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FREQUENT FLIERS GET EXTRA MILES WITH CREDIT CARDS : THE RULES CHANGED.

Byline: Keith Ervin The Seattle Times

When airlines invented the frequent-flier concept 16 years ago, they had customers such as Jered Cady in mind.

Cady travels 100,000 miles a year in his job for Timeline, a software developer based in Bellevue, Wash. He flies so frequently that he admits to sleeping better on planes than in his bed at home.

When Cady has a choice, he flies United Airlines, because its hubs provide convenient service to the cities he visits most often, such as Chicago; he went to Chicago 20 times last year. Both the airline and Cady benefit from his loyalty. He flew 95,000 miles on United and earned 300,000 frequent-flier miles.

United gave him a large number of bonus miles, and he boosted the amount further by charging $5,000 to $6,000 of various expenses each month to his United Plus Visa card and by choosing hotels and car-rental companies that offer United miles.

``I stick with United, Hertz and just two or three hotel groups and my United Plus Gold Visa. Everything focuses on United,'' he said.

Cady got 10 free round-trip tickets out of the arrangement last year: four for his daughter attending college in Houston, two for his son in Hawaii, two for him to visit Houston and Hawaii, and two for his girlfriend and him to fly first-class to Vermont.

Many companies, such as Timeline, allow employees to keep frequent-flier miles earned on business trips. Others, including Boeing, treat those miles as company property. A few give employees the option of keeping miles for themselves or selling them back to the company at a discount.

It doesn't take as many miles as it once did to qualify for a free trip. And, in a more fundamental change in the rules of the game, you don't even have to fly to earn frequent-flier miles these days.

The biggest change in those programs is the profusion of ways to earn mileage credit without leaving the ground. It all started with credit cards that give one frequent-flier mile for each dollar charged to the card. You can earn miles by charging groceries, a down payment on a car, your child's college tuition or business expenses.

Now airlines and other companies are forming strategic alliances that offer frequent-flier miles for a multitude of merchandise. You can earn mileage by making long-distance calls, checking into a motel, renting a car, wiring flowers and dining out. A few airlines are giving mileage for mortgage interest payments, the principal on a home purchase and deposits in mutual funds.

Shopping centers in several states pumped up 1996 holiday sales by giving away air miles with purchases. Frequent-flier miles have become a kind of currency and a ubiquitous promotional tool.

Americans are now earning about as many miles from credit-card use and other purchases from companies allied with airlines as from actual air miles, not counting the 50 percent mileage bonus given to the most frequent fliers.

Restaurants and other retailers who use frequent-flier miles to lure customers typically pay the airline 2 cents a mile. It represents a significant new source of revenue for the airlines, which by Randy Petersen's estimate took in $1 billion last year from those arrangements. Petersen publishes the Inside Flyer magazine and is the author of ``The Official Frequent Flyer Guidebook.''

Rewards are nice

Stuart Dautoff, a Seattle therapist, uses his Alaska Airlines MasterCard to supplement his air miles. His family has used frequent-flier miles to help pay for two trips to Asia and one trip to Europe since 1991. ``To me, it's a game, and it's a game that has nice rewards,'' he said.

The rewards are so enticing and the miles so easy to earn that 40 million Americans are enrolled in frequent-flier programs. The average member is enrolled in 3.7 different programs, Petersen said.

Yet many consumers have become so frustrated with the restrictions on the use of frequent-flier miles that they consider them almost worthless. A limited number of seats per flight are reserved for tickets purchased with frequent-flier miles rather than cash. And then there are those pesky ``blackouts'' at busy times when no seats are reserved for frequent fliers.

Les Dicks, who markets high-speed photofinishing equipment for Seattle-based Express Log, was a loyal United Airlines frequent flier until recently. He took one business trip and one family excursion with his large stockpile of accumulated miles but found it difficult to schedule trips around the blackout dates that coincide with many school holidays.

``You just don't have that flexibility with kids in school,'' he said.

The last straw for Dicks came last summer when he found his miles beginning to expire before he could use them. He no longer chooses United in preference to other airlines.

Frequent-flier program enthusiasts say it's really not so bad. By planning around blackout periods, by booking flights far in advance and sometimes by booking at the last minute, they usually can get where they want. And there's always the option of avoiding blackouts and seat restrictions altogether by choosing to spend 40,000 frequent-flier miles for a domestic trip rather than the usual 20,000 to 25,000.

Petersen said travelers took 13,000 free trips last year.

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Photo

Photo: Business traveler Jered Cady of Bellevue, Wash., gets frequent-flier credit for about 100,000 airline miles on the job each year, and he uses other programs to gain still more free trips.

Knight-Ridder Tribune Photo Service
COPYRIGHT 1997 Daily News
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1997, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:BUSINESS
Publication:Daily News (Los Angeles, CA)
Geographic Code:1USA
Date:Mar 3, 1997
Words:917
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