soar above sterling

Andrew Clark, transport correspondent
Saturday January 8, 2005
The Guardian

The gold standard of sterling is long forgotten and now the supremacy of the greenback has been surpassed. The world has a new global currency - airline frequent flyer miles, which have a greater total value than dollars, euros, pounds or yen.

Doled out by airlines to seasoned travellers, they are intended to be redeemed for tickets as a reward for loyalty. But since their invention in 1981, their popularity has spawned its own economy of trading schemes, charitable donations, enthusiasts and scams.

By the end of 2004, almost 14 trillion frequent flyer miles had been accumulated worldwide, worth between 1p and 6p apiece.

According to a new analysis by The Economist magazine, the global stock is worth more than $700bn (£370bn), more than all the US dollar bills in circulation, and streets ahead of Britain's £42bn of notes and coins.

Once used exclusively by jet-setting business travellers, miles have become a regular currency among holidaymakers and long-distance commuters. More than 130 airlines issue them, handing out more than 14m free flights annually.

Canny collectors can swap their miles for hotel rooms, car rental, restaurant meals and even cruises. But arcane rules about privileges and redemption routinely cause confusion.

Alex McWhirter, consumer editor of Business Traveller magazine, said: "Frequent flyers often work unseasonal hours, spending a lot of time away from their family and friends. These are a compensation for that lifestyle."
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He says the enormous stock of unredeemed miles is partly a result of a growing reluctance among regular travellers to spend their free time in the air.

"A lot of people find they've had enough of travelling and decide to save them for a rainy day," said Mr McWhirter. In some cases, corporate executives wait until retirement and then splash out on round-the-world trips for their families.

So many different types of frequent flyer mile are in circulation that consultancies have sprung up in Europe and America devoted solely to helping people get the most of their portfolio.

Ravindra Bhagwanani, founder of Frankfurt-based Global Flight Management, said: "[Frequent flyer] miles are a game you have to play. If you want to play a game successfully, you need to know the rules."

To the uninitiated, redeeming miles can be frustrating. Often, airlines try to restrict their use to unpopular flights at the crack of dawn from out-of-town airports.

James Freemantle, of the Air Transport Users' Council, said a regular complaint from frustrated passengers was that even with a vast account of miles, flights are still not "free" because hefty taxes remain payable.

"We do get complaints from people who say they weren't expecting taxes," said Mr Freemantle. "Although the frequent flyers who belong to these schemes are often valuable customers and they're looked after pretty well by the airlines."

A close look at the rules can expose unbeatable deals. A civil engineer from California, David Phillips, became known as the "pudding guy" after calculating that an offer of frequent flyer miles with food at his local supermarket yielded a remarkable return. He spent $3,000 on 12,000 Healthy Choice chocolate desserts and earned $25,000 worth of free flights, enough to pay for travel for the rest of his life.

In the 1990s, British Airways customers briefly benefited from a loophole which allowed them to book flights and earn miles, but then cancel their journeys without penalty. The carrier has since become wise to the tactic.

Experts say that to get the best deals, it often makes sense to join the loyalty club of overseas airlines which have reciprocal agreements with local carriers.

The consumer magazine Holiday Which? found that on a return flight to New York, the best bonuses could be earned by flying on American Airlines but accumulating points on a loyalty card from the Brazilian airline Tam, or by travelling with Virgin Atlantic as a member of Air Jamaica's "Seventh Heaven" flyers' club.

But consultants point out that it makes sense to watch out for expiry - some points last for ever, while others lapse after a few years.

British Airways has 1.7m frequent flyers in its Executive Club and says "miles" are among the four biggest currencies used to purchase its flights.

A BA insider cautioned: "You can call them a currency but lot of our miles out there will have expired. A dollar won't expire."

Redeeming points

∑ Frequent flyer miles were born in May 1981, when American Airlines began the first mileage-based loyalty scheme, AAdvantage

∑ More than 120 million people belong to frequent flyer schemes worldwide. The record for the biggest individual account is just over 23m miles

∑ The first big legal battle was in 1986, when United Airlines tried to confiscate the Mileage Plus account of Howard Landau, dubbed "the man who flew too much". The case was settled out of court

∑ A standard British Airways account holder needs to make two economy-class return trips to New York in order to earn a one-way flight to Paris

∑ A London-based check-in clerk employed by Air Canada was jailed for nine months last year for fraudulently awarding 5m frequent flyer points, worth £33,000, to himself and his friends
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Old Jan 8, 2005, 8:49 pm
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I would like to know who the person who has the most FF miles-23 million-is, what he does, and on what airline?
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Old Jan 9, 2005, 3:57 am
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gee, what a great newspaper and article (not). Some Guardian guy reads the Economist and is inspired to write an article, he trawls FT and regurgitates much of what he read here and turned it into an article.
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Old Jan 9, 2005, 8:18 am
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Originally Posted by bursa
I would like to know who the person who has the most FF miles-23 million-is, what he does, and on what airline?
An old CEO of mine accumulated about a million per year on United, flying F-class all over the world with a travel secretary who constantly registered him for every promo out there. But he rarely spent any miles as he is worth hundreds of millions.
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Old Jan 9, 2005, 4:05 pm
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While Impressive that they are all on one airline, If I count what I've earned ans spent over the last 7-8 years, its probably about 7-8 million miles, with over 6.5 million in my accounts. Therefore if I were to continue for another 12-15 years, I would have topped this guy.

Then again, maybe I can take it easy in a couple of years and actually start really burning them.
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Old Feb 3, 2023, 9:18 pm
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Howard Landau

Howard Landau is my grandfather, obviously before 911, times were very different, he would make fake IDs with his and my late grandmothers names on them but with my fathers and my aunts faces on them and would collect the points. He is still a legend in our small town. Itís always so cool and funny to see his name brought up in random articles.
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Old Feb 4, 2023, 6:57 am
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We'll close this since an 18 year old thread is no longer completely relevant.

cblaisd, Moderator, Travel News
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