Do (which) companies use frequent flyer miles, earned via business travel, to save on travel?

Discussion in 'General Discussion | Miles/Points' started by stuartbb, Apr 26, 2011.  |  Print Topic

?

Was this document useful?

  1. Yes - Useful

    4 vote(s)
    44.4%
  2. No - Not useful

    5 vote(s)
    55.6%
  1. Do companies actually take ownership of frequent flyer miles, generated as a result of business travel, to reduce their future travel spend? If so, who are these companies and why aren't they visible? How is elite status for the flyer affected? Why don't more companies do the same? What about HR considerations?

    If the above questions are of interest, you can download a discussion document, within this thread, also available at http://www.box.net/shared/ynmua8h3li.

    I know it's an emotional and controversial subject, but I've "risked" posting this thread on MilePoint because I believe the culture here is based on respect, even if not all readers might agree with what's written.
     
    DonV.Smith likes this.
  2. DonV.Smith
    Original Member

    DonV.Smith Gold Member

    Messages:
    1,609
    Likes Received:
    7,467
    Status Points:
    4,900
    My father used to work for a government contractor, though the name is slipping my mind right now... They chose to keep miles /hotel points to subsidize future travel, or at least that was the advertised intent. As a result, he wouldn't gain any status - the way they were setup. Fortunately, his travel was more limited and/or drivable, so it didn't impact him as much as some of his colleagues.

    The company I work for, and a couple of others in the past, are very much of the mindset that what is earned is yours to use for personal use, along with the levels of status that may come with it, to be treated as a reward for loyalty as provided by the airline, hotel, etc of your choosing...
     
    viguera likes this.
  3. viguera
    Original Member

    viguera Gold Member

    Messages:
    4,737
    Likes Received:
    6,913
    Status Points:
    4,745
    I think a lot of companies operate that way, at least the large ones... but they use a single reservation system for all their employees for corporate travel, a couple of hotel chains at the most and corporate cards don't earn you anything -- the company uses that as leverage for savings.
     
    DonV.Smith likes this.
  4. DonV.Smith
    Original Member

    DonV.Smith Gold Member

    Messages:
    1,609
    Likes Received:
    7,467
    Status Points:
    4,900
    Most, and I do have a corporate card - which is nice. But I have the opportunity to leverage my corporate card as a points card and feed my personal accumulation of Amex points, too. Additionally, where it's recommended I use the Amex, I can use personal cards - I just have to be prepared to pay it off at the end of the month vs. having a little additional leeway for the Amex, with expense reimbursement in mind.

    That said, my company owns a subsidiary of Expedia, which we use for 99% of all travel bookings... corporate rates built in. There may be some additional benefit to this, in addition to holding down expenses.
     
  5. deant
    Original Member

    deant Milepoint Guide

    Messages:
    3,129
    Likes Received:
    12,385
    Status Points:
    10,620
    The company I used to work for allowed the individual to keep all miles for their future personal use. However, they did give a corp cc and wanted all charges put on that cc. Reason being is that they negotiated a discount with the cc company based on the volume of charges that were run on the cc.
     
  6. misman
    Original Member

    misman Gold Member

    Messages:
    13,888
    Likes Received:
    49,369
    Status Points:
    16,520
    I recall a discussion somewhere about the "cost" of keeping track of all of it, the "cost" of using the miles because of the extra work involved in finding reward availability, and the difficulty of culling the "personal" miles vs. the "business" miles in an account. It seems to me that it is cost-prohibitive, but some must make it work. IIRC, WalMart used to keep the miles.

    Lions Clubs International, last I knew, kept the miles that were accumulated and used them for reward tickets and upgrades for their President, BOD, etc.
     
  7. wolfsatz
    Original Member

    wolfsatz Silver Member

    Messages:
    84
    Likes Received:
    119
    Status Points:
    320
    Back in the 80's the U.S. government forbid it's employees from using any frequent flyer miles they earned on government paid tickets. I know a retired Air Force officer who was forced to pay back the retail cost of 4 first class tickets to Europe and was docked 6 months pay for violating that rule. Thankfully, it's no longer the case.

    I understand companies trying to cut costs but, in my mind, it's the benefit you give to your employees that you force to leave home so frequently. At worst, employers should book the absolutely lowest fare they can find but allow the employee to pay the difference out of pocket to book a fare on the airline of their choice in the class of their choice.
     
