Seoul Carriers Lure U.S. Biz With Double Mileage

<H1> Seoul Carriers Lure U.S. Biz With Double Mileage</H1>By Norman Sklarewitz

<I>Seoul </I>- South Korea's two largest carriers might provide the answer to one of the largest sources of potential conflict in travel management: getting travelers to book on a preferred carrier and allowing them to earn frequent flyer points.

Taking the loyalty concept a step further, Korean Air's Corporate Mileage Bonus System awards credits earned on miles flown both to the passenger and to the company. The airline said it is in talks with other carriers about collaborating on a joint mileage program.

The second Korean carrier, Asiana, relaunched its Corporate Bonus Club in April. Similar to the program offered by KAL, one block of mileage goes to the passenger and a similar amount is credited to the corporate account, according to Patrick Khoury, general manager of marketing and sales, the Americas.

Joining ACBC requires that five employees, including the company president, sign up. "It's been wonderfully successful," Khoury said. The miles can be redeemed for use on Northwest Airlines, Asiana's code share partner. The ACBC also gives a 25 percent mileage premium to passengers flying in business class and 50 percent in first class.

Randy Petersen, editor and publisher of the monthly magazine <I>InsideFlyer</I> in Colorado Springs, sees the introduction of "double dip" mileage programs by foreign-based carriers as a way to win increased market share away from U.S. carriers.

"Asiana is a relatively new airline out there, and kind of learning what it takes to get a hand-hold here in the U.S.," Petersen said.

Although Asiana began its mileage program a few months ago, it's not the first Pacific Rim carrier to offer double mileage credits. "JAL and Lufthansa have had similar programs for a few years, so these other Asian carriers are just reacting to what their competitors are doing," Petersen said. "Mileage programs in the U.S. appeal to the greed of the individual traveler; these corporate programs appeal to the greed of corporate travel managers who see them as a way to save on their travel dollars."

Petersen said he doubts that more than a few hundred companies have signed up for these programs, and that those who have "aren't the big guys," adding, "they haven't moved a lot of market share."

U.S. carriers do not offer corporate mileage programs, and Petersen doesn't expect any to adopt one. "People Express actually had something like it years back, but when Continental Airlines bought them out the first thing they did was to get rid of it."

Both Korean Air and Asiana Airlines have developed computer programs that automatically link the two different mileage numbers. When a passenger makes a reservation with either airline and provides a code number, the system recognizes that number as being tied to the corporate account, and mileage credit is awarded to both the individual and company.

Meanwhile, the Seoul-based carriers are battling for the corporate market on other fronts in terms of negotiated discounts and upgrades.

KAL's corporate contracts are extremely liberal, said Esther Ahn, pricing coordinator, American region, for Los Angeles-based KAL. "No set number of trips are required to be eligible for a negotiated fare," she said. "It could be a fairly modest number, but the greater the frequency, the greater the discount."

She declined to cite the extent of corporate discounting but suggested that companies can cut the best deals in high-volume gateways such as Los Angeles and New York City. "The degree of the negotiated fare will depend on the market situation," she said.

KAL also is promoting its Corporate Account Upgrade Program, allowing travelers who purchase full-fare tickets in either economy or business to receive a single-class upgrade. To qualify, the traveler's employer-regardless of company size or frequency of travel-must sign up with KAL at any of its 12 sales offices in the United States. An authorization number is entered into the res system, automatically clearing the upgrade.

For its part, Asiana offers single-class upgrades with the purchase of a full-fare ticket as well as negotiated volume-based discounts.

"With volume comes commensurate discounts," said Khoury, who declined to cite any figures. "We don't have a formula. We need to provide value to companies and we're sincerely trying to do that. But we have to be realistic; we know we can't fill the needs of every travel manager or travel planner."

As for promotional fares, Khoury said that Asiana offers a published rate of $866 for a round-trip economy fare from the West Coast, about half the amount of the unrestricted $1,632 ticket price.