This site has been created to assist departments in managing frequent flyer miles and awards. The information and web links were tested prior to publication. Select the appropriate link for an overview of the issues involved or ISU's position on the use of Frequent Flyer miles or scroll down.
Overview - The airline industry uses Frequent Flyer programs as an incentive to attract and encourage travelers to use their services. Frequent Flyer and other incentive programs do have a cost associated with then. These programs add somewhere between two and three percent to the cost of a ticket. Businesses have tried, for many years, to recover this cost. The airlines' insistence on awarding Frequent Flyer miles to passengers by name has thwarted most corporations' attempts to reclaim miles. Airlines have also failed to develop consistent standards for redeeming Frequent Flyer miles. Some airlines allow miles to be readily transferred between travelers, while others only allow use by the traveler holding the Frequent Flyer account.
Both the Federal Government and the State of Iowa have long recognized the value of recouping Frequent Flyer miles. The State Auditor issued an applicable opinion, which confirms all award coupons, free tickets or other incentives gained as a result of traveling at university expense belong to the university, not the traveler. Unfortunately, tracking Frequent Flyer mileage and converting these miles to free tickets or reduced cost tickets meeting the traveler's schedule has not always been an easy task. As a result, Frequent Flyer miles have not been extensively utilized to obtain free or reduced cost tickets for university business travel. This situation is changing. We now have the ability to report Frequent Flyer mileage by traveler within each university department. As a result, we ask departments to consider the potential value Frequent Flyer miles represent. To facilitate Frequent Flyer mileage usage, departments are encouraged to plan ahead and ask travelers to be flexible in accepting alternate itineraries.
Some airlines are now offering cash value on Internet shops as an option to free or reduced cost tickets. Internet brokers, who recognize the value, are purchasing Frequent Flyer miles on a cash basis. It would be inappropriate for employees to convert their Frequent Flyer miles earned on university business to cash or goods and services, which have no university business purpose.
ISU Position on use of Frequent Flyer miles
State
of Iowa Policy on Travel Related Benefits
Federal Policy Related to Discounts and Rebates
ISU Position on use of Frequent Flyer
miles - ISU and the other Regent institutions have relied
on the honor system in past years, assuming travelers would apply
their Frequent Flyer awards toward future university travel. This
system will continue at ISU. However we now have reporting tools
available, which will provide departments with enhanced monitoring
of Frequent Flyer mile accumulations. Each of our contracted travel
agencies has the capability to generate reports by university
traveler showing the miles flown on University business. These
reports can provide departments with a baseline number of Frequent
Flyer miles that have been accumulated by departmental staff.
The reports do not show promotional miles, such as occur when
airlines offer double miles for trips to certain cities. These
reports will be helpful for departmental travel coordinators estimating
when travelers should be eligible for award tickets. Several airlines
participate in business partnering agreements, which allow travelers
to use miles from one partner toward an award on another. The
reports should also be useful in identifying opportunities to
combine miles for free or reduced cost travel.
Purpose - This web site provides the links to airline Frequent Flyer policy pages and a short synopsis of redemption policies for each airline. In addition, information has been provided on state and federal guidelines, concerning ownership of Frequent Flyer miles. With departments' assistance, our goal is to create an environment where it will be possible to redeem a reasonable percentage of Frequent Flyer miles acquired with University funds. We will continue to rely on the honesty of our faculty and staff and ask them to identify when they have accumulated sufficient miles to merit an award. Through enhanced reporting, departments will also have this information, providing a mechanism for scheduling awards and better determining how the awards should be utilized.
Caveats - Frequent Flyer miles may not be redeemed for cash or personal items. Departments should monitor the use of Frequent Flyer miles for upgrades to first class seats, particularly for domestic travel. Unless there is a valid business reason for upgrading, such as a medical condition, which has been coordinated with the departmental executive officer, upgrading reduces available Frequent Flyer miles and mortgages departments' future opportunities to obtain free tickets. First or business class travel using Frequent Flyer miles obtained with federal funds must be approved in advance by the granting agency.
Federal Policy on Utilizing
Discounts and Rebates
The applicable federal policy can be found at the following location: OMB Circular A-122, "Cost Principles for Non-Profit Organizations"
It reads:
5. Applicable credits. (Applicable to Frequent Flyer mileage awards)
a. The term applicable credits refers to those receipts, or reduction of expenditures which operate to offset or reduce expense items that are allocable to awards as direct or indirect costs. Typical examples of such transactions are: purchase discounts, rebates or allowances, recoveries or indemnities on losses, insurance refunds, and adjustments of overpayments or erroneous charges. To the extent that such credits accruing or received by the organization relate to allowable cost, they shall be credited to the Federal Government either as a cost reduction or cash refund, as appropriate.