    Wurm and DonV.Smith like this.
  8. DonV.Smith
    Original Member

    DonV.Smith Gold Member

    Messages:
    1,609
    Likes Received:
    7,467
    Status Points:
    4,900
    Ouch, that's a very steep slap of the wrist!
     
  9. Wurm
    Original Member

    Wurm Silver Member

    Messages:
    843
    Likes Received:
    1,232
    Status Points:
    825
    During that same time period I used to visit the IBM offices in downtown San Francisco a lot. They provided coffee, but I was initially confused by a small box near the coffee machines with coins inside. I wasn't sure if it was an internal employee's "coffee club" kind of thing, but I later found out that it was there for federal government employees who were forbidden to accept free coffee - paying the 25 or 35 cents allowed them to have a cup without violating the rules.
     
  10. DestinationDavid
    Original Member

    DestinationDavid Milepoint Guide

    Messages:
    6,846
    Likes Received:
    12,715
    Status Points:
    11,770
    Glad those rules have changed, too! Only about 3% of my miles come from traveling from work, but they're still nice to have.

    Those rules have relaxed a bit, too. For most situations, anything under $20 is acceptable now, as long as it doesn't exceed $50 from a single entity in a year.

    I still make it a rule to refuse anything anyone tries to give me in connection with my government job though. I try to avoid any chance of looking influenced, even with a free cup of coffee.
     
    DonV.Smith likes this.
  11. Traveller
    Original Member

    Traveller Gold Member

    Messages:
    7,754
    Likes Received:
    55,206
    Status Points:
    13,995
    Stuart, I wouldn't work for a company that kept the miles. Easy enough topic for me. :)

    and Stuart, who keeps your miles?
     
    DonV.Smith likes this.
  12. ctporter
    Original Member

    ctporter Silver Member

    Messages:
    498
    Likes Received:
    1,129
    Status Points:
    820
    Thankfully my company lets me keep my miles and hotel points, but they do require me to use the corporate cc and travel agency to book my trips. We are not allowed to use personal cards that accumulate miles for work travel expenses.

    This thread made me think about this a lot, I can see where a company that does not have employees that travel regularly might be better off keeping the points/miles themselves to keep costs down, but when you have people that do travel a lot it really should be the perk for the person that got stuck sitting in the middle seat in the back on a long haul flight and then trying to sleep in a cramped room located next to the ice machine or elevators while expected to be up bright and early the next am ready to shine for the company. But, the real question that comes to my mind is how does a company keep the miles? Do they actually do all the booking then? and is the FF # assigned to the company?
     
    DonV.Smith likes this.
  13. MSPeconomist
    Original Member

    MSPeconomist Gold Member

    Messages:
    58,563
    Likes Received:
    98,528
    Status Points:
    20,020
    Stuart seems to have his own consulting company that makes money by managing FF accounts for the employees of companies that hire him so as to use the miles earned for company business travel. Since it's his business, he would make the decisions regarding his travel, including airline, class of service, routing, as well as when/how to use the FF miles he earns.
     
    DonV.Smith likes this.
  14. RedTape
    Original Member

    RedTape Silver Member

    Messages:
    200
    Likes Received:
    212
    Status Points:
    385
    I've been with the government 20+ years now, and in the past, miles earned as the result of government travel were the property of the government. The case of the retired Air Force Officer discussed above probably would have gone unnoticed had he not said anything to anyone.
    Thankfully, those days are over, as an act of Congress gave employees the right to keep their miles for personal use. It was seen as a low cost/free 'perk' to those who frequently traveled off the clock.

    These days, if I were to use miles to pay for a government trip (I would have to demonstrate that those miles were the result of government travel), I may be given an cash award equal to half the cost of the government rate on the city pair, thus effectively cutting transport costs in half. I've never done this and don't think I ever would, unless it involved a very expensive city pair, such as SEA-DTW (contract fare $714 each way unrestricted, $410 each way controlled capacity) or SEA-PHL ($775 o/w unrestricted, $372 o/w capacity controlled) or SEA-IAD ($620 o/w no capacity controlled fare available). ...and if the paperwork were easy to do. I'm not convinced that is the case, either. But luckily I don't have to travel to Detroit or Philadelphia, and to DC, I'm a DCA flyer.
     
