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Executive Travel : European Airlines Upgrade Frequent-Flier Programs

From Bloomberg Business News

Here’s good news for frequent fliers: Just when many U.S. airlines are tightening their mileage awards programs, European airlines are loosening up.

The change was long in coming. Two years ago, most European carriers had no programs at all. Once they introduced them, their plans weren’t considered competitive.

Many airlines have since upgraded their programs and made getting into them easier. They’re feeling the twin pressures of impending deregulation in Europe and the expanding presence of U.S. carriers on the Continent.

“There’s been a complete transformation: European programs are now a lot more competitive,” said Randy Petersen, publisher of the annual “Official Frequent Flyer Guidebook.” He’s also editor of Inside Flyer magazine, of which he plans to start a European edition in February.

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Some programs require residence in Europe, and though the European programs still aren’t quite up to par with their U.S. counterparts, many of them offer creative awards.

But it’s the basic stuff, such as getting more miles, that most appeals to passengers. That’s what delighted Salim Ullah Khan when he opened his monthly statement from Lufthansa to discover that his recent business trip to Indonesia had won him a 6,500-mile bonus.

“It’s usually impossible to get bonus miles on Lufthansa--that’s never happened before,” said Khan, whose job as head of futures and options settlements for Lehman Bros. in Frankfurt helps him rack up 40,000 miles a year on the German carrier.

Lufthansa is hardly the only airline that’s caught on. In recent months, Air France, KLM, Swissair and SAS have drastically reduced the number of earned miles required for free trips.

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Many carriers are now outdoing U.S. competitors by offering exotic benefits. Accrue 180,000 miles with KLM and you can spend the weekend studying violin or any other instrument--including voice--in Vienna with a member of the Vienna Philharmonic.

Ever dreamed of landing the Concorde? The privilege is yours, at least in a flight simulator, if you log 3,500 miles with British Airways’ Executive Club.

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Virgin Atlantic offers an African safari for 500,000 air miles. Or cash in a million miles for a cozy weekend at Richard Branson’s hideaway on an island in the Caribbean.

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The impetus for such offers is competition. When European travelers compared offers, they realized that U.S. frequent-flier programs were better--and they began switching. That’s why the improvements in mileage have been on international routes.

On more regulated intra-European routes where U.S. carriers rarely compete, there is less pressure to reform, so mileage credits are less generous.

That may change in 1997, when the European air travel market is to be fully deregulated. Added competition will then pressure carriers to upgrade further.

“Give it two more years and the European Union will become a different place. Then you are really going to see them showing their best,” Petersen said.

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The programs are worth joining now, though. Petersen spent four months traveling around Europe gathering data for his 1995 “Official Frequent Flyer Guidebook” and concluded that Lufthansa generally gets the highest marks. The airline drastically lowered its thresholds for award claims in March. For example, it reduced the required mileage to earn an economy trip to North America from Europe to 90,000 miles from 150,000.

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Petersen also rates KLM highly. People who join get a 750-point bonus to celebrate KLM’s 75th anniversary. If they get a friend to join, they get 2,500 points--providing the friend flies twice.

U.S. residents aren’t allowed to join, but KLM’s program is linked to Northwest’s, so Northwest program members can enjoy many benefits of KLM’s program.

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Petersen rates as “terrific” the programs of both Scandinavian Airlines System and Swissair, which he said are very similar. One hitch: It’s tough to get upgrades to first class on Swissair, he said. Swissair is one of the few carriers that usually sells out its first-class seats.

Air France’s program has improved considerably since an upgrade earlier this year. Its route system is more vast than most, so members have a wide choice of destinations in redeeming awards. Some members gripe that the airline is lax about recording their miles, though.

British Airways’ program is strong, and many passengers say it has the nicest airport lounges. But the airline’s rules are complicated--with separate schemes tied to country of residence. British travelers in business class earn double the points won in economy class. Their award miles, known as Air Miles, never expire.

Passengers who live on the Continent and travel the same routes in business class earn just 125% of economy travel miles. Their miles, known as Executive Club Miles, expire after five years. Still, that’s better than the two-year limit common to many other programs.

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One problem with British Airways’ programs, as with most others, is that simple membership isn’t enough. Passengers must often belong to the more elite clubs to get the better benefits.

Before choosing a program, it’s wise to read the fine print.

Consider the experience of Paris resident Lauren Kelley, a regional affairs manager for Borland International whose territory includes Eastern Europe, the Mediterranean and the Middle East. She racks up thousands of miles yearly. But Kelley has been unable to cash in those miles because Air France requires three weeks advance notice to redeem points, and Kelley’s life is too hectic to allow such planning.

“If I were in the United States and had a choice of airlines--and therefore frequent-flier programs--I wouldn’t have this problem,” she said. “In Europe, I have no choice. I don’t choose my flights based on the plan I belong to. If I’m flying out of Paris, I have to fly Air France most of the time.”

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Hang on, Lauren. Help is on the way.

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More Executive Travel

* For tips on everything from laptop logistics to frequent-flier miles, check the Business Strategies section on the TimesLink on-line service. Sign on and “jump” to keyword “Business.”

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Details on Times electronic services, B4


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