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One for the mileage junkies out there in the US of A: Google Checkout, effectively an alternative to Paypal, is offering 2 bonus frequent flyer miles for every dollar spent through December 31, 2007.

It’s capped at 10,000 miles, i.e., spending $5,000 online. If that’s you, Ben Bernanke thanks you for your contribution to the retail-driven economy.

And don’t limit your miles-earning power to the power of the GOOG. Google Checkout still requires real payment from you, which could be via a miles-earning credit card. In that case, you’re effectively getting a 200% mileage bonus on top of the card’s miles.

Plus, if you reach the website of the retailer you’re buying from by clicking through an airline’s online “mall,” you can get another 2, 3, or even 10 miles per dollar, depending on the store. Leverage, baby, leverage!

Mileage bonuses are available on Alaska, Continental, Delta, Midwest, Northwest, US Airways, and United. Conspicuous in its absence: American. (JetBlue and Southwest use a different accrual scheme in their rewards program, so no surprise that they’re missing.)

Related:
- (aff)
- Earn miles by saving your money?
- Why haven’t bankers demanded better frequent flyer mile value?

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For some time the airlines have been doing their best to make frequent flyer miles less valuable. Expiration dates. Increased mileage requirements. Limits on the number of seats available for “free” seats. And on and on. Sure, travelers complain, but why haven’t banks?

Banks?

Yes, banks. Why? Because banks want to continue issuing the airlines’ frequent flyer affinity credit cards, since they make a pretty penny from them. And people will only put up with the annual fees and interest charges if they feel it’s worth it. Kill the demand for miles, you kill the demand for those cards.

And increasingly, frequent flyer programs are losing their value for customers. Take the latest changes to Continental’s OnePass: Tim Winship notes downgrades to the OnePass program effective February 1, 2008. Effectively, they’re price increases:

The price increase that will affect the most members will be for first-class awards on flights within or between the contiguous U.S., Alaska, and Canada. Capacity-controlled SaverPass awards will increase in price from 45,000 to 50,000 miles. And the price of unrestricted EasyPass awards will rise from 90,000 to 100,000 miles.

The other price increase applies to overseas BusinessFirst awards. Award flights between North America and Asia, India, Africa, or the Middle East will increase from 250,000 to 300,000 miles. And award flights between North America and Southern South America will rise in price from 180,000 to 250,000 miles.

Adding insult to injury, Continental is eliminating their 500-mile online booking bonus for tickets purchased at continental.com, effective December 1, 2007. While others, like Delta and United, have cut the bonus from 1000 to 500 miles, Continental takes the next step and just eliminates it. Edit: Delta eliminated their online booking bonus entirely in June 2007. Thanks to Chris and Walt for pointing out the error!

Take for granted that travelers should be annoyed. But if I were in charge of Chase’s Visa card program with Continental, I’d be annoyed too. If travelers decide that Continental’s miles are no longer worth pursuing, then they’ll bail out on the Continental/Chase card as well.

So why aren’t the banks raising a bigger stink at these mile devaluations?

UPDATE, December 4, 2007: None of this is valid anymore. Amtrak, in its infinite wisdom, has reneged on this redemption rates. See update below.

Great news for those with Continental OnePass balances too small to redeem for meaningful awards, but large enough to care about: Amtrak has recently partnered with the Choice Hotels Choice Privileges program, which lets you convert your points — with no loss in value — to a host of other programs. Gary Leff has the scoop.

The way it works: You transfer your points from Continental to Amtrak, which is possible at a 1:1 ratio. (You’ll need to call Continental to initiate the transfer, which must be in increments of 5,000, with a 25,000 mile cap.) You then transfer those Amtrak points to Choice Rewards. This opens up a wide range of possibilities for transferring miles again, since Choice Rewards can be converted to miles — again, with no net loss of value — on Air Canada, Alaska, American, Continental, Delta, Mexicana, Northwest, United, or USAirways. The options for transferring to Southwest’s Rapid Rewards program are perhaps even more attractive. See Gary’s post. UPDATE: Amtrak now devalues your points by 40% when you transfer to Choice. The transfer is no longer worth doing, in my view. Too much lost value.

Moving miles from one airline to another is a frequent flyer holy grail of sorts, so this is a welcome policy. There are other options for moving miles (see here for the lowdown) but it’s extremely rare to see a 1:1 transfer.

Amtrak’s policies have the habit of going “poof!” and disappearing overnight. Use this transfer option while you can.

