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.