NEW FLIGHT INSURANCE
As we fly into the future, we may need insurance for things never
anticipated in the past.
Consider this scenario. You've worked hard all your life. You've saved
all those frequent flyer points, storing them for that long-awaited
retirement and trip around the world. Problem on the horizon: By then
your favorite airline may be toast. That's the bad news.
Now the good. For a premium of US $79, "AwardGuard insurance" protects
both upgrades and free trips points if an airline falters. The idea,
whose time has surely come, came from the active brain cells of Randy
Petersen, Colorado entrepreneur and publisher of InsideFlyer magazine
("for those that live in the air"), whose look into the future revealed
that many travellers are wondering whether they will be able to cash in
frequent flyer points or will they simply go the way of stocks on the
Vancouver Stock Exchange? AwardGuard itself carries $250 million in
insurance with firms in London, England.
Marketing air travel is more work than in the past when tired
travellers wanted only sun, sand, sea and Singapore Slings. Today they
want more. They want holidays that appeal to individual tastes and
provides value for money. One rule of thumb for frequent flyers is that
if airline points collected will some day save you about 10 percent of
the amount paid to obtain them. If you have collected sufficient points
for a frequent flyer award of a $3,000 pair of tickets for a "dream
vacation", you have a vested interest in making sure that the airline is
still operating. In this age of chaos, uncertainty and rapid change,
that isn't always predictable. Also with rising taxes and airport
departure fees, a free ticket is worth more than its face value. GST and
departure tax (up to $50 in Canada) are not payable and these are
after-tax-dollars saved! So in some ways points mean more than money.
Making sure you collect becomes even more important. It's like winning a
lottery, which in Canada is tax free.
Points are guaranteed with 14 major carriers, including Canadian
Airlines', "Canadian Plus" and Air Canada's "Aeroplan" programs. Besides
peace of mind, AwardGuard also provides a newsletter, a free advice
phone line, $200,000 flight insurance on free flights, and "protection"
that other insurance companies have been selling us for years, like
guaranteeing a product.
Remember the fine print. AwardGuard does not pay if airlines merge and
points are still honored, as was the case recently when Continental
covered Eastern's problems and Delta took over Pan Am. At the other end
of the spectrum, American, United and Delta seem financially sound.
AwardGuard also covers such "frequent guest" programs as Hilton, Holiday
Inn, Hyatt, Sheraton, Westin and American Express Membership Miles.
According to concept originator Petersen, some flyers are reluctant to
climb aboard some airlines because of rumors that they may be getting
that trip, but not be able to cash in on post-flight benefits because
the airline may not be around when they are ready to fly for free.
Petersen also points out that at least 20,000 points are required to
make his insurance worthwhile, since that would cover any $400 to $800
free rides.
Concern by frequent flyers is hurting airlines already. Many FF's are
cashing in points for free short flights because they're afraid they may
not ever get that free long flight. This fills short-haul seats and
kills chances of selling those seats to fare-paying flyers. Airlines
that appear financially stable are getting additional customers while
borderline fleets are losing customers when they most need cash
infusions.
Although most frequent flyer programs performed what they were set up
to do, they have left a "debt account" that is giving airlines an
airborne nightmare. They can't afford to damage the close bond they have
expensively established with passengers who give them from $10,000 to
$50,000 a year for tickets. These travellers pay their salaries.
Excursion economy flyers merely cover costs. Airlines losing FF's join
the list of extinct airlines.
More information:
Randy Petersen, President,
AwardGuard Membership Plan,
Frequent Flyer Club,
4715-C Town Center Drive,
Colorado Springs, Colorado 80916.
Phone: 800/487-8893.
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