"Free" Awards?

"Free" Awards?

And now for another shock — awards may never be as free as they once were. As you know, as of Feb. 1 the federal government of the United States has decided to take control of the security procedures at all U.S. airports. To fund the expense of the new security measures, the government now assesses a fee of $2.50 per segment on all domestic airline tickets (up to a maximum of $10 per ticket), which will be collected when making reservations on the phone, online or, in some cases, at the airport. While some airlines may absorb this new fee for their elite members, the reality is that all members of frequent flyer programs will have to get used to the fact that “free” is no longer “free.”

For many years, select airports have charged PFC’s (Passenger Facility Charges) on flights to/from those airports, but members of frequent flyer programs have generally been exempt from these charges, or have had the PFCs paid by the airlines on their behalf. It doesn’t look like that will be the case this time. As you know, some members of frequent flyer programs already pay the federal excise tax on earning frequent flyer miles when using partners such as car rentals, telephone and others who pass along those fees.

Pay to earn, pay to burn … the new American definition of “free.”

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