Frequent Flier Rewards: Change Is In The Air

12:39 PM, Dec 13, 2012   |    comments
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David Frisbie sometimes will pay extra for a roomier seat in coach. But he prefers to earn the loyalty points that can get him a free trip the old-fashioned way: based on the miles he flies rather than the dollars he spends.

"For the frequent traveler, loyalty ... is what ought to be rewarded," says Frisbie, a family counselor and author who lives in Del Mar, Calif., and flies at least twice a month. "The true value of a loyal frequent flier is far greater than whatever today's fare happens to be."

For frequent-flier programs, one of the airline industry's most popular perks, change is in the air.

Last year, Southwest, which carries more domestic passengers than any other airline, switched its loyalty program to one that awards points based on the fare a passenger pays rather than giving a credit for each flight. Virgin America and JetBlue similarly peg loyalty points to dollars spent rather than miles flown.

No legacy network carrier - United, Delta, American or US Airways - says it's planning to switch from the decades-old model that allows fliers to earn their way to a free trip based on the distance they fly. But some loyalty-program watchers believe it won't be long before a big network airline heads the way of some of their low-cost peers.

"I would suggest by this time next year there'll be at least one, if not more, of the major carriers that have adopted this kind of new normal among frequent-flier programs," says Randy Petersen, publisher of Inside Flyer magazine, which closely follows loyalty programs. "I think in five years we will have forgotten about the old system."

Awarding loyalty points based on ticket price would let airlines better reward passengers who pay more for their seats, contributing more to the carrier's bottom line, some airline officials and travel experts say. At a time when many miles are earned from activities other than flying, they say, an overall rewards program based on spending makes sense.

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