Are Frequent Flyer Miles A Tool Of Inequality?

Though I largely agree with Lucky's stand because an airline does not really fork out anything to run its frequent flyer program, I can't help but rebut Lucky's first two points.

It was shocking that so many people hogging the comment board just agreed with Lucky simply because business trips were grueling as if airlines owe you anything for having to patronize them. Airlines do not have moral obligations to reimburse business travelers in any form. They are just doing what they promised according to the contract of carriage. Business travelers should seek reimbursement from their employers as employers make them travel exhaustingly. Demanding compensation from airlines is as ludicrous as asking the merchant for tips when your girlfriend asks you to collect perfume for her. You can't just grab someone you interact with during your trip and say, hey, my trip is tiring, I want this and that.

Lucky's first point was even more ridiculous. That business travelers are not senior executives certainly does not deny the fact that they are far better off than the myriad of people who struggle to make their ends meet. It is still true that the better-off get extra perks as they work while those at the bottom of the social ladder do not, so generally the rich tend to be more rewarded than the poor by FFPs.

The only way to dismantle Amanda's argument is by contending that the airline does not lose anything running a frequent flyer program, as opposed to credit card merchants who inevitably raise the price of their products to cover credit card transaction fees.

It is not surprising that Amanda eventually deleted her post. There are already so many people attacking her as a person just because these people cannot think properly.

I've read through most of the posts now, and have to say I agree and sympathize with the air warriors who have little choice in leaving families and friends to live in motels and eat less-than-optimal food, with deficient exercise routines and constant jet lag, to do their jobs. But, in my later years, I laugh at those who talk of "hard work gives me greater rewards". Can you really think the street seller/hotel maid/garbage hauler in this country and others much less privileged doesn't work as hard or harder than you? Were they lazy in school, or did, perhaps, their schools suck compared to yours? Was a college education completely out of their financial reach? Do they love their kids less?

I'm no Biblical scholar, but one section sticks with me, from Ecclesiastes 9:11:
"I have seen something else under the sun: The race is not to the swift or the battle to the strong, nor does food come to the wise or wealth to the brilliant or favor to the learned; but time and chance happen to them all."

Victim mentally. Poor Amanda. Roughly 75% of my travel (and point earnings) is paid for via business travel. I'm not a rich executive c-suiter but I live well. Credit card points and personal travel compliment my point portfolio too.

However... The direction of this is wrong imo. Yes I'm college educated and I'm not going to apologise for that. I worked hard and earned it. I paid back my student loans (because I worked hard for a marketable degree and not some B.S. underwater basket weaving degree). Amanda and the other victims out there.. you want free travel? Work hard, get educated.. make good life choices.. and get yourself a position that affords company travel (see how much you enjoy that after the novelty wears off). Stop hating on those who earned what they have.

I had these colleagues who said to me: “I wish I had your job, you do all the travelling, you have all the fun.”... yet, eventually when our business started to grow, they started to travel as well - still not as much as I do. And now they say to me: “This travelling is brutal, this is really tough”.

I am not an executive and don’t make silly amounts of money. I spend about 2 weeks per month on the road, which includes at least one long haul, and a couple of short hauls.

I love my job and I love travelling. But I could certainly do without the jet-lags or red-eye flights, the crime and corruption I am exposed to, the bad food and occasional food poisening, the discomfort of long haul in economy (I am 6 ft 4), the time away from family, the weekends and bank holidays I have to travel for a prompt start at 9 am on Monday with my client, the delays and stress of missing my connection, the back to back meetings and fully packed 14+ hour working days, the time I spend in meeting rooms with no day light or the noisy and over-crowded airports.

That’s the dark side of travel that non-frequent travellers don’t understand, because their only point of reference is their summer vacation where they chose their destination and mode of travel.

The perks that come with my elite status make things a lot more comfortable. The miles I collect are used for upgrades - if posible at all. And for my vacations, I tend to avoid air travel.

Thus, anyone who has no experience as a frequent flyer or traveller for work has no right to come up with this nonsense about inequality. They should spend a couple of months on the road as part of their job to make a living before they post such a naive opinion.

If anything FF miles levels the playing field. How many of us would pay $5,000 for a plane ticket to sit on a plane for 10 hours? But show us how to earn to points to do it we'll do it. For a CEO or celebrity, $5K is pocket change while for the rest of us it's a big old wad of cash. Her biggest mistake is to assume that people who travel for work are flying in style rather than they work 16 hours / day and maybe don't get paid well. Take flight attendants for example. They can fly on buddy passes but their base bay is awful. I think she posted it in frustration because she doesn't know how to earn points to fly. She is probably thinking the only way she can earn 100K points is to take 50 economy flights over 10 years. But it never occurred to her that its because she's no damn good at this points game.

