Opening Remarks – January, 21 2010

Opening Remarks – January, 21 2010

Government-run frequent flyer programs

Typically, I’m all for intervention from others if there is a reasonable need for oversight to protect the rights of frequent flyers. I balance the need of oversight with what type of oversight, and of course, if the need actually exists. In December we reported that Charles Schumer, the U.S. Senator from the state of New York is urging the Department of Transportation (DOT) to, for the first time, regulate the frequent flyer programs of commercial airlines.

Whoa there Senator. Flush with the idea of the government getting involved in a national health plan doesn’t mean the government should also become involved in frequent flyer programs.

Schumer said that New York travelers and flyers all across the county have lost tens of millions of miles (actually hundreds of billions) because they have been rescinded by airlines and credit card companies. Schumer said members of these programs are not receiving sufficient notification regarding pending terminations of their frequent flyer accounts or the miles they have accumulated. Flyers have found that their accounts can be terminated and miles can be deemed cancelled or expired with seemingly little to no advance notice from an airline.

With all due respect to his office, I agree but also disagree. I have long railed against various programs who do a very poor job of notification to their members. Although I believe it is the responsibility of the member to manage their miles and points, the programs sometimes fail to properly have this information available to members. Some do a great job of making this information available within the online accounts and others do such a poor job that I’d almost be happy for the government to specifically pass legislation with their name on it.

There is something within the scope of Senator Schumer’s interest that I just can’t be a party to, no matter the extent I believe in flyers rights. That is, his desire to have the DOT draw up new rules to set limits on when miles can be rescinded and accounts can be closed. Where were these guys in 1988 when the expiration of miles was introduced? For the record, we got expiring miles, but we also got at that time … a 20,000-mile coach award which was later raised to the current standard saver award of 25,000 miles. The average member of these programs has actually benefited from expiring miles because without them, it is likely that the standard coach saver award would be at 40,000 miles. Some might argue that is where it is at today, but frankly with some 82 percent of domestic awards being still redeemed at 25,000 miles, let’s send someone back to math class.

As for his desire to draw up new rules for notification to members, frankly InsideFlyer will take the lead here and out those that do a very poor job in making this information available to their members. Hopefully, with a little prodding, we can get this done by the programs without any legislation. It certainly is difficult for me to go against having better rules for frequent flyers put in place, but I can’t help feeling that the problem of expiring miles is a combination of members really not interested in their “loyalty” programs and of course a number of airline and hotel programs that simply aren’t up to the task of great customer service.

For me, British Airways Executive Club ranks as the best example of this problem. I know exactly what I am looking for when managing my expiring miles. However, their reference to a “card expiry date” is not the same as mileage expiration date. After some time spent on their Web site and my personal account, I could still not detect a simple display of when my current Executive Club miles expire. And in the research, I contacted the service center about this, and here’s the answer:

Dear Randy,

Thank you for contacting us about the expiry of your BA Miles. Your membership year expiry date is different from the expiry date printed on your membership card to allow us time, once we know what tier you have earned, to send out a new card before your old one expires. The membership year is the twelve-month period from your joining or renewal date. Detailed information can be found at:

The Tier Points are reset to zero at the end of this period, however the BA Miles continue to accumulate. A new membership year will automatically begin at the end of the current one. The BA Miles will remain on your account for a period of 36 months. However, every time an eligible activity is recorded on your account, the expiry date of your mileage will change.

Our records show that your last transaction was in December 2008. As long as you continue to earn or redeem BA Miles at least once every 36 months, your BA Miles will not expire. Your account will remain active by any form of mileage activity. I hope this information is useful to you.
Sufiya, British Airways Executive Club

This is the problem for members. Rather than display the information of when my BA miles might expire in my member account, I was required to actually have to contact them and read through all the information about Tier points and the membership year. All I wanted to know was when my BA miles were to expire … and I still had to figure it out myself. Why not say, “Randy, your current BA miles expire in December 2011?” Really, why should I have to contact the customer service center to find this information out? Apparently it is displayed somewhere, just not for the members to find. This is an example of what is wrong, and of course we agree with Senator Schumer regarding this.

But legislation is not the answer. InsideFlyer has audited all the major programs for this information and we now have a report card. I’m going to personally follow up with each program that does not rate a thumbs up in our cover story and see if we can’t get this done for the benefit of the members. If the industry doesn’t want to play along on this, then I’ll have no pity for them when the government-run program arrives on their doorstep.

In closing, the elephant in the room not mentioned by the good Senator is that frankly most of the problem with expiring miles lies with the member—the member who does not pay attention and manage his programs and wants to stand in line for the handout that Senator Schumer suggests. Sorry, that’s not the answer.

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