Frequent Flyer Basics

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Frequent Flyer Basics

Frequent flyer programs began when American Airlines created the AAdvantage program in May 1981. Today, nearly all major airlines and hotel chains offer awards for flights and hotel stays. Car rental agencies, charge card programs, and a host of other companies have become involved in trying to capture business from frequent business and leisure travelers as well.

Essentially, frequent flyer programs award consumers with miles and points for the purchase of products or services. Once the consumer has earned a sufficient number of miles or points, he or she may exchange the miles or points for a commodity such as a free airline ticket or hotel stay. A wide variety of frequent flyer awards are available, including flight upgrades from coach to business or first class, free car rentals, cruises, merchandise, and complete vacation packages. Each frequent flyer program has its own unique award schedule.

Depending upon the program, miles and points can be earned with airline flights, hotel stays, car rentals, credit card purchases, long-distance telephone calls, and various other sources.

There are essentially two types of members to frequent flyer programs: the frequent business traveler, for which these programs were first introduced, and the "infrequent" flyer who accumulates miles through the use of frequent flyer credit cards and other frequent flyer program partners.

Frequent flyer miles are typically subject to expiration policies that require regular account activity. The type of activity varies from program to program, but generally any activity, including redeeming for an award or use of a partner, will keep your frequent flyer miles active. When the mileage total reaches a certain amount, you can "redeem" them for an award, usually free travel.

Airline Frequent Flyer Programs

The common currency among airline frequent flyer programs is miles; however, some programs still award points or credits rather than miles. Most airline programs award miles based upon the actual miles flown. For example, the flight distance between Los Angeles and Dallas is 1,235 miles; therefore, a traveler flying roundtrip between Los Angeles and Dallas will earn 2,470 miles. Once enough frequent flyer miles are earned, they may be exchanged for an award from the program's award chart.

More Ways to Earn Miles

Minimum Miles

Some programs award minimum mileage regardless of the actual miles flown. For example, on flights that are 500 miles or less, some airlines always award 500 miles.

Class-of-Service Bonuses

With some airline programs, when a first-class ticket is purchased, the traveler will receive a bonus equal to 50 percent of the actual miles flown. Class-of-service bonuses may also be awarded for business-class travel.

Partner Offers

Airlines also award miles for hotel stays, car rentals, credit card purchases, long-distance telephone calls, flower purchases, etc. Organizations that award airline miles are referred to as partners of the airline program.

Hotel Frequent Guest Programs

Hotels have created programs of their own complete with their own earning structure and award schedules. The common currency among hotel programs is points. Generally, hotels award points based upon the dollar amount of room charges per stay. For example, guests might earn 10 points per $1 charged to the room. Eligible charges may include room rate, food and beverage, telephone, laundry, etc. Or, guests might earn points based upon the stay only. For example, the hotel may award 500 points per stay (regardless of whether the stay is one night or five nights).

Many hotel programs give guests the option of earning points valid for redemption in the hotel program OR miles valid for redemption in a frequent flyer program. A few hotel programs award both hotel points and frequent flyer miles (this is called double-dipping).

A flight in conjunction with the stay may be required by the airline or hotel in order for the stay to be eligible to earn miles.

Hotel program points can also be earned for partner car rentals and partner charge card purchases.

Hotel frequent guest programs vary greatly in both the manner in which points are earned and awarded, and the types of awards that are available.

Car Rental Programs

For frequent travelers, car rentals are known primarily as a source of airline or hotel miles or points. For example, members of frequent travel programs may earn 50 miles per rental. A flight or stay in conjunction with the rental may be required by the airline or hotel in order for the rental to be eligible to earn miles or points. A few car rental agencies do offer frequent renter programs of their own. Generally, the programs are quite simple. For example, one program awards travelers a free rental day after 12 rentals.

Credit Card Frequent Flyer Programs

The credit card programs award miles or points based upon purchases. There are two types of credit card programs: 1) Affinity credit cards: The program is directly connected to an airline or hotel program (thus "affinity") and frequent flyer miles are awarded per dollar spent, then deposited monthly into the member's frequent travel account. 2) Creidt cards that have a program in which they offer their own miles and points per dollar spent. Miles or points can be redeemed for miles or points in an airline or hotel program, or they can be redeemed for awards offered by the credit card program itself.

Some credit cards impose caps on the number of miles that can be earned annually. Other programs do not award miles until a minimum dollar amount has been charged to the card.

Partners

Airline and hotel programs have established a network of partners that award program miles or points for purchases from the partner.

Partnerships are an excellent way for someone who flies only occasionally to supplement his or her frequent travel account. A free flight award can be earned solely through the use of program partners. The proliferation of partnerships has made it much easier to earn free travel awards, particularly with programs with expiring miles or points.