Miles, points, and cash back are discount programs, not income. You still pay taxes when redeeming them. You also pay taxes when buying them. Most of this treatment is because of the way companies treat their points under their income statement. These points are essentially considered “marketing expenses,” or “customer acquisition costs (COGS),” or Even a balance sheet liability. They are non-cash expenses. Therefore they are used to reduce corporate income (and tax), which provides some efficiency in how they charge for goods sold. These points may be lowering fares somewhat due to tax reduction, reducing unsold seat inventory, etc.

Amex won their case regarding the discount rates charged to merchants, under the evidence that transaction costs have dropped over time. When companies compete by differentiation (loyalty programs), we all get lower prices and better goods.

Millennials are ... well young and idealistic. Will change. Life will teach them the hard way.
Except that I think that business travellers and those not paying for their flights and hotels are the worst travellers ever, complaining all the time, high expectations, kind of "I desserve it", etc.

I live in hotels and travel full time on my own money and really find pathetic all those road warriors who don't spent one dollar for anything and spend the miles for holidays but think they are entitled to everything and desserve particular attention.

Overall, I agree on the fact that companies should enforce a policy about miles (as we do in my own company - I have set up this rule as a founder) > miles earned = pool of miles = used for business trips = we save money on travel budget.

When you don't pay with your hard earn money >>> low profile!

To all the comments regarding truck drivers not getting miles... my father drove a truck for 20 years, his last 8 as an owner-operator. He put every tank of fuel on his Amex, about $5k/week. You think he didn't have some miles?

But at the end of the day, if you want something the person next to you has, figure out a way to get it rather than complain you do not have it either. The majority of people have worked very hard to get where they are. And being in a position where your company sponsors your travel usually involves a lot more stress than a typical hourly position. How many middle managers and higher can leave after 8 hours and not have a care about work until the next business day?

@James - EXACTLY. I traveled weekly for nearly 10 years. The last thing I wanted to do was spend even more of my time at an airport or another drab hotel room with little to no style. Although I will admit now that I no longer travel for work, I do enjoy travel again and I also learned while on the road to always, ALWAYS bring your ear plugs and your sleep mask as well as an inexpensive bluetooth speaker.

Also, I now tip much more than before (to hotel housekeepers). They can make a trip so much more pleasant with extra lotions and other nice - ities to make your trip even more special.

This is by far the most ridiculous thing I have read this month. We have a problem with envy in our society. Life is not fair and people need to get over that and do the best with the hand they are dealt. This doesn't mean you can't be happy. I know plenty of rich people that are absolutely miserable.

FF miles are a win-win for companies and employees ( and airlines) because if they didn't have them employees would demand per diem amongst other things for travel. What Amanda fails to realize is that people who travel don't get compensated for delays, canceled flights and other hassles that come with traveling. It is not considered compensation and neither are other employer paid benefits (health, 401k etc).

I think we have bigger societal problems that we should be worried about.

I think the only valid argument is that FF benefits for work travel are kickbacks or bribes from the airline to the flyer and they have real value that is not taxed. The employer pays for the ticket, the flyer gets the value. For personal travel it is just a rebate and that should not be taxed.

I think FF programs frequently cause companies to pay more for travel than they would have otherwise. My corporate travel agency allows me to pay 10% more than the lowest fare without generating an exception. I've certainly paid $30 more for my preferred airline on a $400 fare. That is $30 more than my company would have paid in a world where there are no FF benefits. It keeps me more productive though to get an extra legroom seat for free though.

@ Sam

“The well-off person is likely to have made a long string of decisions that led to them being well off.”

Er, no. The well-off person is most likely to have won life's Lottery by being borne to wealthy parents, or even by being borne poor-ish but in a wealthy country where universal education is freely available.

Have a look at the latest social mobility figures. In the allegedly class-less US they have plummeted (there is now greater social mobility in class-bound England than in the US).

The American Dream is pretty much a myth.

First, why is it bad for a well-off person to benefit more?

The well-off person is likely to have made a long string of decisions that led to them being well off.

Our society benefits when there are rewards for good decision making. It causes more people to make good decisions, as measured by the wages and benefits that accrue to those who make contributions society highly values.

