Two Airlines Battle Mileage-Tracking Websites
By Scott Mccartney, The Wall Street Journal | Oct. 13, 2011
Websites that help consumers manage their frequent-flier miles are the hot new thing in travel. And that bugs Southwest and American airlines.
The two carriers have sent "cease and desist" letters in the past year to several websites that track travelers' loyalty programs. Southwest argues the third-party sites threaten security of passenger information; American doesn't want outsiders "scraping" data off its website.
Sites like AwardWallet, MileWise and GoMiles have been growing in popularity. You give the mileage manager account information for all your loyalty programs, usually airlines, hotels and car rentals to see, in one place, when miles are about to expire or which program is close to an award or elite-status level. Some show cash prices for a ticket as well as what a ticket would cost in miles -- a comparison that requires multiple searches on an airline's website.
MileWise, for example, takes preferences and patterns from a survey filled out by the customer and then suggests the best options for a particular trip. In short, the mileage managers inform consumers of their buying power, even comparing what they get for miles at different airlines.
At the heart of the dispute is a little-known aspect of programs that will surprise most anyone accumulating frequent-flier miles: Most airlines claim they -- not the travelers -- own the miles and even account passwords.
Moreover, the terms and conditions of many airline programs prohibit travelers from their sharing account numbers and passwords.
"We all agree to terms when we sign up that we don't own the miles. But I don't know anyone, in 25 years of working with frequent fliers, who doesn't believe those are their miles," said Randy Petersen, founder of MilePoint, an online community for frequent fliers.
The claim that airlines own the miles has far-reaching implications. It means consumers can't sell or barter their frequent-flier miles or awards, and programs can simply cancel your miles if you violate rules or don't meet activity requirements.
Most programs do have ways you can transfer miles, but hefty fees erode the value. It costs US$375 to transfer 25,000 United Mileage Plus miles and US$310 to move 25,000 American AAdvantage miles, for example. You can donate your miles to charities picked by the airline, but you can't give away your miles on your own or offer them up at school auctions.
Many programs also have rules prohibited transferring miles in estates to heirs or through divorce settlements -- a major "gotcha" for many couples, since miles are often accumulated under one name through shared credit cards. (Some do allow transfers with court-approved divorce decrees or wills, after paying those steep transfer fees.)
So far, most airlines have allowed access to mileage-manager websites, albeit begrudgingly in some cases. "We do not support these sites as they do not adequately protect the customer and tend to cause a great deal of confusion," a Delta Air Lines spokeswoman said. Still, Delta hasn't taken action against them.
The mileage managers, which draw revenue from advertising and in some cases annual subscription fees, have a lot at stake, too. If they are unable to offer some of the biggest airlines, the utility of their service diminishes quickly.
Usingmiles.com pulled American from its website last month, and other sites say they are trying to negotiate with American. AwardWallet, MileWise, GoMiles and others don't offer tracking for Southwest accounts.
Mileage managers argue they are an ally of airlines since they make people hungry for more miles and happy when they redeem miles or avoid expiration losses. And they are simply automating tasks that administrative assistants or even travel agents do.
"It's ludicrous to say you can't get help," said Michael Komarnitsky, founder and chief executive of GoMiles.
Southwest isn't convinced. "We certainly understand the convenience that a third-party aggregator can provide for a member, with one-stop to see all your accounts," said Jonathan Clarkson, director of Southwest's Rapid Rewards program. "For us, it was weighing that convenience against any lapse of security of that data."
Southwest said it decided last year, as mileage managers began to proliferate, to ban them from its site because it was worried about the security of account information, which includes stored credit-card numbers.
Frequent-flier program experts say airlines may simply be worried about losing revenue to other websites. When customers log in to check balances, they see advertisements on the airline website and may be tempted by sales and specials. If they go elsewhere to check balances, the airline has lost a sales opportunity.
That, said Southwest's Mr. Clarkson, is "not the core spirit of why we're doing it. But there is a residual benefit when we're the only place they can access the information."
A spokeswoman for American said the airline isn't trying to eliminate the middle man, only police how independent services acquire and use data. Also, excessive "screen scraping," where computers ping an airline website repeatedly to extract information, strains the airline's website, American said.
The carrier hopes to upgrade AA.com so members can compare fare prices with mileage requirements, the spokeswoman added.
Airlines walk a fine line with frequent-flier programs, risking enormous customer backlash if they get too aggressive at enforcing ownership rules.
"Frequent fliers drive more than half the revenue of airlines. So to be too aggressive and assert ownership would be to cut off their nose to spite their face," said Christopher Barnard, president of Points International Ltd., which operates mileage manager Points.com and provides services to loyalty programs.