The Most Bizarre, Draconian Frequent Flyer Policy is Being Eliminated

The single strangest policy of any frequent flyer program is being eliminated.

Some programs have expiring miles (for instance, miles earned today will expire in 3 years if unused). Other programs have expiring accounts (accounts will become inactive if there’s no earning or redemption within 18 or 36 months). In either case, activity in your account can extend the life of your miles or in the extreme only some of your miles will expire on a given date.

One airline has had a policy far more draconian than either of those things.

Alitalia MilleMiglia doesn’t have expiring miles. They have an expiring program. In fact, up until yesterday’s announcement by the airline the current program was expected to expire December 31.

Here’s what their program rules said about the Alitalia ‘2013-2015 program’.

“MilleMiglia Program” or “Program” means this rewards program whose purpose is to promote loyalty among Promoters’ customers, and which is effective from January 1, 2013 to December 31, 2015, unless extended.

…5.19 This rewards scheme enables Miles to be earned until December 31, 2015, subject to any Program extensions (see Art. 1.1). Rewards may be claimed by Members until June 30, 2016, and will be awarded to the rightful owner within a maximum period of six (6) months of the end of the scheme (i.e. by June 30, 2016) pursuant to Presidential Decree no. 430 of October 26, 2001, with the exception of Rewards that must be delivered to the Member’s home, in which case the regulations specified on the pages relating to such initiatives on the website www.alitalia.com will apply. Miles earned before December 31, 2015, which have not been used by June 30, 2016, will be deleted from the Member’s personal account, subject to any Program extensions.

Each Alitalia accrual program is separate. Even totally active accounts used to lose all the miles when the program ends, although Alitalia offers a mechanism to extend the miles (really, to credit miles from the previous program to the new program). That’s required, in the past, flights credited to the new program within a specified period of time.

Alitalia is a quite useful American Express transfer partner but the expiring program was a real reason not to transfer points speculatively, only points you’re going to use in the immediate term.

Alitalia MilleMiglia finally has taken a more consumer-friendly approach to the expiring program requirement.

  • The program won’t expire until August 2016

  • When the program does expire and the new program is introduced, all miles will be transferred to the new program without members having to do anything.

What that really means is there will be some program changes coming in August, but members won’t lose their miles as they have in the past. Thanks, Etihad!

Etihad is the latest airline to light money on fire become a deep pocket for Alitalia because it’s apparently more important to funnel traffic through Abu Dhabi than to actually make money.

Alitalia and Delta are partners in an immunized joint venture across the Atlantic. So while the US airlines are specifically worried about competing across the Atlantic with Middle East carriers, Delta is sharing revenue across the Atlantic with an Etihad venture. Etihad’s flights are only a problem when Delta isn’t sharing the revenue from them.

And yet Etihad’s control may actually be making the Italian carrier more rational.

I’ve been wondering how they manage this shift. Alitalia has always explained their expiring program as an artifact of Italian law. And indeed the program will expire, a new program will replace it, but it will have the same name and members will have the same mileage balances — without some trigger activity in the new program like a flight to recoup miles.

The messaging, though, is sort of bizarre:

The MilleMiglia Program is renewed to become even more loyalty program tailor-made for you, since you are the protagonist of every trip.

We are working hard to increase and facilitate opportunities for you to earn and use accrued miles, as well as to provide additional benefits for Members of the Exclusive Clubs, and we want to give you immediately a tangible sign of this change.

I wouldn’t accumulate Alitalia’s miles until they release what the changes to the program are going to be. But at least miles won’t go away when the program goes away!

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Under the old business model Alitalia ran what could fairly be called a “frequent program”.

  2. You don’t understand the structure here.

    Under Italian law, companies cannot change the terms of any type of consumer prize program once established, and such program cannot last more that 5 years. The basic tenet of the law is that you cannot deceive customers with devaluations or other similar sophistry: once the program terms are public, they cannot be changed in a way that hurts consumer for the entire duration of the program. For example, increasing the number of miles required to pay for a flight (a “prize” in Italian law) is not allowed so that consumers cannot be defrauded retroactively (a pervasive fraud in other parts of the world).

    What happened here is that in 2012 Alitalia had to say: we certify that for any miles you earn between 1 January 2013 and 31 December 2015, we will NEVER INCREASE the number of miles needed for a flight/hotel/whatever and you will have until 30 June 2016 to redeem them at the current rate. After that, we will see (and yes, Alitalia did the wrong thing in the past by not simply rolling all the miles over, as it’s doing today under Etihad’s leadership).

    You can read more about it at https://it.wikipedia.org/wiki/Concorso_a_premi and http://www.sviluppoeconomico.gov.it/index.php/it/?option=com_content&view=article&idmenu=944&idarea1=556&andor=AND&idarea2=0&sectionid=2,10&showMenu=1&viewType=0&showCat=1&idarea3=0&idarea4=0&andorcat=AND&partebassaType=0&idareaCalendario1=0&MvediT=1&id=2016511&directionidUser=0

  3. GarudaMiles account holder must literally pay for the privilege of redeeming their miles as the airline imposed a $20 service fee to issue an international redemption ticket or IDR 100K to issue a domestic redemption tix. Worst of all, this provision is buried deep in the fine prints while outwardly the program continues to advertise “free” flights to the general public.
    It’s nothing short of a scam.

  4. @jay – that’s pretty great for consumers, since redemption rates are always going up save during a financial crises.

  5. Nice article but I think it missed the point. Italian law doesn’t allow frequent-whatever programs to last forever, and that affects Alitalia’s MilleMiglia program as well.

    Etihad has recently acquired about 75% of the program so that may be the reason why Italian laws may no longer be applicable.

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