Miles Ahead

Thanks to what seems an infinite number of ways to earn frequent-flyer miles — debit cards, long distance calls, grocery-counter promotions and the like — Americans have trillions more such credits than ever before. According to Randy Peterson, publisher of InsideFlyer.com, there were 7.9 trillion unused miles floating around at the end of 2001. The '02 numbers aren't in yet, but that's still a staggering six times as many as existed a decade earlier.

Redeeming all these awards, however, has become tougher. In the case of the airlines, blame a reduction in seats. As a group, the airlines have decreased capacity 20% to 25% since Sept. 11 because of the downturn in paying passengers, explains Tim Winship, publisher of FrequentFlier.com. Says Winship: "That translates into the same decrease in award seats." What's a frustrated traveler to do? Here's how to make your points count:

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--Use more miles when necessary. The holy grail of frequent-flyer rewards is the free ticket for accumulating 25,000 points, or miles. But it's tough to book one with only two to 20 seats on each flight available for rewards. By contrast, for travelers willing to use 40,000 miles, all seats on each flight are available. Many people balk at using so many miles, but it's not a bad deal. Consider this: the accepted value of a single airline mile is about 2 (figured on the basis of a 25,000 miles per $500 coach ticket). If you use 40,000 miles for the $500 ticket, the value drops to 1 1/4. That's the same as using 25,000 miles for a $300 ticket — which is something, in this JetBlue age, that travelers do every day. And it's much better than spending your miles for merchandise.

--Don't convert hotel points to airline miles. An average three-night stay at a full-service Hilton or Marriott will run you about $450. If you paid for it with hotel points, you would use 75,000, which you could also exchange for 15,000 miles. Using the 2-a-mile accepted value, those 15,000 miles are worth just $300.

--Plan early — or not at all. Call at least six months in advance for popular domestic destinations like New York City and Los Angeles, nine months for such popular international destinations as Australia and Hawaii. You can also fly by the seat of your pants. Within two weeks of a flight, airlines start to release more free seats because at that point they are unlikely to sell. So stay flexible.

--Avoid "dilution"--the industry's term for spreading your business among airlines or hotels and belonging to many programs. According to Mark Lacek, CEO of MilePoint.com — whose website allows you to exchange miles for magazine subscriptions and merchandise discounts — half the country's frequent flyers haven't earned enough points to qualify for any reward. In part, that's because they fly on many carriers rather than focusing on one.