American Gives Frequent Fliers a Choice: Free Travel or Rebates

American Airlines Inc., looking for ways to increase traffic and also eliminate free travel owed millions of travelers, will let frequent fliers turn miles into money rebates on purchases from fast cars to fur coats.

The rebates, ranging from hundreds to thousands of dollars depending on the product and miles exchanged, will be paid directly to customers from the product makers, said Michael W. Gunn, American’s marketing vice president.

“Our customer research shows that while most members will still claim travel awards, a significant number appreciate the option of savings on products and services,” Gunn said.

Most other major airlines said they are studying American’s program, but Delta Air Lines spokesman Neil Monroe said the Atlanta-based carrier is pleased with its current frequent flier program and plans no changes.

Some analysts have worried that the buildup of free miles could haunt the industry by slashing revenue as customers cashed them in. Observers have estimated that the company owes about 70 billion frequent flier miles.