For businesses fighting to show a profit in a challenging economy, every penny counts. Companies that have to factor air travel into their operating expenses face an even tougher battle as they fight to absorb soaring fares and fees. One cost-cutting option is for businesses to collect the frequent flyer miles their employees have amassed in company service and apply them to future flights. But that eliminates one of the few perks for workers who spend long, often uncompensated, hours traveling on the company’s behalf. Is there a way both can win?
Five major U.S. airlines say “yes,” by offering programs that reward businesses with points toward seats and upgrades, while letting employees earn conventional miles. Designed mainly to benefit small companies that can’t apply for larger corporate savings arrangements, these programs go by many names; our generic term is Business Incentive Program (BIP).
The plans are similar in structure, but quite different in application. Delta and Northwest are maintaining their individual programs at present, so we’ll review them as such. US Airways has no program.
What’s the point?
Whereas the mile is the prevailing currency in most consumer-targeted airline loyalty programs, the business variants among U.S. carriers use points. Differences between programs (and they’re big) lie within the formulae used to calculate points earned, and, of course, redemption costs for awards.Points are earned for the dollar amount spent on travel—miles flown don’t enter the equation. Northwest and United add another wrinkle by considering the fare class: Higher-cost fare categories earn more points for the greater amount spent and they’re multiplied at a higher rate. With Northwest this can result in astronomical yields. A New York-London M-fare economy class ticket costs $900 round-trip and earns 2,700 points. Book the same route on a B-fare and your cost rises to $1,200, but the earning rate leaps tenfold yielding 36,000 points. United’s PerksPlus offers double or quadruple points for tickets in higher fare-code tiers.
To find the value of a point, you need to factor in its buying power, and this is the area where Northwest’s program shines brightest. BizPerks members earn enough points for an upgrade from any fare in just 1.2 trips, and enough for a free seat in a mere 3.4 trips. Other programs aren’t nearly as generous, but in most cases the awards are attainable enough to keep members interested (see chart below for examples).
Hub penalty
A company’s main reason for selecting a particular carrier for its business travel is proximity to its hub. The airlines recognize that your loyalty might be a marriage of convenience so they reduce your earning potential substantially for flying from one of their bases of operation. American and Continental reduce earning potential for hub flights by 50%, Delta trims 60%, and Northwest slashes two-thirds. Only United gives full credit for travel from its home gateway.Here are some mini-profiles of domestic carriers’ BIPs, with their most notable features and links to further information.
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American Airlines - Business ExtrAA
Features: This program allows registration with as few as two employees. Dedicated credit card earns business points and offers 4% cash rebate.Link to program: https://www.businessextraa.com/content/about/businessExtrAA.jhtml;jsessionid=
Link to credit card: http://corp.americanexpress.com/gcs/cards/us/land/bx.aspx?src=B3K
Continental Airlines – RewardOne
Features: Doesn’t allow upgrades from business points.Link: http://rewardone.continental.com/default.aspx
Delta Airlines - SkyBonus
Features: Allows retroactive credit for flights taken up to two years before enrollment date. Also allows credit for code-share flights operated by foreign SkyTeam partners.Link: https://www.delta-skybonus.com/delta/about.do;jsessionid=
Northwest Airlines – BizPerks
Features: The best earner when not traveling through its hubs.Link: https://bizperks.nwa.com/mainMenu.biz?Actor=Corporate&Language=EN&POS_Country_Code=US&Code=BIZ&
United Airlines – PerksPlus
Features: No hub penalty. Rewards/earnings valid on Lufthansa.Link: http://www.perkspluspartners.com/rewards.html
[aside headline="Build Your Elite Status by Playing the Alliance Game" alignment="alignright" width="half" headline_size="default"]
You don’t have to fly your primary carrier to earn miles or elite credit in its program. Via the global airline alliance system (oneworld, SkyTeam, and Star Alliance) and other airline partnerships, you have more options. Fly with the airline partners of the carrier with whom you have elite status, and your choice of routes, schedules, seats, and fares expands exponentially. Some partners may have lower fares and even more favorable rules, such as a shorter advance purchase requirement or better stopover allowance. Some may have better seats. Purchase a ticket with a carrier that partners with yours and you can get both the miles and the elite credit you’re after—as well as a better seat!
More: Often, a smaller international carrier like Finnair (oneworld) will offer a much better fare and seat than the big American carriers. For instance, oneworld partner Iberia flies from Miami to Vienna for as low as $3,000 round-trip in Business Class, while another oneworld partner, British Airways, offers the same ticket for more than $5,000. Routings on the little guys are sometimes indirect, but that can pay off in more miles under your belt or even a bonus stopover in Madrid or Zurich.
Tip excerpted from First Class Flyer’s Special Report #2:
Airline Miles to Europe
www.airlinemilestoeurope.com[/aside]