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Long-Distance Ticket to Frequent-Flier Miles

January 16, 1994|SUZANNE WOOTON | BALTIMORE SUN

By now, you may well not charge a dime on any credit card unless it rewards you with airline frequent-flier points. But are you making your long-distance phone calls work for you the same way?

Since MCI began offering frequent-flier miles through American and Northwest Airlines in 1989, other long-distance companies have hooked up with carriers, capitalizing on the program that has become an indispensable marketing tool for airlines.

Today, "affinity card" customers of MCI and five other telecommunications companies can earn at least five miles for every dollar spent on long-distance calls. At that rate, a $400-a-year long-distance bill could earn 2,000 frequent-flier miles.

AT&T, the nation's largest long-distance company, began offering its own frequent-flier program, called True Rewards, on Dec. 20, in conjunction with Delta, United and USAir.

"It's a defensive thing for AT&T to keep people from jumping to Sprint and MCI," says Randy Petersen, publisher of Inside Flyer, the Colorado Springs, Colo.-based magazine. "Before long, every major frequent-flier program will have an affinity card with a long-distance carrier."

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A spokesman for MCI says the company has lured customers from other phone companies because of the program.

"We know that people have switched because of the affinity card," says Chris Mannella, director of partner sales and marketing at MCI in Arlington, Va.

Introduced by American Airlines in 1981, frequent-flier programs were designed to create passenger loyalty by giving repeat customers free trips or upgrades to first-class. Industrywide, membership has soared from 1.8 million to nearly 30 million in just 12 years.

Typically, the long-distance phone companies purchase miles from an airline. Customers who enroll receive an affinity card from the phone company. The frequent-flier points they accumulate as a result of long-distance charges show up on periodic statements issued by the airlines.

Some companies offer points only on residential service while others include business lines, 800 numbers and calling cards.

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The affinity cards are most beneficial for businesses with hefty monthly phone bills. Petersen's company, for instance, spends $3,000 to $4,000 a month on phone service, he said. That means a free airline ticket about every two months. Typically, 20,000 to 25,000 points will earn a ticket in the continental United States.

"Residential customers probably won't earn a free ticket with their long-distance bills, but a couple thousand extra miles could push them over the edge," Petersen said.

Most of the phone companies offer sign-up bonuses, ranging from 500 miles to 5,000 miles.

But Petersen says consumers should look carefully at the phone company and its rates before switching. "If you pay twice as much for long-distance service just to earn miles, you need to re-evaluate your purpose."

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