    DonV.Smith likes this.
  15. KENNECTED
    Original Member

    KENNECTED Silver Member

    Messages:
    675
    Likes Received:
    858
    Status Points:
    795
    That's how it is here at my company.
     
    DonV.Smith likes this.
  16. deant
    Original Member

    deant Milepoint Guide

    Messages:
    3,129
    Likes Received:
    12,385
    Status Points:
    10,620
    It is typically called a "conscience box". Whenever we had government employees out for meetings we would always put the box out so they could, if they wanted, pay for the lunch, coffee etc. We also had to show the "fair value" of the lunch etc. Money was then turned in to offset the cost of the lunch etc.
     
    DonV.Smith likes this.
  17. Thanks for all your replies.

    @DONV - Yes, very often, government related entities do not let employees benefit from the miles ... it would be a contradiction otherwise ... using public money to buy ticket etc.

    @DEANT - The problem with using a single corporate cc for all charges is that the identity of individual flyer is not captured, meaning all the points go to the one corporate CC, but the travellers don't get credits to their individual FF accounts, so their elite status goes down. That's really a double edged sword ... for a company to both use the FF miles for savings, but to also cause employees to lose access to lounges, etc. I discussed this in the document I published in this thread.

    @MISMAN - There is certainly a perception amongst many that the cost of managing large volumes of FF miles accounts makes any attempt to generate savings as a result, a non-starter. That would be the case if you'd try to use, say Excel, to manage them. It's just not designed for managing efficiently 10,000 or 20,000 FF miles accounts. Yet, companies of all sizes choose to use FF miles to generate savings .. and most do so by using the mature softare solutions on the market.

    @WOLFSATZ - There's an interesting government report I read about government employees having the right to use miles for personal use or not. The argument on 1 side is flights are paid for with public money ... but on the other side, let's say, the writers of the report certainly didn't want to lose their own miles!

    @WURM - There's a very powerful message in the coffee donation box! If that's for coffee, I woner how they approached use of FF miles!?

    @TRAVELLER - Understood, and that's a free choice. But companies that have policies to own FF miles remain full of employees ... sometimes people join the company knowing that's the policy ... it's in their contract ... and other times, the policy changes and becomes accepted ... in the same way as a policy to force employees to fly coach/economy instead of business is not welcomed, but it becomes part of the norm after the dust has settled. I don't want to come over here as non caring. I've spent more than my fair share of years in airports, and everything connected with it ... so I understand how FF miles help keep the peace at home, etc etc ... But companies make this decision often because they need the savings .... certainly not for the fun of it. You asked about which companies keep the miles ... well, it's really not for me to name names .. if the companies didn't make it public information, I would be well out of order if I "announced" them. I discussed this in the PDF file attached to this thread.

    @CTPORTER - Great perspective! As I wrote above, I totally agree with why employees keeping the miles is attractive ..... As for how the company keeps the miles, well, if they pay for the ticket, whether directly or via expense reimbursement, they own the right to the miles anyway .. as the price of the miles is included in the price of the ticket. They then have the task of managing all the FF miles accounts and the miles within them. That's a huge mountain if attempted manually. Software solutions solve the problem.... and of course, all within the rules of the FF miles programs. As to who uses the software, it doesn't matter ... there is no need for any change of internal process. So if the company internal travel manager makes the reservations, the same person uses the software related to FF mile usage. If an external corporate travel agent uses the software, that same person uses the FF mile management software. Training time is less than half a day. It's very easy.

    @MSPeconomist - If I may correct your summary of what I do, I'm not a consultant. I work for a company that has software that manages frequent flyer miles accounts. I've fully disclosed this in my Profile here and in the headed paper of the discussion document I uploaded to this thread. I'm not undercover!! So, when companies decide to own FF mile to generate savings, they need special software to do so efficiently. We provide such software. So, as an example, we manage about 50,000 FF miles accounts for a Fortune 500 top 100 company. There's more about it in the PDF file I uploaded to this thread.

    @RedTape - That's a very informative posting. I've heard this also in several non governmental companies ... that employees receive a percentage of the saving, if they use their miles for business use.
     
    DonV.Smith likes this.

Share This Page