Air Miles – a great idea. The more you fly, the more free miles you earn. And to top it off, even trips to Tesco or your local restaurant can add air miles, providing you use one of your credit cards that gives rewards. You can even use your Tesco Clubcard, now to collect air miles.

But the airline business has changed drastically since Texas international Airlines first came up with the idea of a frequent flyer programme back in 1979, followed by American Airlines in 1981. In those days, and the years that followed it was unusual for any major airline not to have some sort of loyalty scheme or reward for passengers.

Today, most airlines will offer you some sort of incentive for continuing to use their service. As of January 2005, a total of 14 trillion frequent flyer miles had been accumulated by people worldwide, corresponding to a total value of 700 billion US dollars.

But two events have changed the market and the value of air miles. Firstly, the huge popularity of budget airlines like Ryanair and Easyjet have opened up the skies for more flyers and the chance to visit places for sometimes less money than it takes to take a train to Brighton and back. Yet ‘no frills’ means just that. No points, no air miles and nothing more than the promise of a low cost flight to maintain loyalty.

Secondly, and more importantly, the actual cost of an airline ticket can pale into insignificance compared with the huge add ons of Air Passenger Duty, fuel surcharges and all the other extras. And that is the real rub. If you want to use your air miles, say, 5,000 miles, they will only be offset against the true cost of the ticket, minus any surcharges. So you don’t save that much.

The real winners in the Air Miles race are Business Travellers. Frequent travellers, using the more traditional airlines around the world, can really benefit. This is especially true if their airlines belong to one or more of the Alliances, such as One World. For example, One World  includes among its members   BA and Qantas, so what you earn on one you can use on another. But not all airlines have alliances. Some, for example, like Virgin have co-sharing arrangements with other airlines concerning flights. So although you may book a Virgin flight you may find yourself travelling on Continental. No matter, you can use your airmiles on both.

Credit cards

On top of this, several airlines offer their own credit card, with varying rates of interest but with the added incentive of earning extra airmiles. With the Virgin Atlantic American Express card, you get  3,000 flying club miles on your first card purchase and, thereafter, 1 mile for every £1 spent. With BMI there is the promise of 20,000 destination miles if you apply for the card and spend on it within 90 days of the account opening. BA offers 3,000 bonus BA miles when you send £500 in the first three months of owning the  BA American Express credit card, while the premium plus version gives you 18,000 bonus BA miles when you spend £3,000 in the first three months. But all these offers are subject to change or are extended offers.