Called Membership Miles, the program will allow AmEx cardholders to earn frequent-flier points on seven different domestic airlines and 24 affiliate carriers. Points can also be credited toward travel packages and a changing roster of activities it calls “once-in-a-lifetime experiences.” (Among the first such offerings are a stay at a medieval castle and tennis lessons with champ Ivan Lendl.) AmEx will award one credit for every dollar a cardholder spends - using any of five varieties of AmEx cards, including the Optima and the small-business Corporate Card. Free the first year, membership will cost $25 the second year. “It’s not an original program, but it almost immediately makes American Express the premier affinity card,” says Randy Petersen, publisher of Frequent, a newsletter for frequent fliers.
AmEx is banking on Membership Miles to help woo customers who have been leaving home without it. In April, the company’s Travel Related Services arm, which handles its credit-card business, announced a first-quarter profit dip of $53 million from the same period last year. The report came on the heels of a protest by restaurateurs, who complained that the transaction fee AmEx charged them was higher than the percentage Visa and Mastercard generally charge. While experts say Membership Miles will be costly for AmEx, “They need something to jazz up interest in their cards,” says H. Spencer Nilson, of the Nilson Report, a credit-card industry publication.
Unlike other affinity programs, the AmEx plan will give consumers a wide choice of airlines. Enrolled members could use credits on Delta, Northwest, Continental, Southwest, MGM Grand Air, Pan Am and Midway. The members can count dollars charged on several varieties of AmEx cards toward a single account, including those used by spouses and family. But membership has its limitations. It is not available to holders of large-company corporate cards, though AmEx officials say the program is being test-marketed in that segment. And it does not include the two largest U.S. carriers - American and United, which have their own programs through banks. Some analysts bet the public won’t care. “The greed factor is much stronger than brand loyalty,” says Frequent editor Petersen. If it’s a free trip to Hawaii, few people worry about how they get there.
