IBM's Proposal to Scrap Frequent-Flier Points Appears to be Dead in the Water

Strategic Insights -

Proposals sent by the world's largest computer maker, International Business Machines Corporation, to two of the largest US air carriers, United and American Airlines, to prohibit employees from accepting frequent-flier points appear to have been rejected. IBM sought to receive sizable air-fare discounts in exchange for this prohibition. The proposal has been circulating in the industry for some time, but the recent rejection by United and American Airlines seems to have put the idea on hold indefinitely.

Key Takeaways:

  • IBM sent a proposal to United and American Airlines to prohibit employees from accepting frequent-flier points in exchange for air-fare discounts.
  • Both airlines rejected the proposal, with United's spokesman Joe Hopkins stating that frequent-flier points belong to the traveler.
  • IBM's proposal was not a new idea, and the company has considered confiscating employees' points in the past.
  • Other corporate giants may follow IBM's lead if they start confiscating employee's points, potentially spelling the end for frequent-flier points.
  • Rental car companies are finding new ways to retain business travelers, with Thrifty Car Rental's Fastrac system and Tilden Interrent's Peace of Mind insurance program being notable examples.

Statistics:

  • IBM is the world's largest computer maker.
  • United and American Airlines are two of the largest US air carriers.
  • 55% of companies let their employees keep their frequent-flier miles.
  • 30% of companies take the points and use them for future travel.
  • $10,000 is the coverage amount for death of a passenger under Tilden Interrent's Peace of Mind insurance program.

Sources:

  • Business Travel News
  • IBM spokesperson Scott Brooks
  • United Airlines spokesman Joe Hopkins
  • Thrifty Car Rental's Fastrac system
  • Tilden Interrent's Peace of Mind insurance program