Wednesday, August 13, 2008

American Airlines to Raise Frequent Flyer Fees

Recently, American Airlines announced new and increased fees for those who want to upgrade economy seats using frequent-flier miles. Beginning Oct. 1, passengers traveling within North America and Central America will have to shell out $50 in addition to 15,000 earned miles. Transcontinental passengers will see their one-way fees jump from $300 to $350.


The new copayment is one of a long list of fees and charges U.S. airlines have recently passed to fliers to make up for rising fuel costs. JP Morgan analysts estimated recently that U.S. airlines will lose $7 billion this year due to gas prices. New fees for once-complimentary perks such as food, seat requests, headphones and transporting pets are being implemented by many airlines.


American Airlines is not alone in restructuring its frequent-flier program. Delta Airlines also announced it was introducing a three-tiered system that will require up to 60,000 miles for a last-minute domestic coach seat. On Nov. 1, Alaska Airlines will also raise the miles it takes to book an economy flight from 20,000 to 25,000 miles.


“The members see this for what it is — an effort by the airlines to generate revenue,” said Henry Hardeveldt, an aviation analyst with San Francisco’s Forrester Research.


FareCompare.com Chief Executive Rich Seany said the changes come at a time when frequent fliers are already frustrated that the number of seats available for awards tickets are being diminished by capacity cuts. His advice to travelers is simple: Book now.


“Use them now,” he said. “It’s like Russia in the early ’90s when currency was being devalued.”

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