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Encyclopedia > Frequent Flyer Program
Membership cards of FFP
Membership cards of FFP

This article is about airline frequent flyer programs. For the TV movie see Frequent Flyer (TV movie) Image File history File linksMetadata Download high-resolution version (1787x1323, 488 KB) Different membership cards of Frequent flier programs (FFP) made by myself in 2006 Work by Matthias Sebulke aka Mattes (Write a message) File links The following pages on the English Wikipedia link to this file (pages on other... Image File history File linksMetadata Download high-resolution version (1787x1323, 488 KB) Different membership cards of Frequent flier programs (FFP) made by myself in 2006 Work by Matthias Sebulke aka Mattes (Write a message) File links The following pages on the English Wikipedia link to this file (pages on other... Frequent Flyer is a 1996 made-for-TV movie starring Jack Wagner, Shelly Hack, Nicole Eggert, and Joan Severence based on a true story about a commercial airline pilot and his attempt to be married to three different women at the same time. ...


A frequent flyer program (FFP) is a service offered by many airlines to reward customer loyalty. Typically, airline customers enrolled in the program accrue points corresponding to the distance flown on that airline. Accrued points (also known as frequent flyer miles) can be redeemed for free air travel; for other goods or services; or for increased benefits, such as airport lounge access or priority bookings. An airline is an organization providing aviation services to passengers and/or cargo. ...


The first frequent flyer program was created in California by Western Airlines in June, 1980.This early program was developed by Western's ad agency (Andy Pitlik of McCann Erickson) and Western ad executive Mark Dennett. Using a punch card (a modified time clock was place at the gate) Western's "$50 Travel Pass" was initially offered between San Francisco and Los Angeles, one of the most traveled routes in the world at the time. Travelers could collect as many passes as they wanted and use them to purchase tickets. This pioneering program was so successful, that Western quickly rolled it out to more than a dozen cities. However, the airline lacked the computer software to convert this program to a passive data collection system. Within less than a year, American Airlines created the first computer based system wide program AAdvantage, which was launched in May 1, 1981. Eventually, Western purchased this software from American and re-launched its program in 1983. Western merged with Delta Air Lines in 1987. Western Airlines was a large airline based in California, with operations throughout the western United States. ... American Airlines and American Eagle aircraft at San Juan American Airlines (AA) is the largest airline in the world in terms of total passengers transported[] and fleet size[], and the second-largest airline in the world (behind Air France-KLM) in terms of total operating revenues[]. A wholly owned subsidiary... AAdvantage is the frequent flyer program of American Airlines (AA). ... May 1 is the 121st day of the year in the Gregorian calendar (122nd in leap years). ... 1981 (MCMLXXXI) was a common year starting on Thursday of the Gregorian calendar. ... Delta Boeing 757-232 at Los Angeles International Airport in August 2003, showing the livery the airline instituted in 2000. ...

Contents

Points accrual

The primary method of obtaining points in a frequent flyer program is to fly with the associated airline. Most systems reward travellers with a specific number of points based on the distance travelled (such as 1 point per mile flown), although systems vary. In Europe, for example, a number of airlines offer a fixed number of points per flight regardless of the distance. The calculation method can become complicated, with additional points given for flying first or business class, and often fewer points given when flying on discounted tickets.


With the introduction of airline alliances and code-share flights, frequent flyer programs are often extended to allow benefits to be used across partner airlines. An airline alliance is an agreement between two or more airlines to cooperate for the foreseeable future on a substantial level. ... Code sharing is a business term which first originated in the airline industry. ...


Many programs also allow points to be obtained not just through flying, but by staying at participating hotels, or renting a vehicle from a participating company. Other methods include credit cards that offer points for charges made to the card, and systems which allow restaurant diners to earn miles by eating at participating restaurants. Credit cards A credit card system is a type of retail transaction settlement and credit system, named after the small plastic card issued to users of the system. ...


Programs differ on the expiration of points. Some expire after a fixed time, and others expire if the account is inactive for an extended period (for example, three years).


