Chaos in airline industry makes it a good time to use frequent-flier miles

The competition in the airline industry is creating terrific opportunities for people who want to travel now. Even if you don't want to lay out any cash, you can take advantage of the chaos in the industry by using frequent-flier miles you may have accumulated.

There are now fewer restrictions on how you use them than at any time in recent years, experts say.


"Right now everybody is so desperate for business that you can stay anywhere and fly anywhere you want," said Joe Brancatelli, executive editor of Frequent Flyer magazine in New York.

January and February are always sluggish for the travel business. But this year the recession, the war in the Persian Gulf and fears of terrorism have made a traditionally slow season dismal.


"Business is off 40 percent" in the industry, Mr. Brancatelli said.

Gary Topping, who runs GTA Travel in Gulf Shores, Ala., had no trouble booking two couples on a trip to the Caribbean earlier this month. They saved about $2,500 by cashing in 80,000 airline bonus miles.

"More people are interested in cashing in frequent-flier miles to save a couple of thousand dollars here and there in this economy," Mr. Topping said.

Many people plan to save their bonus miles for retirement travel. But some airlines impose a three-year limit on the use of the miles. And, you lose all your miles if the airline goes out of business.

Still, these programs can be a quagmire for the novice. Frequent-flier programs have changed considerably since they were first offered by American Airlines in 1981.

"In the early days of the programs, you could earn a total vacation, including free airfare, hotel room and car rental," said // Randy Petersen, editor of Frequent, a magazine that monitors trends in the programs. But over the years the airlines have cut back and layered on restrictions to reduce costs.

Today, you earn only free airline miles from airlines, although you often get coupons for discounts in hotel rates and car rentals when you get your free tickets.

The restrictions on travel fall into two categories: blackout periods, when free tickets are not honored, and capacity restrictions, when only a certain number of seats on each flight are eligible for free tickets.


"A lot of this is almost insider information," said Ken Heldt, managing director of Frequent Flyer Services in Colorado Springs, Colo., which publishes Mr. Petersen's magazine.

"The airlines use it as a marketing tool, but by keeping it complicated, they make sure that people don't use it too much," he said. In fact, only 28 percent of the miles earned

each year are used, he said.

Yet the rewards of sorting through it can be substantial. Mr. Topping recently got two free first-class tickets for a client who took a three-week trip to India, saving him thousands of dollars.

Similarly, Mr. Petersen recently returned from a trip to Australia on a free ticket he won simply by using an American Express card to purchase five airline tickets during a special promotion.

The frequent-traveler programs offered by many hotel chains, including Marriott, Sheraton and Hyatt, can be an even better deal than those offered by the airlines.


That is because you can use the points you accumulate for free hotel stays, as well as free airline tickets and free car rentals. Many companies also offer affinity credit cards, which earn you a point for each dollar you charge.

Most airlines have a minimum mileage award for short flights. For example, if you fly 250 miles, you would still earn the minimum mileage, which might be 750 miles or 1,000 miles, depending on the airline.

If you take longer flights, you earn roughly the mileage between your starting point and destination.

However, you earn additional points for flying first class, going through the carrier's hub city or buying merchandise from the in-flight magazine.