ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, April 9, 1996 TAG: 9604090088
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
DATELINE: DALLAS
SOURCE: KATIE FAIRBANK ASSOCIATED PRESS
Many airline passengers are earning free air travel without ever leaving the ground.
Points toward free flights once could be earned only by flying. Now, miles can add up by hiring maids, talking long distance and paying the mortgage.
Programs had targeted business travelers who logged thousands of miles a year, but today frequent flier miles have become what some industry insiders call ``Green Stamps without the licking.''
Airlines have made agreements with an array of businesses to award mileage to their joint customers. Name the product: There's probably a company that will include miles along with a purchase.
``The programs are finding out that's an easier way to get people to fly with them because of the ability to earn points toward a ticket,'' said Steven Lincoln, managing editor of InsideFlyer, a magazine that caters to people who take their frequent flier membership seriously.
``I'm a mileage junkie,'' said Steve Belkin of Cleveland, who earns hundreds of thousands of miles each year while flying on business and takes advantage of any chance to accumulate more.
But he said mileage collectors should be careful not to pay high prices for goods and services just to get points.
``You just have to be smart and remember that if, God forbid, you have to buy a ticket, it's not that bad a deal.''
Michael Trigg, a spokesman for MCI, said frequent flier miles induce some customers to sign up with the long-distance company and stick with it.
He said MCI has expanded its program to four airlines - American, Southwest, Continental and Northwest - underscoring the value of the points as a marketing tool.
Fort Worth-based American Airlines added a new wrinkle Monday with its frequent flier program for home mortgages. American made the agreement with five lending institutions across the country offering two different plans to consumers.
One offer allows members to earn mileage on the interest paid on mortgages; the other lets them earn miles on the sale or purchase of their home when they use a participating real estate broker.
``In the highly competitive mortgage marketplace, the best way to reach the customer is to provide added value,'' said John F. Maher, president and chief executive of Great Western Financial Corp., one of the lending institutions.
The program, which requires a $39 annual membership fee, represents the first time an airline has entered a significant long-term commitment with its frequent flier awards.
``Nobody says it's going to last forever, but we anticipate it will last a long time,'' said Henry C. Joyner, vice president of marketing planning, adding that if the lenders sell the mortgage note, the new owner must keep up the mileage agreement.
All of the programs are pure gravy for the airline industry, which flies 6 percent to 9 percent of its passengers each year as frequent fliers, said analyst Julius Maldutis of Salomon Brothers.
The airline gets a check from its partner whether the customer cashes in miles or not. On top of that, a list of frequent fliers quickly builds into a valuable marketing tool with details of spending habits.
``The frequent flier flies when there is an empty seat,'' Maldutis said. ``They do not displace a revenue passenger. Consequently, these programs, if properly managed, are lucrative to the airline.
``It's pure profit to the bottom line.''
LENGTH: Medium: 68 linesby CNB