Op-Ed: Mileage Multiplier To Add Expense - Business Travel News

Share this page

Text size: A A A

Op-Ed: Mileage Multiplier To Add Expense

August 05, 2010 - 12:15 PM ET

By Aash Shravah, general manager of corporate sales for KIE/Kintetsu International

In late May, American Airlines quietly announced a new program called AAdvantage Mileage Multiplier, yet another way the airlines will be able to add a new form of revenue to their bottom line.

Here is how American says it works:

"As an AAdvantage member, you will be given the option to purchase extra miles in conjunction with your trip when you check in for your flight at airport Self-Service Check-In machines, throughout the U.S. Just swipe your credit card to purchase your choice of double or triple bonus miles. In most cases, the Mileage Multiplier miles will post before you arrive at your destination!"

What travelers all over will be seeing when they check in at kiosks are messages enticing them to buy bonus miles on that trip. The more they spend, the higher the bonus. For example, on a trip from Chicago to Dallas, one earns 908 miles. However, when you check in, you will be given two choices. For $25 plus tax, you can double the miles you will receive on that flight, and for $49 plus tax, you can triple the miles. Confused? American Airlines has even released a video on their website of this process to help everyone understand it clearly. What a great idea to add to the already $7.8 billion airline ancillary fee marketplace, which already has increased since 2008 by over 142 percent.

While I have to give kudos to American Airlines for coming up with it, I am sure all the other airlines are already getting copycat programs in place and dreaming of the revenue opportunities. Bonus miles have been a benefit given to loyal flyers. Depending on the status of your airline mileage program, travelers were rewarded with from 25 percent to 100 percent on top of the miles flown. I don't expect that this program will have any negative effect on elite members of the mileage programs.

However, travel managers and TMCs are probably thinking about how they will reconcile this new line item on the endless menu of ancillary fees and how they will know the difference between this and a baggage fee expense.

What proof will companies need to ask for from their travelers who are faced with more opportunities to spend more during a travel cycle? With decisions to be made at every step of the way, including baggage fees, meals, reservation fees, Internet and drinks, this new additional option does not help at all. Unfortunately, many of those in accounting departments lack the skill to decipher the receipts issued by airlines. Many of these receipts use acronyms and codes that don't truly explain the charges.

Of course, this is an open door for travelers to try to be reimbursed on charges, which if explained, will not usually be reimbursable. In the end, the corporations will end up spending more than they need to, due to the lack of transparency and insight into the charges, and the airlines will be happy to add to the $7.8 billion marketplace they have created.

True to its name, you can expect that not only will this program multiply the miles, but also the T&E expense of companies worldwide.

This story originally appeared in the July 12, 2010, issue of Business Travel News.

This page is protected by Copyright laws. Do Not Copy. Purchase Reprint

Leave your comment:

Comments

blog comments powered by Disqus