Related:
- Reader mail: Can I transfer points from one airline to another?

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Over at the Consumerist, they posted a reader complaint that US Airways was sending out letters to Dividend Miles members with inactive accounts, “encouraging” them to pay up $25 to keep their accounts alive.

Expiration dates are unfortunately nothing new for US Airways. I mentioned it a year ago, and other airlines have similar policies. Most of those airlines with an expiration policy give you a chance to reclaim the expired miles — for a fee, of course — and US Airways is no exception. Their policy has a scale, from $50 to revive up to 4,999 miles, up to $400 if you need to resuscitate 100,000 miles or more.

But what’s notable here is that the notices were seemingly sent to those whose miles had not yet reached the expiration date.

A couple e-mails, a click or two, and here we have the original text of a lucky mileholder’s US Airways expiration upsell:

Dear **NAME REDACTED**:

US Airways introduced a policy last year that rewards our customers for staying active in the Dividend Miles program. In order to keep your account active, you must earn or redeem miles within a consecutive 18-month period.

Our records indicate that you have been inactive since 06-13-2006. We want to make sure you keep the miles you’ve earned. To keep your account active and hang on to your miles, you have several options:

* Contact Dividend Miles at 800-428-4322 and pay a $25 preservation fee with your credit card.
* Earn miles by flying on US Airways or any of our airline partners.
* Sign up and earn miles with one of our credit or debit cards.
* Use any of our other partners for everyday activities such as dining out, sending flowers and more.
* Redeem your miles.
* Shop with over 100 premium retailers for name-brand merchandise at the
Dividend Miles Shopping Mall, where you can reactivate your account for as little as 99 cents.

Take advantage of any of these options by 12-31-2007 and your account will remain active for another 18 months.

There are two ways to look at this. The optimist says that the airline is proactively warning its customers that they’re about to lose their miles, so that’s a good thing. And the $25 fee to keep miles alive is less than the $50 or more that it would cost after the fact.

The pessimist finds this “preservation fee” disturbing, and sees this as the first step toward an annual maintenance fee for loyalty accounts. But as the airline’s e-mail states, you don’t HAVE to pay money to the airline to stay in the miles game. You can reset the clock by earning or redeeming miles in any way. Redeem them if you can, or earn a few miles with something small if the balance is worth keeping alive.

So is the $25 preservation charge a great safety net or another twist of the screw? Personally, I think paying the money is rewarding bad behavior, and travelers should view this as another opportunity to re-evaluate their choice of airlines, or the utility of frequent flyer miles in their lives.

Delta, following in the footsteps of Northwest Airlines, has taken another step in the continuing devaluation of frequent flyer miles.

For some time, customers have complained that cashing in frequent flyer miles for the so-called “saver” award tickets has been getting harder and harder. The airlines have countered that there are actually two classes of frequent flyer tickets: 1) the “limited seats available” saver awards that may be harder to get, and 2) the unrestricted-inventory awards which let you cash in miles anytime there is an open seat, but at a higher price: generally double the miles. “Where’s the problem?” the airlines quip, noting that the cheapest cash fares aren’t available on every flight, so why should the discounted frequent flyer tickets be?

But that argument — which is problematic in and of itself, given the way frequent flyer programs are marketed — falls apart when you take away the “any seat” availability of awards.

Gary Leff points to Delta’s latest tweak of the rules at his blog. Delta announced the policy on its website:

Also, effective December 1, 2007, SkyChoice Award Ticket Reservations will no longer be available on every Delta flight in which a seat is available for sale. SkyChoice Award Ticket Reservations will continue to be available on most Delta flights, but seats will be limited and possibly unavailable on some flights. Our SkySaver Award Ticket Reservations will remain unchanged.

In other words, “We will now restrict availability on all tickets, but we’ll restrict some more than others.” Great.

(As an added bonus, there’s this nugget of a policy change on the site, too: “Some airline partners impose a surcharge on Award Travel redemptions for travel on their airline. These charges will be collected at the time of booking.” No word on how much, which partners, or under what conditions. I’ll inquire and report back.)

Delta isn’t the first to devalue their double-mile awards like this. They’re actually following in fellow SkyTeam alliance member Northwest’s footsteps. Northwest made their change to the WorldPerks program recently, though I admit that this one got past me when it happened. The previously unrestricted PerkPass award now “waives Saturday-night stay requirement, blackout dates and most capacity controls.” Southwest, long a holdout against capacity controls, started that monkey business recently too.