Iowa Policy on
Travel Related Benefits
The State of Iowa policy is stated in the Department of Revenue and Finance, Pre-Audit Manual, Procedure No. 210.110. It reads:
1. Compensation from any source earned as a consequence of official travel belongs to the State of Iowa and MAY NOT be put to personal use by the employee or claimed for reimbursement when used during the course of official business for the State.
2. If it is determined that any items, which were received while acting in official capacity as a State of Iowa employee, have been used for personal use, the State employee will be expected to reimburse the State for the cost of the benefit.
American Airlines - Frequent Flyer Program is called AA Advantage. Miles may be transferred between travelers using the internet site. Frequent Flyer program policy and redemption levels and "specials" are also listed on this site. Partial awards for as little as 4,000 frequent flyer miles that reduce the price of tickets are available. Bonus programs are listed on this site.
America West Airlines - Frequent Flyer Program is called Flight Fund. Miles may be used to purchase a ticket for any person designated by the account holder, but miles cannot be transferred between individuals. Frequent Flyer program policy and redemption levels and "specials" are also listed on this site. Bonus programs are listed on this site.
Continental Airlines - Frequent Flyer Program is called OnePass. Miles may be used to purchase a ticket for any person designated by the account holder, but miles cannot be transferred between individuals. Frequent Flyer program policy and redemption levels and "specials" are also listed on this site. Bonus programs are listed on the site.
Delta Airlines - Frequent Flyer Program is called SkyMiles. Miles may be used to purchase a ticket for any person designated by the account holder, but miles cannot be transferred between individuals. Frequent Flyer program policy and redemption levels and "specials" are also listed on this site. Bonus programs are listed on the site.
KLM Royal Dutch Airlines - Frequent Flyer Program is called Flying Dutchman . KLM is a code share partner with Northwest. Frequent Flyer Miles may be used on the partner airline. Frequent Flyer Miles do not expire. Miles may be used to purchase a ticket for any person designated by the account holder, but miles cannot be transferred between individuals. Frequent Flyer program policy and redemption levels and "specials" are also listed on this site. Bonus programs are listed on the site.
Lufthansa - Frequent Flyer Program is called Miles & More . Lufthansa is a code share partner with United. Frequent Flyer Miles may be used on the partner airline. Frequent Flyer Miles do not expire. Miles may be used to purchase a ticket for any person designated by the account holder, but miles cannot be transferred between individuals. Frequent Flyer program policy and redemption levels and "specials" are also listed on this site. Bonus programs are listed on the site.
Midwest Express - Frequent Flyer Program is called Frequent Flyer. Miles may be used to purchase a ticket for any person designated by the account holder, but miles cannot be transferred between individuals. Miles may also be redeemed on NorthWest, SwissAir, Skyway and Frontier Airlines. Frequent Flyer program policy and redemption levels and "specials" are also listed on this site. Bonus programs are listed on the site. Mileage awards for Midwest Express may only be made directly with the airline.
NorthWest - Frequent Flyer Program is called WorldPerks . NorthWest is a code share partner with KLM. Frequent Flyer Miles may be used on KLM, Alitalia or Continental. Frequent Flyer Miles do not expire. Miles may be used to purchase a ticket for any person designated by the account holder, but miles cannot be transferred between individuals. Frequent Flyer program policy and redemption levels and "specials" are also listed on this site. Bonus programs are listed on the site.
Southwest Airlines - Frequent Flyer Program is called Rapid Rewards . Awards are based on trips flown (currently 16 to get a free ticket) and may be used to purchase a ticket for any person designated by the account holder, but miles cannot be transferred between individuals. Frequent Flyer program policy and redemption levels and "specials" are also listed on this site. Bonus programs are listed on the site.
United Airlines - Frequent Flyer Program is called Mileage Plus. Miles may be used to purchase a ticket for any person designated by the account holder. Miles may be transferred between individuals, however the transfer must occur at the airport counter or travel agency office. Miles may be used to award tickets on Star Alliance Partners such as Air Canada, Lufthansa, SAS and others. Frequent Flyer program policy and redemption levels and "specials" are also listed on this site. Bonus programs are listed on the site.
US Airways - Frequent Flyer Program is called Dividend Miles. Miles may be used to purchase a ticket for any person designated by the account holder, but miles cannot be transferred between individuals. Miles may used toward awards on partner airlines such as NorthWest, SwissAir, Qantas and others. Frequent Flyer program policy and redemption levels and "specials" are also listed on this site. Bonus programs are listed on the site.