12 August 2008

ItÃ¢â¬â¢s now the Ã¢â¬Ëœmiles byeÃ¢â¬â¢ club

They used to be called the Ã¢â¬ÅâœnationÃ¢â¬â¢s second currency.Ã¢â¬Åâœ But thatÃ¢â¬â¢s the case no longer for the once wildly-successful frequent-flier programs that first started 30 years ago.

Proponents argued that the miles were easily earned and widely accepted.

These days, however, frequent-flyer miles look like confederate dollars.

Ã¢â¬ÅâœAmerican AirlinesÃ¢â¬â¢ frequent fliers were just hit with the news of another round of fees, when the airline announced increases on upgrades from discounted economy fares to premium class services,Ã¢â¬~ wrote travel expert Joe Brancatelli.

One-way upgrades on discounted economy fares for trips within North America and for trips between North America and Central America will require 15,000 frequent flier miles and cost customers $50, beginning on the first of October.

On flights between North America and certain cities in Asia, Europe, and South America, fees to upgrade one-way, discounted economy class fares will increase from $300 to $350.

ItÃ¢â¬â¢s happening all across the industry.

Delta last year took the unprecedented step of slapping restrictions on its most expensive (and formerly unrestricted) SkyMiles awards. For the first time ever, Delta told its fliers:

Ã¢â¬ÅâœThere are seats you can't have no matter how much of our currency you want to spend.Ã¢â¬~

The new three-tiered award structure Delta unveiled recently revives unrestricted awards, but at a high cost. The best ones, redeemable for international business-class travel to Europe or Asia, now cost upward of 370,000 miles round-trip, or about 100,000 miles more than last year.

Continental's program is also undergoing a major devaluation. Earlier this year, it raised award levels by thousands of miles. Last month, it raised fees and now charges a co-pay of as much as $500 to claim an upgrade award. And last week it announced it would do what Delta has just abandoned: impose restrictions on its most expensive, previously unrestricted awards.

The concept of a "free" seat as a frequent-flier award is gone too.

Airlines used to rule that an award ticket didn't include applicable taxes and fees. Then they imposed charges on passengers who booked an award too close to departure or under other circumstances.

Last month came the next wave: Fees of as much as $100 simply for claiming the award.

American Airlines even invented a $5 omnibus fee. By the airline's own admission, the fee applies if you somehow managed to avoid all the other award fees it now charges.

Depending on the airline, your destination, and your time frame, a formerly free award seat can cost you as much as $300.

As a result, airline programs now give fliers less for their loyalty than hotel frequent-guest plans, gas-rebate credit cards, or other frequency schemes.

Report by David Wilkening