The number of people directly affected by this will be slim at first. Most people try to cash in their miles for the “discounted” miles-fares (e.g., the industry standard of 25,000 miles for a domestic U.S. coach ticket, 35,000 from the lower 48 to Hawaii, or 50,000 between Europe and North America). They don’t even consider the “standard” or “choice” awards that cost double. These “full fare” miles-tickets are really only useful when you’ve got lots of miles to burn and you HAVE to go. But as Gary points out, this has been a valuable insurance policy to have on hand, should tragedy strike.

Even worse, this dumbing-down of the once-unrestricted awards gives the airlines leeway to add even more restrictions to their saver awards. After all, as long as the alternative still has better features, you can mess with the saver award as much as you like.

It’s probably a matter of time before other airlines follow suit. But thumbs down to Delta and Northwest for being ahead of the curve on this one.

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Downgraded: Alaska Airlines miles
Alaska Airlines is the latest to cut the lifespan of frequent flyer miles. “Effective April 1, 2008, accounts with no mileage activity for the previous 2 years will become inactive and the miles will be removed from the account. Any mileage earning or award redemption activity on your account will keep it active.” You’ve been warned. (Thanks, Boaz!)

Upgraded: Corporate excuses for illegal activity
Legal news: “The legal dispute between Hawaiian Airlines and Mesa Air Group took an unexpected turn this week when Mesa attorneys told a US Bankruptcy Court in Honolulu that CFO Peter Murnane mistakenly deleted files related to the case as he attempted to purge pornography from his computer.” What is this, the Homer Simpson defense?

Upgraded: The nanny state
Downgraded: Inflight entertainment for anyone over 12
Heath Shuler, Democrat of North Carolina, wants the federal government to regulate inflight movies, which he says have become too violent. I haven’t seen anything too violent on an overhead screen, so I don’t really know what he’s talking about. I have seen some saucy stuff on the in-seat TV’s. If he doesn’t like overhead movies, fly an airline that doesn’t have overhead movies. Like Southwest. But look at the upside: If this bill passes (which I don’t think it will) then the airlines might be incentivized to roll out more in-seat monitors. Maybe? Please? Fingers crossed?

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Capital One has launched a money market account that offers miles for saving your money. But is it a good deal?

The offer sounds good on its surface: A decent yield for no minimum deposit, and an opportunity to earn some points by saving your cash. Today’s yield is 4.66% APY, and you get 1 mile for every $20 average balance in your account per month. So an average balance of $5000 should yield 250 miles. (You get a bonus of 2500 miles to start up the account with $500 or more.)

But these aren’t airline miles. They’re Capital One miles. And not even that many of them.

As I’ve argued previously, you don’t want to bother with Capital One’s proprietary points if travel is your goal. Your maximum value is 1 cent per mile.

So you’re not getting points that are worth a lot, and you’re not even earning that many miles to begin with. Plus, you’re taking an interest rate cut in lieu of the miles. The non-mileage earning account at Capital One gives a 0.44% higher rate. You could do even better elsewhere.

If you want to earn airline frequent flyer miles for your savings, UFB (who?!?) offers savings and checking accounts that earn American AAdvantage miles. But it’s a lousy deal: You earn less than 1% interest, and you don’t earn miles on running balances. To really earn AA miles with UFB, you need to be using direct deposit and bill-pay services.

Continental Airlines has also partnered with Chase and First Hawaiian Bank to earn you miles via a checking account, but you only earn miles when you use your debit card.

You’re far better off using your savings to make money, rather than collect miles. Credit, that’s another story. But don’t let a few piddling miles make your investment and savings decisions for you.

Related:
- Reader mail: Can I use credit card miles to upgrade a ticket?
- Reader mail: What kind of point-earning credit card is best?

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Reader Joanna writes:

Is it worth paying an extra $20 to get an extra 1000 miles? United has a deal where you pay the fee and get bonus miles. My husband and I are hoping to fly to France next year, and we could use the extra miles. What do you think?

$20 for 1000 miles means two cents per mile… that’s about what miles should be worth. That’s my minimum-value target for cashing in miles, though I try for higher. Most folks get a lot less per mile than that, if they cash in their miles at all.

(See here for a breakdown of how miles are valued.)

United’s offer is a discount to their normal “miles-for-sale” offer, so it’s an upgrade from that. But it’s not really a steal.

