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WingNaPrayer

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April 20, 2004

Travel
The Shifting Rules
Of Flying Free
Internal American Airlines Memo Contradicts
Wisdom on When Is Best Time to Cash In Miles


By RON LIEBER
Staff Reporter of THE WALL STREET JOURNAL


An internal American Airlines memorandum is raising questions about one of the most basic tenets of conventional wisdom when it comes to redeeming frequent-flier miles.

Most travelers have always assumed that even on popular flights, airlines set aside at least one or two seats that can be snagged using a basic allotment of miles. But the memo -- written by the airline's training department for its reservations agents -- acknowledges that some domestic flights don't have a single 25,000 mile seat available far in advance. This is true even if a flight is entirely empty.

The memo also appears to debunk a strategy long used by miles aficionados: booking when flights are first loaded into the computer system, which is generally about 11 months ahead of departure. "While it is okay to advise our customers that we load availability 331 days in advance, please do not suggest this as the time to book AAdvantage award travel," the memo reads.

The memo also augurs potentially bad news for people counting on miles to get to, say, Europe in summer or Hawaii in winter. Seats are "not likely to become available on weekends, holidays, special events or prime vacation spots (i.e. Orlando and Las Vegas)," it says.

The upshot is that while booking early never hurts -- since some flights may have free seats from the outset -- it's no guarantee of availability.

The memo was posted recently on FlyerTalk.com, a chat site for frequent travelers, where it caused considerable angst among some members. Dennis Cary, president of American Airlines' frequent-flier program, says miles collectors shouldn't worry. "This clearly wasn't intended for public consumption," he says, adding that some of the facts were "overstated." American, with over 45 million frequent fliers, has the industry's largest loyalty program.

Mr. Cary says American, an AMR Corp. unit, isn't trying to make its program more restrictive. In fact, starting today, American customers who have booked free tickets will be able to adjust their flight dates and times without having to pay the usual $100 change fee. Some other airlines don't charge a fee under many circumstances. (Fliers usually still have to pay, however, if they want to change the origin or destination of their free flight.) Mr. Cary adds that the airline is re-evaluating its "entire fee structure" -- including an unpopular fee it now charges fliers who trade in miles for flights within a few weeks of their travel date.

Airlines can hardly afford to alienate frequent fliers by making it harder to cash in miles. For one thing, robust miles programs are one of the few perks distinguishing big airlines from their discount rivals. In addition, airlines need their miles programs for another reason: They sell them to other companies. The 8 or so biggest carriers take in roughly $2 billion a year by selling miles to everyone from credit-card issuers, to hotels, and even mortgage companies, which then turn around and offer those miles to their own miles-mad customers as a loyalty-inducing perk.

Tips for Booking Free Tickets
Sometimes you're better off buying a ticket and using frequent-flier miles to get an upgrade.
It pays to repeatedly try to book your miles seat, because airlines may make more seats available as the departure date approaches.
A travel agent that specializes in booking free seats, like awardplanner. com, charges a set fee and can help make the freebie happen.

The number of frequent-flier miles in circulation -- about 10 trillion or so -- represents a major business dilemma for the airlines. At a time when most carriers are strapped for cash, people using miles to "pay" for flights account for about 7.9% of total revenue-passenger miles (a standard industry measure that represents one paying passenger carried one mile), according to consulting firm IdeaWorks Co.

But those data can be misleading. For one thing, it doesn't measure how many people may have spent weeks or months trying to use their miles but couldn't.

For travelers, the memo opens a window on the airlines' awkward behind-the-scenes balancing act to keep travelers' expectations in check. It also points to the increasing difficulty the carriers have in answering two relatively simple customer questions: When is the best time to book free seats, and what are the tricks to getting the most popular dates and destinations?

