Frequent-flyer programs offer 'patchy' benefits

Tuesday 21 September 2010

Article by Mozo

Frequent-flyer programs are money-spinning marketing tools that do not necessarily offer benefits for consumers, one commentator has said.

Clifford Reichlin, who runs the online forum frequentflyer.com.au, noted that most frequent flyer points are earned through credit card use, with rewards varying greatly depending on how much people travel and spend.

Speaking to the Sun-Herald, he urged consumers to compare credit cards before opting for a frequent-flyer program, noting that many such schemes will have high annual fees that may outweigh the benefits.

"If you spend less than $1,000 a month on your credit card, don't bother," he said. "Just go for a cheaper credit card."

Mr Reichlin also observed that frequent-flyer programs are particularly profitable for airlines because they get cash for the points from banks and are also able to control the supply of seats.

The comments come after Qantas last month revealed it had earned $328 million before tax from its frequent-flyer program.

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