A year ago, Northwest Airlines started an identical offer. (They called it “supersizing.”)

My advice: Only pay up for this offer if you KNOW you are about to cash in miles for something, and you’re just shy of the “free” ticket. And use it only — only! — as a last ditch effort to bump up the account. Don’t use it to hoard. It’s not always easy to cash in your points, so you don’t want to just pay money willy-nilly to an airline. And if you’re effectively pre-paying for that “free” ticket. For most people, the offer isn’t worth it.

(gratuitous image of Three Mile Island lamp… Three MILE… get it… har har har…)

Reader Mara writes:

My husband and I are planning on flying to Milan from Houston later this fall using US Airways miles, and I’m wondering what the best option for connections would be. The agent tells me we can connect in Philadelphia, or there are Star Alliance flights we can take with Lufthansa, United, or Austrian. We know from reading your site that London Heathrow is bad for connections, and we would love some advice on where to change planes most conveniently. What should we avoid? Unfortunately there’s no Houston to Milan flight we can take! Thanks!

I applaud your strategizing, Mara, and I think you’re well on your way, simply knowing that Heathrow is a place to avoid. (Don’t believe me? Watch the video.)

There’s no nonstop Houston to Milan, so you’re going to be changing planes for this itinerary. So the question is, as you suggest, where to do it.

My general advice for travel to/from the United States: Try to avoid changing planes upon arriving in the US from overseas. You go through passport control and customs at your port of entry, not your final destination, so you have to claim your bags, possibly submit them to search, re-check those bags for your connection, probably change terminals, and hope you’ve left enough time to make the next flight. Not so in most of Europe: Connections are much, much easier in Europe, with customs inspections at your final destination rather than your entry point.

At the same time, the last thing I want to do after an overnight flight is to get onto another plane. Sure, I’ve done it, and sometimes it’s unavoidable, but my preference is always to have the overnight long-haul end at my destination. On overnight flights, try to arrive at your final destination, instead of at a hub requiring a connection.

So, practically, what does this mean for you? On your flight TO Italy, I would make connections in the U.S. and fly over the Atlantic direct to Milan. On the return, I’d make my connection somewhere in Europe and fly the long haul straight to Houston.

A caveat: These itineraries will usually involve different airlines on either end. That could get pricey for cash-money fares, even with codesharing. Try ITA’s search tool to find the best connections, and to get a sense of prices. Kayak.com may be of help, too, for mixed-airline itineraries.

But you said you’re using frequent flyer miles. Good! This is one of the less-celebrated benefits of the “free” ticket: You can mix your itinerary, with one airline going over and a different alliance member coming back. Use that flexibility to your advantage. And note: You won’t be able to view all the options online. You have to call the airline that you have the miles with — in your case, US Airways.

A quick search on arbitrary dates yields a flight from Houston to Philadelphia, and Philadelphia to Milan (all on US Airways). Coming back, consider Lufthansa from Milan to Frankfurt, and continuing from Frankfurt to Houston. Those flights follow the rules I set out, letting you avoid connections in Europe in the morning after your arrival, and skipping the tense fear that you might not make your connecting flight in the US, once you’ve dealt with Homeland Security’s passport control and customs inspections.

Either way you go, good luck, safe travels, and enjoy Milan!

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Virgin America’s website crashes (Mechanical delay?)
Virgin America finally opened its virtual doors for business, and within minutes, their site crashed. As Cranky noted, this might be the sort of thing they prepared for a little better. Maybe they should have upgraded from that $6.95/month Blue Host web hosting plan. Flights start August 8. If you want to buy tickets on Virgin America, and they’ve got some good promotional fares going, you can call them at 1.877.FLY.VIRGIN.

As I write this, a quick search shows that their flights don’t yet seem to be loaded on all the major online booking sites. Too bad: I was about to suggest booking online with Hotwire or Priceline, since both are waiving booking fees for all airfare on all airlines for the rest of the summer. But VirginAmerica’s fares aren’t available yet on those sites. No luck on Expedia or Travelocity, either. So far, I’ve only found the fares on Orbitz. If it’s any consolation, some airlines, such as jetBlue, are matching some sale fares. (aff)

Update 11pm: Virgin America’s site is back up. Huzzah.

