WebFlyer :: Facts & Stats -

:: 25 Milestones in 25 Years of Frequent Flyer Programs

1985 -- Who owns the miles? Southmark/Envicon sued seven frequent flyer programs citing the "commercial bribery" of the programs. The lawsuit was tossed out with the court citing the ability of companies to manage miles on behalf of their business travelers without the interference of the court.
1985 -- Diners Club introduces first credit card relationship to popular frequent flyer programs. The popularity of these partnerships prove to be most valuable to members and programs alike in years to come. Probably ranks as the most important partnerships ever to be introduced to the industry.
1985 -- Charity: The American AAdvantage Liberty Club becomes the first to tie in a charity/non-profit cause with frequent flyer programs. Members could earn a bonus for donating to an organization raising funds to restore the Statue of Liberty. Over the years the call to donate miles to Operation Hero, the local Ronald McDonald House, the Asian tsunami, the collective 9/11 efforts and more have forever cemented frequent flyer awards as a popular method of giving and taking.
May 1986 -- Frequent flyer programs begin suing coupon brokers - the growing business of reselling frequent flyer awards for profit. At this time nearly 3 percent of awards issued were sold by third parties, mostly business and first-class international awards, which most members covet.
May 1986 -- First domestic program alliance of major programs as Pan Am WorldPass joins AAdvantage (discontinued May 1987). These type of reciprocal relationships would later enhance the membership value of both programs while diluting the "true loyalty" factor.
1987 -- Programs end their policy of allowing travel agents to redeem awards for members of frequent flyer programs. Later on this move would allow the industry to monetize the process of award redemption.
1988 -- Triple Miles: In what began as a credit card promotion involving American Express and the Delta Frequent Flyer program, this quickly matched program lasted all of 1988 and popularized the concept of "mileage runs."
1989 -- American introduces the SAAver and PlanAAhead awards structure giving a discount to a limited quantities of awards.
1989 -- United Mileage Plus introduces concept of "expiring miles." This becomes an industry standard.
1990 -- Air Canada becomes first program to allow members to purchase miles directly from the frequent flyer program, buying up to 10 percent of the award mileage level required.
1991 -- Westin Premier becomes the first hotel points program to allow the conversion of points directly into frequent flyer miles. In the early years up to 70 percent of hotel currency became frequent flyer miles.
1991 -- First major bankruptcy by an airline resulting in a major loss of miles and awards by members. Midway Airlines folded its wings in 1991 and 700,000 members of its Flyers First program lost all their awards.
Aug 1992 -- United introduces the first fee for changing awards - $25. Most other programs follow as it is estimated that nearly 23 percent of awards booked are changed later on.
1992 -- The FAA decides that PFCs (Passenger Facility Charge) should be charged on free awards. While some programs paid these fees on behalf of their members, later on the fees were passed through. Frequent flyer programs begin to lose their exemptions.
1993 -- IRS Commissioner releases official statement that the IRS is not interested in taxing personal use of frequent flyer awards.
1994 -- Hilton Reward Exchange: The first exchange that broke down the exclusivity of mileage currency. Allowed members to begin exchanges miles among their various programs.
Nov 1994 -- American and United simultaneously introduce "incentive miles" programs unleashing the power and reach of miles as a loyalty currency to any number of non-program-related partners.
Dec 1994 -- US Airways shoots down a strong corporate America initiative (Business Travel Contractors Corp.) to offer cheaper fares by forgoing awarding frequent flyer miles to business travelers.
1995 -- Wolens v. American. This eventual U.S. Supreme Court case involving changes to the AAdvantage program led the way for subsequent lawsuits against various programs.
Aug 1996 -- The Federal Aviation Agency issued Security Directive 96-05 to all airlines requiring them to match the ID of the airline traveler to the traveler. This ended a popular method of earning frequent flyer miles by enticing others to fly under your name and frequent flyer number.
1997 -- The first collective global alliance of major airlines and their frequent flyer programs. International travelers gained significant leverage of benefits.
Aug 1997 -- The U.S. government introduces a federal excise tax of 7.5 percent on sale of miles by frequent flyer programs to partners.
1999 -- Pudding Guy: David Phillips, a civil engineer at UC-Davis, becomes a cult hero in the obsessive subculture of people who collect frequent flyer miles.
2001 -- SaveSkyMiles: This member-driven initiative showcased the collective efforts of members to push back on changes that the Delta SkyMiles program had put into place.
2005 -- Air Canada Aeroplan sells part of its program, proving value to the public investment market.