Airlines try to stem the trade of frequent-fliers' loot online
Airlines are stepping up scrutiny of Internet auction sites where savvy consumers and frequent business travelers are selling and bartering free vouchers, miles, and other airline awards.
In recent months, hundreds of deals for airline vouchers have appeared on eBay and on Craigslist sites across the country, including Boston. Now, these tickets are being offered at even lower prices as some of the bigger promotions with American Airlines and United Airlines that promised free flights across the country or around the world are set to expire.
''I travel a lot for work, have zillions of miles and vouchers, and I could never use them in my lifetime," said Tony Lito, a Worcester marketer who received two World Series tickets last fall from a couple who wanted the airline vouchers to honeymoon in Bali. ''This is a perk you've earned. Why should you not benefit somehow?"
The airlines don't agree. American Airlines and other carriers say they are increasingly monitoring Internet sites and handing out punishments for the sales of rewards that are explicitly prohibited. Facing stiff competition and high oil prices, financially struggling airlines say they cannot afford to have their own customers undermine award programs and profits.
Although airlines often allow awards to be transferred for free to family members and friends, selling the tickets for cash or bartering them for other products, such as tickets to a U2 concert, is strictly forbidden.
Last month, one Newburyport marketer was caught after selling for $300 on eBay a round-trip American Airlines voucher he earned from a ''Fly 2 Fly Free" promotion that gave a free ticket to anywhere in the world the airline flies to travelers who flew two round trips between Boston and Florida or Boston and California between Jan. 7, 2004, and April 15, 2004. After hours of negotiations over the phone, he agreed to give up a second ticket voucher, instead of the punishment threatened by American Airlines: lose 30,000 of his 80,000 frequent flier miles.
Tim Wagner, a spokesman for American Airlines, said the American Airlines AAdvantage program strictly bans the sale or barter of mileage or awards and works with Internet sites to terminate auctions, invalidate awards, and confiscate miles.
Some consumers are catching on and carefully crafting deals to try to avoid the wrath of the airlines.
On Tuesday, Sam Matson auctioned off his 2-year-old daughter's refrigerator art for $222.50. She's no doodling genius, but the toddler's drawings came with a ''free" round-trip American Airlines voucher to anywhere in the continental United States, possibly saving one lucky traveler hundreds of dollars.
''I'm not one that likes to break the rules but I can't use this ticket, so why not?" said Matson, a chemical engineer in Texas. ''I'll probably use the ticket for bathroom renovations."
Chris Donlay, eBay's vice president of corporate and internal communications, said the company allows people to sell one airline voucher per month on the site and provides warning notices telling sellers and buyers that they should be fully aware of the airline's rules.
''It's not our place to get in the middle of it," he said.
Donlay said it's conceivable, however, for the airlines to track down a member selling awards tickets and miles on eBay by e-mail if the airlines are involved in a current or recent transaction with that member.
''We do watch these Internet sites," said Debra Benton, director of loyalty marketing for Southwest Airlines. ''It is something we are actively pursuing because it does hurt the airline and the program."
Benton said first-time violators are sent warning letters saying the airline will terminate their membership if they continue to sell awards. She was uncertain about how many letters had been sent to customers, but added: ''It's certainly higher than we'd like it to be."
For Lito, who spends more than $20,000 a year on business travel, going after frequent fliers who have earned rewards doesn't make sense.
''This just alienates the airlines' biggest customers," said Lito, who currently is trying to sell ''an authentic envelope" for $600 that also comes with two free round-trip tickets to anywhere in the continental United States.
Rachel Savoie, an equity research analyst in Boston, prefers Internet sites such as www.sellingmiles.com as a lucrative outlet to sell off her miles from United Airlines. She recently traded about 80,000 miles for about $1,700, and she plans to unload thousands of other miles later this year.
''I know the airlines are struggling so badly and I can understand the restrictions," Savoie said.
''But I still go around the system."
Jenn Abelson can be reached at abelson@globe.com.