Customer status

Many frequent flyer programs identify travellers who fly more than a few times per year by awarding them different status levels, which in turn give a number of benefits that cannot otherwise be purchased. Status levels vary from scheme to scheme, but benefits can include:

  • Access to business and first class lounges with an economy ticket
  • Access to other airlines' lounges
  • Increased mileage accumulation (such as doubling or tripling)
  • Reserving an unoccupied adjacent seat
  • The ability to reserve specific seats, such as exit row seats with more leg room
  • Free or discounted upgrades to a higher travel class
  • Priority in waitlisting or flying standby
  • Preference in not being bumped if a flight is oversold

Some programs even permit elite members to reserve space on sold-out flights, giving members the ability of bumping regular passengers. Customer status is based on elite qualifying miles (or flight segments), not redeemable miles. Typically one elite qualifying mile is earned for each mile flown on a paid ticket, although there may be a percentage bonus for flying full fare economy or flying business or first class. In addition, the airline may offer opportunities to earn elite qualifying miles in non-flying ways, often in connection with their branded credit card. There are usually many more non-flying ways to earn redeemable miles which can be redeemed for free tickets and other benefits. Some airlines will recognise a customer's status with a competing airline, and grant them the same benefits. A travel class is a quality of accommodation on public transport. ...


Some airlines offer accelerated admission to their elite programs through special promotions, such as flying 25,000 miles within one month gains a top-tier membership normally reserved for passengers flying 100,000 miles per year.


Value of a point

Travellers frequently debate how much accumulated points are worth, something which is highly variable based on how they are redeemed. A typical ballpark figure is approximately 2 cents per mile based on discount (rather than full fare) economy class travel costs. However, most airlines have stringent capacity constraints on the number of "reward" seats available, so some people argue that this ballpark figure is an overstatement. In contrast, calculating the value of a point based on full-fare business class travel costs can yield a figure several times higher, but only if the customer would personally be willing to pay the multiple thousands of dollars such tickets would cost otherwise. However, a person paying a full business fare will be able to change flights on short notice without extra cost; a person flying business class on a free award ticket may find that last minute minutes changes result in no award seat availability with the result that a ticket must be bought.


Increasing limitations on the availability of seats for point redemption, increases in services fees that airlines charge for redemption, and limitations on the transferability of redeemed tickets together have caused the value of points to customers to decrease with time.


Many complain that most airlines call the points in their FFP "miles" when it really could take as many as 50,000 "miles" to fly within the United States.


Bankruptcy

In the wake of the September 11 attacks, some airlines have faced financial difficulties, raising concerns among frequent flyers that their points could be lost or devalued. All airlines include provisos in their program agreements reserving the right to modify or eliminate them at any time. But since miles are a strong customer incentive, troubled airlines avoid their elimination in bankruptcy proceedings, and indeed may expand them or make them more generous to elite members and high fare passengers in order to win sales. A sequential look at United Flight 175 crashing into the south tower of the World Trade Center The September 11, 2001 attacks (often referred to as 9/11—pronounced nine eleven or nine one one) consisted of a series of coordinated terrorist[1] suicide attacks upon the United States, predominantly... The examples and perspective in this article or section may not represent a worldwide view. ...


Furthermore, since most airline miles are never claimed, the programs represent a relatively small liability, and indeed can represent a profit center. Since the 1990s, U.S. airlines have sold billions of miles to partners such as credit cards, hotel chains, and car rental agencies, who offer this "currency" as an incentive to purchase their own services. Any effort to curtail the awarding of miles would thus endanger partner relations and another revenue stream. Notably, the banks backing several airline-branded credit cards have been a key source of airline financing, including United Airlines (Chase), US Airways (Juniper Bank), Delta Air Lines (American Express) and Northwest Airlines (US Bank). Germans dancing on the Berlin Wall in late 1989, the symbol of the cold war divide falls down as the world unites in the 1990s. ... The 4-star Manor House Hotel at Castle Combe, Wiltshire, England. ... Revenue is a U.S. business term for the amount of money that a company earns from its activities in a given period, mostly from sales of products and/or services to customers. ... The First Provincial Bank of Taiwan in Taipei, Republic of China was formerly the central bank of the Republic of China and issued the New Taiwan dollar. ... This article or section does not cite its references or sources. ... Look up Chase in Wiktionary, the free dictionary Chase may refer to one of the following. ... US Airways is an airline based in Tempe, Arizona, owned by US Airways Group, Inc. ... Barclays Bank headquarters One Churchill Place, Canary Wharf Barclays PLC (LSE: BARC, NYSE: BCS, TYO: 8642 ) is the third largest bank in the United Kingdom. ... Delta Boeing 757-232 at Los Angeles International Airport in August 2003, showing the livery the airline instituted in 2000. ... American Express (NYSE: AXP), sometimes known as AMEX is a diversified global financial services company, headquartered in New York City. ... Northwest Airlines is an airline headquartered in Eagan, Minnesota in the United States of America. ... U.S. Bancorp (NYSE: USB) is a financial services holding company, headquartered in Minneapolis, Minnesota. ...