In other words... the original article writer hits one point correctly... FF points "unfairly" go to the well off. She just doesn't understand that this is a GOOD thing.

I used to use coupons a lot. I still use them for random stuff and I always will. At my peak, I was not that great at it when you see what people who are good at it could really do. I should now stand at the check out and start claiming “privilege” to those couponers or people who actually used their 10th stamped Starbucks card for a freebie. How ridiculous!!! My husband started flying biz to Asia this year every few weeks. It was super fun having him gone FOR WORK while teenagers had meltdowns on me. He returned stressed, jet lagged for 4 days and then back within a week. We were privileged to start life with wholesome backgrounds, but not a dime to our name. We did pursue education: Scholarships, fellowships, part-time jobs while in school to attain the “privilege” she talks about. I signed me and my children up early to the frequent flyer programs and they never asked my status not once. I didn’t have any. I was just asking to have my card stamped if I flew. Credit cards are a different story....... Thanks Lucky

@James W: This is a dangerous and harmful attitude that reeks of privilege and an inability to relate to anyone from a lower class. The notion that someone can't pay for first class (and basically deserves to suffer in economy as a result) ignores the obvious duality in the ways people pay for tickets ($ vs miles). Can you pay for first class tickets? Most people, even business travelers, cannot. They rely on companies to pay for those tickets, which then earn them miles, the "other" way to pay for tickets, which is largely inaccessible to those who are not spoiled by company travel. Everyone protests the taxation of these miles, but we all know it's personal greed saying "don't tax them!", not reasonable thinking.

"She wants what others have"... as anyone would. But why do others have those privileges? Because of a system that rewards the rich with even more nice things, and keeps the cattle in their class until they "work hard" enough to "earn" those things for themselves. Or you could just, you know, be lucky enough to have a nice family number who "works hard on the road" to earn miles and use them on you (also a nontaxable transaction).

@lucky: "constantly being on the road is tolling and largely undesirable work." Excuse me? Perhaps company-paid travel is largely undesirable for YOU, but many people including you choose a life of constant travel knowing full well how tolling it is on health and social life and family. It's not at all undesirable though. The rewards earned more than offset the tolling nature of such jobs, and the business travel maximizers love their millions of tax free points they can use on their personal vacations. If they didn't, nobody would want such jobs. Also, your claim that "there’s not necessarily a correlation between those who travel a lot for work and those who don’t" is ridiculous. That's not even the variables she is asserting a correlation between. When talking about business travel point income vs business traveler salaries, there is definitely a correlation between those variables. Most companies will say lower ranking employees can only fly economy while higher ranked ones can fly business on long haul flights, for example. This common practice certainly accelerates the points income of the already higher-ranking (higher paid) employees. It is completely irrelevant that some senior executives do not travel.

@khatl: You ignore the fact that when miles are used for personal travel, value is being transferred from company to employee, just like a paycheck. This is normally a taxable event, but since miles are funny money, it's difficult to compute the value. I would argue that is the only reason they aren't taxed.

@Endre: You say people shouldn't be envious of "a $1000 'free' ticket"... Usually business travelers accrue FAR more than enough miles to redeem a single $1000 ticket. If you are a maximizer AND a business traveler, you might redeem 5 or 6 figures worth of free tickets every year. (Which are truly free in that you don't pay any base fare, so no need for scare quotes there.)

Frequent flyer programs allow those whose companies spend a lot (which absolutely correlates high paid employees) to reap maximum reward. Then you have the CC/points maximizers, who may be able to achieve perks similar to those of a business traveler using all the tricks from this blog and others. But the vast majority of travelers are flying on the cheapest ticket that Expedia found for them and have 0 to 10k miles in their FF accounts. If you don't care to maximize, especially if you fly domestically in the US, you will almost certainly hate flying and be envious of "how the other side" travels.

Amanda has a completely valid point. Everyone chooses their business travel lifestyle knowing it will separate them from their family. Am I supposed to feel pity because you are away from family all the time, meanwhile you are earning millions of miles that can be used to buy luxurious business or first class seats that would otherwise add up to 2x, 3x your salary? (Perhaps if you're not a maximizer and only redeem miles earned from business travel for economy standard awards to Hawaii, then I would pity you.) Many business travelers who earn millions of miles from their flying DO constantly redeem them for premium cabin leisure trips for themselves and family. It absolutely contributes to inequality and makes it nearly impossible for the average person to ever fly business or first class, unless they are a maximizer, which in itself is a fairly tolling, isolating hobby ;)

This whole "inequality" schtick of the far left is perhaps the most blatant admission that they want nothing short of full-on communism. The only way you get the kind of equality that they are after is "From each according to their ability, to each according to their need." These guys are willfully blind to the absolute truth that we are all unique and are endowed with distinct traits, characteristics, capabilities, etc. Equality under the law is desirable. Forced equality in every facet of life is tyranny.