For travelers, the easiest way to a free seat is also the most painful one: One way to guarantee a booking with miles is to shell out twice the miles for it -- in other words, pay 50,000 miles instead of the usual 25,000. Every major airline now lets travelers book seats that aren't otherwise available to miles-redeemers by paying roughly double the miles. For instance, if you want to go to Orlando on American for spring break, you probably won't be able to get a seat for 25,000 miles. But American will give you one for 50,000 miles.

However, this isn't very popular with some travelers. "Let's face it, it's kind of a covert, unpublished increase in the price of frequent-flier awards," says Tim Winship, a former airline employee who runs the Web site frequentflier.com

Mr. Cary of American says the airline doesn't intend to make 50,000 miles the new "baseline price." Mr. Cary also adds that the airline has no plans right now to raise that 25,000 mile price to 30,000 miles.

US Airways says just 10 to 15% of people end up paying 50,000 miles for a domestic coach award instead of 25,000. Delta reports similar figures, and American says its numbers are the same or better. United and Northwest decline to disclose how many people end up paying 50,000 miles to get the seats they want.

Mr. Cary of American says plenty of seats are still available to travelers who don't want to pay double the mileage to guarantee a spot. He notes that 92% of American's flights to Europe this summer already have at least one passenger booked on them using the lowest possible redemption level. Mr. Cary also says that the number of seats available this year at the 25,000-mile level has grown almost twice as fast as American's overall capacity growth during the same time period.

Another option for travelers hoping to get a free seat with the minimum outlay of miles is to keep looking for free seats as the departure date gets closer. That's because airlines often open up additional free seats on flights that aren't expected to sell out. Carriers these days are making heavy use of computers to help them predict demand. As a result, free seats can fly in and out of the reservations system at any time up to the day of departure.

Write to Ron Lieber at ron.lieber@wsj.com
 

Garfield1966

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Apr 7, 2003
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The only people who did not know this are the casual fliers. Any business person knows full we that an airline is not going to give away free seats on it’s most profitable routes or during the most profitable times of the year. Especially on that is in financial trouble.
 

Speedbird

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Aug 20, 2002
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www.usaviation.com
No surprise here about this revelation. While it may be true that AA's most savvy FFs understand how to navigate the purposely complex process of redeeming their miles; its those new "casual" FFs who (supposedly) have recently signed up in droves to take advantage of AA's recent 2 for 1 promotion who will get left holding the bag, and come away from this experience feeling cheated by AA's perceived underhanded procedures. While AA may come out ahead over the short-term in pulling away passengers from jetBlue and other LCCs; in the long run this kind of negative perception by "casual" AA passengers will only backfire and serve to strengthen the LCC's (like jetBlue), which look forward to such legacy carrier blunders as another opportunity to win over those same passengers with their brand of superior customer service.

I guess AA management still doesn't get it when it comes to understanding why LCCs like jetBlue have such strong brand loyalty in an otherwise commodity-driven market.
 

flyhigh

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Jan 4, 2003
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Speedbird,

The problem is that the LCC's do this as well. All carriers manage inventory to generate the maximum revenue. Giving out free seats when there is surplus demand for paid seats doesn't make sense, so why would they do it. What this memo really do is prevent res agents from setting people up to believe something that isn't true. If res agents kept telling people to call early out, but they still couldn't get a seat, then the members get mad. If you don't make promises of that nature, you don't get beat up for doing what any business would do...
 

mrman

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Sep 10, 2002
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flyhigh said:
Speedbird,

The problem is that the LCC's do this as well. All carriers manage inventory to generate the maximum revenue. Giving out free seats when there is surplus demand for paid seats doesn't make sense, so why would they do it. What this memo really do is prevent res agents from setting people up to believe something that isn't true. If res agents kept telling people to call early out, but they still couldn't get a seat, then the members get mad. If you don't make promises of that nature, you don't get beat up for doing what any business would do...
HUh,

On WN, With the exception of about 10 blackout dates if there is an empty WN seat the award seat is yours. In theory a flight would go out with all award seats.
This is one of the huge advantages of WN frequent flyer program. One can pretty much get an award on any flight as long as you book before it is sold out
 

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