Historically, the record is mixed. U.S. airlines have usually honored miles held in the accounts of acquired airlines. For instance American Airlines converted members of TWA's "Aviators" program to its own, as did Air Canada for Canadian Airlines' "Canadian Plus" program members. Sometimes, miles were honored by a close partner; Continental Airlines assumed Eastern Air Lines' program when it failed, as did Delta of Pan Am's. Bankrupt Swissair miles were transferred to Swiss International Air Lines TravelClub who were transferred to Lufthansa's Miles and More after the acquisition of the Swiss carrier. Trans World Airlines (IATA: TW, ICAO: TWA, and Callsign: TWA), commonly known as TWA, was an American airline company that was acquired by American Airlines in April 2001. ... Air Canada Boeing 767-300ER landing at London Heathrow Airport, England. ... Canadian Airlines International Ltd. ... Continental Airlines (IATA: CO, ICAO: COA, and Callsign: Continental) (NYSE: CAL) is an airline of the United States. ... For the Chinese airline, see China Eastern Airlines. ... Pan American World Airways, commonly known as Pan Am, was the principal international airline of the United States from the 1930s until its collapse in 1991. ... To meet Wikipedias quality standards, this article or section may require cleanup. ... Swiss International Air Lines (short: Swiss) is the principal airline of Switzerland operating scheduled services in Europe and to North America, South America, Africa and Asia. ... Deutsche Lufthansa AG (pronounced ) is the largest German airline, and the second-largest in Europe (behind Air France-KLM, but before British Airways). ... It has been suggested that this article or section be merged into Lufthansa. ...


Members are at greatest risk of losing their miles when an airline liquidates. All miles and privileges were lost, without recognition from any other carrier, in the cases of Midway, Braniff, and Ansett Australia. Midway Airlines refers to two airline companies in the United States. ... Braniff (IATA: BE, ICAO: , and Callsign: ) was an airline based in Dallas. ... Ansett Australia or Ansett was a major Australian domestic and international airline, flying passengers around Australia and to destinations in Asia at its height in 1996[]. The airline failed financially in 2001 and the majority of its assets have since been liquidated. ...


Accounting issues

Business travellers typically accrue the valuable points in their own names, rather than the names of the companies that paid for the travel. This has raised concerns that the company is providing a tax-free benefit (point-based rewards) to employees, or that employees have misappropriated value that belongs to the company, or even that is a kind of bribe. The U.S. Internal Revenue Service has not as yet made any move to tax mileage programs, though for instance the Canadian taxation authorities consider mileage redeemed for free travel to be a taxable benefit. Most companies consider the miles earned by their employees to be a valuable personal perk that in part compensates for the daily grind of frequent business travel, though some governmental organizations have attempted to prevent their employees from accumulating miles on official travel. A tax (also known as a duty) is a financial charge or other levy imposed on an individual or a legal entity by a state or a functional equivalent of a state (e. ... Bribery is the practice of offering a professional money or other favours in order to circumvent ethics in a variety of professions. ... The Internal Revenue Service (IRS) is the United States government agency that collects taxes and enforces the internal revenue laws. ...


On the airline side, the points represent potential non-revenue travelers on its books. These must be carried forward on balance sheets as an outstanding contractual debt for an indeterminate time, although the actual value (or loss) may be difficult to determine for any particular period.


References

See also

There are very few or no other articles that link to this one. ... FlyerTalk is an Internet forum for discussion of airline frequent flyer programs and business travel. ... It has been suggested that Loyalty program cashback be merged into this article or section. ... In marketing, sales promotion is one of the four aspects of promotion. ...

External Links

  • Global Flight Link to all 170 Frequent Flyer Programs; service for business travellers to select their individually best programs.
  • A comparison of the number of frequent flyer miles you need on different airlines.
  • A free tool to track all of your frequent traveler programs in one place.

  Results from FactBites:
 
frequent flyer program: Information from Answers.com (1375 words)
With the introduction of airline alliances and code-share flights, frequent flyer programs are often extended to allow benefits to be used across partner airlines.
Many frequent flyer programs identify travellers who fly more than a few times per year by awarding them different status levels, which in turn give a number of benefits that cannot otherwise be purchased.
In the wake of the September 11 attacks, some airlines have faced financial difficulties, raising concerns among frequent flyers that their points could be lost or devalued.
Howstuffworks "How Frequent Flyer Programs Work" (2679 words)
The frequent flyer program is an incentive program operated by an airline to reward customers for their continued loyalty.
Frequent flyer programs are the beginning of a relationship -- hopefully long and loyal -- between you (the consumer) and the airline.
Many of the frequent flyer program terms and conditions state clearly that passing along mileage in the event of the death of the account holder or the dissolution of an account holder's marriage is NOT part of the program.
  More results at FactBites »

 
 

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