Legal Judgement Extends Expiration of Award Miles to 30 Years?

T he Oberster Gerichtshof — which is the Supreme Court of Justice in Austria — upheld a decision from a different court in May of 2016 and ruled in favor of all aspects of a lawsuit which opposed the practice of miles being no longer valid for use after a period of 20 months if a member of a frequent flier loyalty program does not engage in an activity which extends the expiration date.

Legal Judgement Extends Expiration of Award Miles to 30 Years?

The policy of KLM Royal Dutch Airlines pertaining to award Flying Blue miles for Ivory status level members never expiring as long as a qualifying flight was taken at least once every 20 months was legally challenged by the Verein für Konsumenteninformation — also known as VKI — which is the association for consumer information in Austria that argued that the jurisdiction for vouchers also applies to frequent flier loyalty program miles as well.

The result of the verdict supposedly means that miles are required to be valid for no fewer than 30 years, according to this article from Europakonsument, which is part of an organization of the European Commission that dispenses help and advice to consumers in Europe; and the airline is not permitted to adjust the expiration date of those miles to less than that period of time.

If you have earned bonus Flying Blue miles from KLM Royal Dutch Airlines which have since expired, “you can protest by referring to the verdict of the HG Vienna” — specifically, case 39 Cg 43/14p from Tuesday, October 13, 2015, according to the aforementioned article.

Debate by Frequent Fliers

The understanding by FlyerTalk member NickB of this case “is that the 20 months limitation is unlawful under Austrian law because of gross disparity between the obligations of the respective parties in breach of Article 879 of the Austrian Civil code. In other words, the 20 months limitation would be disproportionate. An ancillary issue is that the lack of transparency of the clause, in that it does not identify what are ‘qualifying activities’ that stop the clock running.”

FlyerTalk member KLouis argued that “Nobody is forced to become an FB member. As a matter of fact, there is a big choice of FF programs and the T&C of each one is clearly accessible for reading before one decides to join such a programmme. I also hated it when I had to take a no-real-purpose flight a month ago in order keep my miles, but I joined FB (or, to be precise, FD) knowing that they had certain rules. Heck, I earned more than one million miles in the years before I switched alliances and I was glad to see that my ‘new’ *A miles did not expire. But going to court and sueing FB because I don’t like their rules, well, I find it strange and I find the court’s decision even stranger.”

This decision is not legally binding, according to a translation of this article from Die Presse.com by FlyerTalk member casagrandino: “the decision is NOT legally binding. The OLG (court of a state) has permitted a revision by the OGH (supreme court).”

Summary

What remains to be seen is if this legal judgement will have any impact or precedent amongst members of frequent flier loyalty programs worldwide. Assuming that this is the final ruling, would having the miles of a member of the Flying Blue program from Austria remain valid for up to 30 years be fair if the miles of a member of the Flying Blue program from a different country — such as the United States, for example — expire in only 20 months if there is no activity? Will other countries follow suit; or will the airlines which maintain their frequent flier loyalty programs adjust their policies accordingly and consistently worldwide?

Irrespective of the perceived value of SkyMiles, Delta Air Lines set an example for frequent flier loyalty programs when it was announced in February of 2011 that SkyMiles no longer expire, regardless of activity. While that does not particularly affect frequent fliers — whose constant activity usually keeps the frequent flier loyalty program miles from expiring, typically within 18 months — it is nice to know that there is one less thing about which to be concerned if something happens and frequent fliers temporarily need to stop traveling for a significant period of time.

Extending the expiration date of miles and points in many frequent travel loyalty programs is rather easy — and there are tools to help keep track of them — but although I do understand some of the reasons why, I have long questioned the sense of the expiration of frequent travel loyalty program miles and points.

Photograph ©2015 by Brian Cohen.

3 thoughts on “Legal Judgement Extends Expiration of Award Miles to 30 Years?”

  1. Ben O says:

    Of course it’s a way for the frequent flyer program to write off the liability from their books. While I don’t disagree with the Austrians court ruling I think a fair approach would be around 5 years expiration. Considering the probable devaluation over 5 years I’m not sure if it would be a big hit to the FF programs anyways,

  2. Al says:

    Delta is smart. They encourage people to hoard miles which become less and less valuable as time goes by. A few years go, Delta would charge 12500 miles for most domestic flight. Now the new normal is 32000 miles. In a few years you may need 100000 miles for most domestic flights.

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