Those not-quite-so-free reward ticketsby Martin Moylan, Minnesota Public Radio
Cashing in frequent flier miles for free plane tickets has long been a much-appreciated reward for air travelers. Next month, however, Eagan-based Northwest Airlines will follow the lead of many rival carriers and start charging customers a fee to turn their miles into tickets.
St. Paul, Minn. — At Northwest Airlines award tickets issued on or after September 15 will incur a fee.
Passengers will pay $25 to turn miles into a domestic ticket and $50 or $100 to get a reward ticket to Europe or Asia.
Justin Neudahl, who flies three or four times a year on business, thinks the fees stink.
"Adding a fee to it, I think that's kind of ridiculous," he said. "You or your company, you're traveling for business or pleasure, trying to build these miles up to put them toward something. Why get charged for it, when it should be free?"
Northwest says the fees are likely temporary. They're meant to help the airline offset skyrocketing fuel costs. If fuel prices come down, Northwest says it'll reconsider the fees.
The airline thinks most travelers understand the bind it's in.
"We were very concerned about the consumer reaction," said Bob Soukup, Managing Director of Northwest Airline's WorldPerks frequent flier program. "But I think people really understand that the price of fuel is so high that the airline has to do something to compensate."
Soukup says the impending fees haven't created a rush to redeem miles.
But he has noticed more interest in burning miles as plane fares rise.
"Generally, as ticket prices have increased, I think people have been more willing to part with their miles," said Soukup.
He says reward redemptions have been up about 15 percent this year.
As airlines increase fares and fuel surcharges, reward tickets are worth more than they were before fuel prices and airfares began their ascent.
Steve Wagenseller, a former Minnesotan now living in Hawaii, has noticed that. "I got away using my points when prices were rising," he said. "So I had my flight in hand when people were paying higher prices."
This year Wagenseller used reward tickets to travel to see family on the East Coat and in Florida.
He isn't sure how the redemption fees airlines are tacking on reward tickets will affect their future value, though. Travelers will grudgingly accept reward ticket redemption fees. That's the view of Randy Petersen, publisher and editor of Inside Flyer magazine.
Petersen says that if an airline goes belly-up, the frequent flier miles customers earned on the airline could go way with the carrier. Redemption fees may help keep some airlines flying.
"I don't think any of us like it," said Petersen. "But given the circumstances, we certainly do want these remaining airlines to stay in business."
Petersen says people have always complained airlines are stingy with reward tickets. But it turns out they're being more generous lately.
"Airlines are giving away more seats than ever before," Petersen said.
Petersen says in the first five months of this year, U.S. airlines overall issued about 15 percent more reward tickets than they did in the same period in 2007.
But he wonders about this fall. Many airlines have announced sizable cutbacks in flying starting in September. Petersen says that might make it harder to redeem miles.
"Schedules and flights are going to be cut way back. It will be interesting to see just what these cuts in the fall will mean for redemption," he said.
Northwest insists there'll still be a good supply of reward seats.
WorldPerks czar Soukup says that overall 7 to 8 percent of the seats on Northwest flights have been filled by passengers who got the seats with frequent flier miles.
And he says nothing much should change about that in the future, even going forward, especially as Northwest carries out its planned merger later this year with Delta Air Lines.
"We have to make sure the customers see value in the miles," he said. "So for that reason, we have to make sure that we've got sufficient inventory all the time out there. We would never dramatically reduce the amount of inventory that's available to the customers."
But he admits there will never be enough reward tickets to the choicest leisure destinations. "The difficulty is always there is never enough inventory in the places people really want to go," he said. "There's never enough tickets to Ft. Myers to go see the Twins in Spring Training."
Not for 25,000 miles. That's the least amount of miles a traveler needs to get a round-trip domestic ticket on Northwest.
But travelers willing to part with 50,000 miles can get around restrictions on domestic reward ticket redemptions.
Soukup says Northwest issues about 1.5 million reward tickets annually. And about a quarter of those tickets go to people who part with extra miles to avoid the usual caps on the reward seats allocated to a flight.
The more ticket prices rise, the more travelers may be willing to pay in miles and fees for a frequent flyer reward ticket.
- Morning Edition, 08/04/2008, 7:20 a.m.