Word: frequently
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Dates: during 1980-1989
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...programs were profitable when the relatively small number of customers who had earned free tickets could be accommodated in seats that would otherwise be empty. But now the legions of frequent flyers are accumulating freebies rapidly and may already be displacing paying passengers. Julius Maldutis, an airline expert with the Salomon Brothers investment firm, estimates that honoring all those free tickets could cost the airlines $1.24 billion in lost revenue. With some carriers already losing money, the added burden could be devastating. Admits Mark Lacek, director of business-travel marketing at Northwest Airlines: "It's suicide marketing. Insanity...
...basic frequent-flyer programs are similar at most major airlines. Typically, after compiling as few as 10,000 miles, passengers can upgrade the next coach ticket they buy to first class. For 35,000 miles, they can usually earn a free round-trip coach ticket to anywhere in North America. After 50,000 miles, it's off to Hawaii or even Europe...
...that is only the beginning of the possibilities. Most airlines have worked out reciprocal frequent-flyer deals with rental-car companies. When customers rent cars, they earn mileage with the affiliated airline; when they & pile up enough miles, they get discounts on future car rentals. At Avis, customers get credit for 500 miles when they rent a car in connection with a Northwest flight. Since the carriers have similar arrangements with hotel chains, frequent flyers can put together a deluxe vacation package. Example: logging 75,000 miles on Eastern or Continental wins two round-trip tickets to Europe or South...
Other businesses are getting in on the game as well. Some banks, including New York City's Citicorp, arrange for their Visa and MasterCard holders to receive frequent-flyer mileage every time they use their credit cards. The variations on this strategy are potentially unlimited. Members of TWA's frequent-flyer plan can chalk up mileage by buying Glad trash bags...
...promotion has dramatically boosted the sign-up rate for frequent-flyer plans. For example, the number of passengers joining American's program jumped from about 3,500 a day before triple mileage was offered to 7,000 a day now. At the same time, triple mileage has sharply increased the rate at which passengers rack up miles -- and free trips. Says H.G. ("Red") MacKenzie, vice president of the American Society of Travel Agents: "Triple mileage is stupid. The airlines have given away the candy store." Agrees Dan Brock, senior vice president for marketing at Piedmont: "There's no question that...