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. US airlines have also hooked up with credit cards here, offering Hongkong Bank cardholders the chance to earn one bonus point per dollar spent. Eight bonus points translate into 0.62 miles in United's Mileage Plus programme. Asian airlines have been slow to start frequent-flyer programmes, and when they have, theirs have often been less generous and less well connected than the US variety. US airlines generally give one credit mile for each mile flown, but Thai Airways, for instance, gives economy-class passengers flying on excursion tickets only 0.7 bonus miles for every one flown. Others, such as Korean Air, do not give any bonus miles to customers paying less than 75 per cent of the full fare. Travellers on the lookout for free flights have a lot to watch out for: some frequent-flier plans charge membership fees, and others, such as Air India's, are open only to domestic residents - although the Indian carrier is working on a global programme. The most common drawbacks surface once you are signed up, however. Topping the list are mileage expiration dates (bonus miles on many non-US carriers last less than three years), blackout periods (free tickets generally cannot be used for peak-season travel) and eligibility restrictions (Cathay Pacific, for example, grants miles only to business and first-class travellers). For those eager for a global network, programmes offered by such airlines as Korean Air, which has no airline partners, or China Airlines, with no hotel or car-rental partners, may not be good enough. Many US-based programmes, such as Northwest Airlines', allow members to transfer free tickets to friends. Among Asian airlines, Cathay, Japan Airlines, Korean and Thai give this privilege, although the latter two allow transfers only to family members. Still, there is no doubt even Asia's frequent-flyer plans have taken off. Since its July 1993 start, Cathay's Passages programme has provided more than 60,000 free flights or upgrades - a 57 per cent redemption rate - with 30,000 this year alone. In February, just before the initial batch of two-year certificates was to expire, redemptions jumped 50 per cent from the previous month.