Simpsons marketing goes airborne
Remember the saucy chalk-outline advertisements targeting air travelers flying into London-Gatwick? The same tactic has been put to use as part of the marketing hullabaloo for the upcoming Simpsons movie, to some controversy, because the drawing of Homer is mocking the, erm, virile outline that was left in a British field centuries ago by pagans. As far as Simpsons marketing goes, I prefer the conversion of 7-Elevens to Kwik-E-Marts anyway.

Travel to avoid… if you can
Joe Brancatelli has a great set of tips in a recent Portfolio column. He offers a list of airports and airlines to avoid if you can, and the special circumstances for each. For example, avoid flying Northwest Airlines in the last ten days of each month. They don’t have enough crew members, and they run short at the end of every month, leading to cancellations. Other tips are equally astute. (What, no swipe at Chicago O’Hare? Too easy?) Go read the whole thing.

Short-haul awards are back on American Airlines
Good news: Tim Winship reports that American Airlines is bringing back its 15,000-mile economy roundtrip short-hop award for nonstop flights less than 750 miles (each way). That’s a 10,000 mile savings per ticket. Dates of eligible travel will be September 1, 2007 through February 29, 2008. See here for full details. Historically, this means that United will announce a similar deal within a week or so. Start your stopwatches, the countdown is on!

Last year, Star Alliance announced intra-alliance upgrade awards, a system that allowed frequent flyer members of one airline to use their miles on another Star Alliance member’s flight. It’s a great concept, and a great option for those looking to draw down their frequent flyer balances, though the “cost” in miles isn’t always cheap.

But United Airlines frequent flyers won’t be able to participate any longer. Though the airline is one of the founding members of Star Alliance, and though UA offered Star Alliance Upgrades for several months, that feature is gone.

The United website’s page for Star Alliance Upgrades now reads:

Effective May 31, 2007: We will no longer accept Star Alliance Upgrade Award requests at this time. We apologize for any inconvenience.

Is this yet another Mileage Plus program devaluation, or more evidence of problems with intra-Star Alliance cooperation? Other programs don’t appear to have shut down their upgrade functionality, so the problem seems to rest with United.

Readers have been reporting mixed information from United on the intra-alliance upgrade front. Reader Samuel says he bought a flight on Singapore Airlines, and that United told him he could request an upgrade if he booked the ticket in Q class or higher. But Singapore didn’t accept United miles for upgrades, even when the program was functional. (See the chart below, taken from the Star Alliance website, obviously out of date at this point.) Samuel’s problem is emblematic of the confusion over this now-defunct benefit.

So why are the upgrades kaput? Unclear. United has the largest frequent flyer program within the alliance, so perhaps other programs were getting flooded with upgrade requests from United members. The bottom line is a further downgrade of Mileage Plus.

I’ve contacted United and Star Alliance to inquire why UA is no longer a participant. We’ll see if there’s anything to report, and I’ll post whatever I learn.

Hat tip to Benet Wilson for pointing out the changed web page!

Another one bites the dust. American Airlines is the latest airline to cut your frequent flyer miles’ lifespan, this time from 3 years to 18 months.

In an e-mail to members, American announced that the changes would go into effect on December 15, 2007. On that date, if your account hasn’t had any activity after June 15, 2006, your account will be zeroed out. If you’re not a recent customer, consider your past loyalty discarded.

At least they had the decency to write, though the letter essentially reads, “What have you done for me lately?”

Frequent flyers who continue to regularly earn (or spend) miles on the airline don’t have anything to worry about, since the clock is reset every time you accrue or redeem. But for infrequent flyers who are slowly collecting their points, watch the calendar.

The change follows the trend: United and US Airways have recently introduced a similar 18-month account activity window to keep miles alive. Delta’s window is 24 months. Air Canada’s is merely 12 months — and even if you remain active in their program, they expire your miles after 7 years. Nasty.

Northwest and Continental sort of have expiration policies. Your miles don’t technically expire, but if you have no activity, the account may. (Northwest’s window is 3 years, Continental’s is 18 months.) That may be a matter of semantics, but from what I’ve experienced firsthand and heard from others, they haven’t been canceling stagnant accounts wholesale. Yet. Just a matter of time, I’m sure…

The lesson: No hoarding! So spend those miles, if you have them. If you don’t have enough for a trip, and want to burn through them, consider magazines.

Related:
- AAdvantage Mileage Retention Policy (aa.com)
- United cuts the lifespan of frequent flyer miles
- Air Canada joins race to the bottom on frequent flyer mile expiration
- Reader mail: Whose miles are worth the most?

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