Return to Transcripts main page

CNN Sunday Morning

Value of all Frequent Flyer Miles Worth about all of the U.S. Currency

Aired May 19, 2002 - 07:54   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MILES O'BRIEN, CNN ANCHOR: If you're a frequent flyer, do you have bundle of frequent flyer miles burning a hole in your pocket? Well, you're not alone, as CNN's Garrick Utley found out.

(BEGIN VIDEOTAPE)

GARRICK UTLEY, CNN CORRESPONDENT (voice-over): So there you are, facing the ever popular wait in the check in line, the searching infamous of security checks. Is there any payback for the ordeal? Well, if you're the one in three Americans who belongs to a frequent flyer program, you will get your miles.

(on camera): How many miles? Today, travelers around the world are holding about eight trillion. That's trillion miles they have earned, but not yet used. Airlines say each mile is worth about two to nine cents, which makes the value of those miles nearly as large as all the U.S. dollars, currency, in circulation.

(voice-over): And those miles can be as good as money for those who collect them and spend them. But how easy will it be to get the free flights you want this summer?

RANDY PETERSON, EDITOR, INSIDEFLYER MAGAZINE: Seats are harder to get than they have been for the last five years. So if you haven't planned ahead for summer awards out there, it could be real difficult for you this season.

UTLEY: 50 percent of the miles earned today are earned on the ground, as airlines partner with auto rental, hotel, telephone, mortgage and especially credit card companies. What can that lead to? Ask Andrew Lloyd Weber, the popular and very wealthy composer. When he bought this 18th century painting by Canileto (ph), he paid the $15 million price with his credit card, entitling him to 15 million miles. That could give Andrew Lloyd Weber 600 flights around the world, or one day, 17 roundtrips to the moon, which is something to sing about.

The amount of miles that are being earned is soaring by 20 percent a year. The airlines can and have tightened the conditions of their programs. Where does that leave the passengers?

PETERSON: The only leverage you have with the frequent flyer program is being a good loyal passenger. If you're one of their best customers, you're probably going to get anything you want from an airline these days.

UTLEY (on camera): It was 21 years ago that American Airlines launched the first frequent flyer program. No one could imagine what it would lead to. If those 8 trillion miles held today were to be redeemed at the current rate, it would take 23 years to use them up.

(voice-over): And there is one other cloud hanging over those airline miles. They are income that you spend. The IRS would like to get its bite, but miles are too difficult to value and collect. What's more, you can even earn free flights by paying your taxes with a credit card, something to think about, the next time you think it's the last time you want to fly.

Garrick Utley, CNN, New York.

(END VIDEOTAPE)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com