Frequent flyer schemes take off with Asian carriers

WHEN American Airlines first lured passengers by giving away free tickets 15 years ago, most of its competitors were sceptical about frequent-flyer programmes. But now even Asia's airlines realise the importance of such incentive plans.

US airlines such as American, Delta, Northwest and United pioneered these marketing programmes, which give mileage credit to passengers who fly with them and their airline partners.

Customers also notch up bonus 'miles' by staying in partner hotels, renting cars from partner companies and using partner credit cards. Armed with this mileage, travellers can get free flights, free upgrades to business or first class and even discounts on merchandise.

'We don't treat it as giving away free flights,' said Tina Atkinson, manager of Cathay Pacific Airways' three-year-old Passages programme. 'We try to run this business during the summer . . . the off-peak season for the majority of business travellers.' Even so, with about 32 million people belonging to the world's various frequent-flyer programmes, the freebies do add up. For example, Delta Airlines' customers took an estimated 5.8 million free trips in the year ended June 30 - a number equivalent to about 8 per cent of the airline's passenger revenue.

So what is the pay-off for the airlines? 'Basically, we get loyalty,' said Apple Chan, head of Thai Airways International's Royal Orchid Plus programme, which was set up in July 1993. 'We're in a competitive market, and frequent-flyer programmes help.' Virgin Atlantic has taken the concept further by giving those with 30,000 miles in its Freeway programme the opportunity to take a two-day parachuting course in Buckinghamshire or a flight in a hot-air balloon, complete with instructor and champagne.

For a million points, a really frequent Virgin flier can have a week's stay with a companion at chairman Richard Branson's hideaway on Necker Island in the British Virgin Islands.

In Hong Kong, the desire for free mileage is not nearly as frenzied as in the United States, where American Airlines and its credit-card partner, Citibank, hold an annual 'What I Did For Miles' contest. Contestants boast of charging everything from normal household purchases to plastic surgery to earn miles.