"Last year marked the twenty-fifth anniversary of the launch of the first frequent-flier program, American Airlines' AAdvantage, which in less than a decade spawned countless similar loyalty schemes throughout the industry and created a generation of mileage junkies. But don't feel left out if you didn't notice: The occasion came and went without much fanfare. In fact, instead of celebrating the free flights and upgrades promised by these programs, most travelers found that it was more difficult than ever to wring an award ticket out of the airlines. "Whenever my wife and I want to fly someplace, it seems like there's no way to use our miles," says Ed Reagan, a Pennsylvania-based financial consultant.

Reagan is not alone. More than half of the 750 readers of Condé Nast Traveler recently polled report that it has become more difficult to redeem frequent-flier miles in the past year, and nearly 70 percent say that it's gotten tougher over the last five years. Although the airlines do not disclose the percentage of passengers who have tried unsuccessfully to redeem miles for a ticket, the most recent data provided by the six largest U.S. carriers (American, Continental, Delta, Northwest, United, and US Airways) shows that most of them are issuing fewer tickets in exchange for miles. On Continental, for example, the number of award tickets issued fell from 8.1 percent of all tickets in 2002 to 6.8 percent in 2006; on United, it fell from 7.8 percent in 2002 to 6.6 percent in 2005.

"Certainly, the anecdotal evidence would indicate that it's never been tougher to redeem miles," says Tim Winship, publisher of FrequentFlier.com, noting that on some flights to the most popular destinations, carriers don't set aside a single seat for a mileage award.

As bad as the squeeze is in the back of the plane, things have gotten even tighter up front: US Airways recently announced that it is reducing the first-class section on its 757s from eight rows to two, and air marshals now occupy two seats in many first-class sections, representing as much as 25 percent of capacity in that class on many domestic flights. Even elite members are feeling the crunch, losing benefits such as free upgrades, bonus mileage, and access to airport lounges as some airlines make elite status more difficult to achieve. Continental, for instance, no longer applies mileage earned through promotional or partner offers, or even through certain low-fare tickets, toward elite qualification.

Why the new stinginess? First, with airplanes flying at record capacity (an average of 80 percent of seats are filled with paying passengers on every flight), fewer seats are available. And now that the airlines are beginning to fly profitably after six years of devastating losses, they're understandably reluctant to give anything away for free. Another reason is that there's simply a glut of miles. A full 60 percent of miles earned today are awarded for purchases other than plane tickets, as carriers rake in hundreds of millions of dollars for the billions of miles they sell to credit card and other companies that use them to lure consumers." [Via concierge.com ]

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Labels: Conde Nast Traveler Magazine, frequent flyer, miles