Frequent Flyer Miles Are Used As Incentive By Airlines

[Sue Tierney]

Many airlines give frequent flyer miles as an incentive for customers
who use their airline.  A frequent flyer program offers points
which will accumulate based upon the distances that are flown on the
airline.  The frequent flyer points are used to obtain air travel
and other rewards such as priority booking among others.
The basic way that points are accumulated is by flying with a
particular airline.  For doing so your points will accumulate
depending on how many miles are flown with the associated
airline.  Through these plans there are a set number of points
awarded for every mile traveled.  Some plans are different
depending on which airline you are using.  Some of the European
airlines have a fixed amount of points offered for using a domestic
flight no matter what distance is being traveled.  The flight
class used by the customer does play a part in the number of points
awarded.  Sometimes it can become all so confusing.  Now
days airline benefits for frequent flyer miles can be used with
different airlines considering the partnership alliances and their
code share flight.
There are other ways to obtain points other than just by flying. 
Hotels, and vehicle rental companies, credit card companies, and some
restaurants are participating in these programs.  The expiration
dates of the points vary.  For instance, some of he programs
offer points which expire at a particular fixed time.  While
other programs let points expire if a customer's account remains
inactive for a long period of time.
For customers who fly frequently, for instance, more than two or three
times a year, there are various levels of status that can be achieved
which can be of great benefit.  Some of the higher level benefits
include:  
- Gaining access to lounges like first class and business through
using an economy ticket.
- Being able to reserve certain preferred seating
- Possibly doubling or tripling mileage points.
- There are a number of benefits available to those who achieve higher
status for accumulating frequent flyer points.
When one airline is acquired by another one frequent flyer points from
the acquired airline are generally honored.  However, the biggest
risk to member points is when the liquidation of an airline
occurs.  None of the frequent flyer points earned by membership
customers are acknowledged by the other carrier.
Although the Canadian tax authorities consider the redemption of
frequent flyer miles as taxable when they are redeemed, the U.S.
Internal Revenue Service does not.