US law used to prohibit federal employees from accumulating miles when traveling for work. The federal government found that this policy did not in fact save any money. And in December 2001 President Bush signed a law that allowed federal workers to accrue miles from their travel.
It’s very difficult for businesses and governments to make use of miles to offset the cost of business travel, especially under a regime where those miles are sitting in employee accounts.
- When passengers don’t keep the miles — unless they’re seeking elite status — they have little incentive to even accrue miles by putting their frequent flyer account number in their reservation.
- It’s cumbersome to sort through what miles in an account were earned for business travel, for personal travel, or for the myriad other things that one can earn miles for.
- It’s difficult to use reward points for business travel. When you’re a small business, spending your own money, you’re willing to trade off flight convenience for savings. But when you’re on someone else’s dime there’s usually little incentive to do it. So you rarely find just the right times.
- Frequent flyer tickets incur change fees (for most members) and require award inventory in order to make changes. Thus they’re less flexible, and most companies and governments aren’t accustomed to handling these fees in any case.
Even if the miles somehow sit in a company account, it’s difficult, as you need a travel arranger with some expertise in points to leverage them.
You’ll often see small companies make use of points, such as in a Membership Rewards account or Ultimate Rewards account earned via business spend. There’s a direct benefit to the bottom line and travelers incentivized to both save money and perhaps fly more comfortably in exchange for some flexibility.
And when you do see use of employee miles to offset business travel, while rare, it’s something that government’s are best-positioned to do because they can make it:
- Illegal for the passenger to accrue miles themselves
- Required that an airline pool miles in a government account rather than one for the individual
American Samoa did this with Hawaiian Airlines two years ago. (The Governor of American Samoa once threated to ‘ban’ Hawaiian Airlines – something he’s not empowered to do – due to their refusal to offer DigE Players on their Honolulu – Pago Pago service.)
The Australian government currently bans employees from accruing miles for official travel, so no one gets the miles (although employees do earn status credits). They’re considering changing that and demanding that miles go into a pooled government account which they think can save them AU$50 million per year by offsetting ticket costs.
The practical challenges of award travel notwithstanding, government fares currently exclude mileage-earning and future fares would include this marketing expense. There’s a reasonable chance that airlines will insist on higher negotiated fares in exchanged for this increased cost.
In the U.S., in contrast, some politicians turn their commutes into mileage runs.