"Looking instead at the entire world, and frequent flier programs as one small sliver of it, then it’s just the opposite. Frequent flier programs are a tool of equality. Without them, only the wealthy would be flying in premium cabins. "

Not only just in premium cabins. Yeah, we flew to SCL in J with AA miles, but my Southwest Companion Pass has enabled me to take my daughter and nieces to places such as the Grand Canyon, Busch Gardens, Washington DC, Cancun, Belize, San Francisco, etc. On a salary of $55,000.

As someone who works for an airline, I find this “Amanda”’s comments redundant. Most of my HVG on board are due to the company paying for their travel. They still get into their 1980s Volvo in the carpark after flying J class. Saying that only high paid executives travel is just not the case. Status with an airline and a company charge card does not equal great wealth. It means you are good at your job and missing your family whilst you are away for not always good financial remuneration. Just a thought.

@ Ben Holz “And while I see where you’re coming from it wouldn’t be fair at all to tax miles. Are you taxed for the gifts you get?”

If your employer paid for the gift, yes. Anything of value you receive from your employer is taxable income. Any other rule would permit tax evasion.

@ khatl “Don’t agree FF miles are income. ... So, as marketing, in the same way that the $20 you received as a mail-in rebate isn’t income, neither are FF miles.”

Not the same, unless your employer paid for whatever earned the rebate and then allowed you personally to keep the rebate check. And in that case, it would be taxable income as well.

The fact is, frequent flyer miles are one of very few exceptions to the rule in the US that anything of value received from your employer (or because of your employer) is taxable income.

Meh - I had once had to change sled dogs in Ely, smell a durian on a flight out of New Delhi and do an emergency landing in a smoke filled plane in San Antonio. My kiddo lost the toe of his boot to an ill-tempered mule in Texas, got bit by a fish in the Bahamas and bruised by a manatee in Florida.

"The third group are the grizzled veterans for whom nothing can raise an eyebrow. You flew 100,000 miles in a week? No big deal, I did 200,000 miles once. Had to change camels in Timbuktu on the way to Lesotho? Well, I took a flying cockroach to Nauru."

I don't wholly agree with her but I think she does have a point. I think comparing it to Starbucks reward scheme is sort being blasé about inequality as that is significantly more accessible than flying. I know credit cards in the US are mode rewarding but quite a look people do not have access to these, so can't take advantage of the bonuses you talk of.

My biggest issue with the direction of FF schemes though is they don't actually reward loyalty. The people who get the most out of the schemes are forced to fly particular carrier by their company through a corporate deal often full-flexible tickets. These are people are not actually loyal as they don't have a choice in who they fly and there is not real an emotional attachment to the brand. Rewarding these people as oppose someone who saves up for a special trip and chooses to fly you regularly by their own volition is also counterintuitive from a marketing perspective as you are not rewarding those who are actually truly loyal to your brand.

That's the problem with most millennials, they've been brainwashed or raised by shitty parents to believing in the victim mentality. Perhaps she should have chosen a better degree - maybe a STEM degree instead of some bullshit transgender studies, peace studies or psychology major, then she could be spending 80% of her time on the road taking advantage of such perks as;

Spending untold hours in shitty airports, like the 59 minute layover turns to 4 hours in PHL.
Spend 17 hours getting from DFW to HKG for a 1/2 day meeting just to turn around in the AM.
Eating absolute crap while spending all those hours on the road.
The chronic jet lag, increased radiation and weaker immune system.

I could go on and on, but why? If I disagree with her, I'll just be branded some kind of "-ist" and have protestors hassling me while I eat Taco's at an airport restaurant.

Unreasonable? When Loyalty programs rewarded flyers exclusively for the number of miles they flew there were also those who took the most circuitous and thus least efficient flights available. I think companies are far more likely to monitor the price they pay for flights than the number of segments or miles (and time) it takes them to get to their appointed location. Loyalty programs now tend to reward behavior that is profitable to them and improves their bottom line, Unreasonable?