[MartynSinclair]

Ekond222 – you are not entirely correct. It is permissible to use the address of your office for FF memberships.., wherever that may be.

As for discarding the last leg of an ex Europe trip… I agree with you.

If you are considering buying Airmiles from a 3rd party broker, best to check with the airline concerned.

[peter19]

I cant remember if seeing sky lux in my mailbox made me laugh this morning or sigh..i think it was both..and in that order!

How much do you think they would buy/value 2nd hand effectively miles for??

[malbarda]

Thanks Pedro01. Other than posting the response twice (!) I think I can follow your argument. Interesting!

[Pedro01]

Sorry, I wanted to delete one version of my reply but somehow now I deleted both. Will try to post it again. Peter

[Pedro01]

Uunfortunately I can’t retrieve the post that I unintentionally deleted, but here is an abbreviated version:
1. I am not sure any terms and conditions are violated. United’s TCs for instance allow redemption of miles for third parties on the one hand, but prohibit the transfer of award tickets for money on the other. I would argue that the practice we are discussing is not a transfer of an award ticket, but the redemption for a third party, which is allowed.
2. In any event, it is not the flyer, but (if at all) only the member who uses his miles, who would violate the TCs. The flyer doesn’t even have a contract with the airline.
3. This is not a question of “illegality” in terms of criminal law, we are just talking about an ambiguous interpretation of TCs.
4. If airlines wanted to abolish this practice, they could simply prevent members from redeeming their miles for third parties, which they don’t. And that leads me to believe they have no issue with this.
Cheers! Pedro

[malbarda]

Pedro01: I though your argument about two different specific clauses you detailed, and which seemed to contradict each other somewhat, made for an especially interesting argument, which got lost a little when you tried to remedy your double posting. You referenced them specifically, and explained how they contradicted or could be interpreted.

I also thought it would be good to reiterate that you are a lawyer 🙂

[travelworld2]

Well, Pedro 01. All you have to do is to ascertain from the airline if they permit the sale of their frequent flyer miles through brokers such as Skylux. If they confirm in writing that they have no problem with it you are in the clear. What you’ve said you’ve done is ask Lufthansa if there was any problem with Skylux. They told you they had never heard of them. That’s not the right question to ask- and it’s an answer which, as a lawyer, you will know gives you no comfort whatsoever.

[MartynSinclair]

Pedro01…. please do publish the answer…….

Once you have the answer, call your travel insurers and ask them whether you are insured for tickets purchased via the grey airmiles market….

[MartynSinclair]

Pedro01…. please do publish the answer…….

Once you have the answer, call your travel insurers and ask them whether you are insured for tickets purchased via the grey airmiles market….

[Pedro01]

Hi, let me try to respond to TravelWorld and Martyn Sinclair collectively.

I called LH only to determine whether SkyLux might be on some sort of “black list”. They are not and that gave me some comfort in that apparently nobody had yet reported negatively to LH about them, not more, not less.

I am not interested to find out from the airline what their interpretation on an ambiguous clause in their terms and conditions is. Why should I do that? If you have a question about an ambiguous contract clause, do you call the other side to find out what they think and then adhere to their view? Or do you get to your own conclusions and get comfortable with them (or not)? I do the latter. The airline is not a legal authority, none whatsoever. The only applicable legal authority in these cases are the terms and conditions for the miles programs and, if there exist, any court cases (which I haven’t found yet).

So, let’s look at the terms and conditions. I looked at the ones for United (you can look them up online by simply googling United Miles terms and conditions), but I assume they are all very similar: Section 30 of the TC states very clearly that any member can redeem miles for the member “or any other person”. Section 30 includes no restriction. So, I could redeem my miles tonight for a ticket for MartynSinclair, if I wanted to. That’s perfectly acceptable.

However, Section 8 states that the “sale or barter or attempted sale or barter of any such mileage, certificates, awards or benefits other than as authorized and/or sponsored by United is expressly prohibited”. I guess the view of MartynSinclair and Travelworld is that Section 8 simply trumps Section 30, meaning that if I redeem miles for a third party ticket and get money in exchange (through a broker), then I am in breach of the TCs. That’s not an unreasonable, albeit conservative view. The problem with it is, however, that Section 30 doesn’t say that. More importantly, read Section 8 carefully, it says: “other than as authorized … by United”. I think the correct view therefore is to say that Section 30 expressly provides such an authorization. Accordingly, it does NOT violate Section 8 to get money in exchange for redeeming miles for a third party. All that is prohibited is to transfer miles or transfer an award ticket that has already been issued to the member. But that’s not happening here.

Now let’s say you still find this is all too ambiguous, then the clear legal principle with respect to interpreting terms and conditions is that any ambiguity goes to the detriment of the one who drafted them. There was another lawyer here on the blog, and I am sure he can confirm that principle.

So, while you guys just simply state that there is a violation of the terms and conditions in play, as shown, I really doubt that. In fact, let me go a step further. If an airline denies boarding to a passenger who has obtained a ticket through SkyLux, I would take the position that the airline (not the miles member or the passenger) is violating its own terms and conditions and might be subject to liability.

The airlines would have a very, very easy way out of this dilemma. They would simply have to prohibit members from redeeming miles for tickets for third parties, or they could limit this to family members, or they could expressly say in Section 30, that if you redeem miles for a third party, you are prohibited from taking money in exchange (although that’s very difficult to verify of course). The airlines don’t do any of this, presumably because they want to get rid of miles asap, since they constitute huge liabilities on their financial statements.

Although I am quite comfortable that there is no breach of TCs here, let’s say I am wrong. OK, so what does that mean? First, this is not illegal in terms of breaching any laws (although I read the other day in Utah there might be a problem, so stay away from this if you live in Utah). Second, in terms of breaching TCs, the only person who might be in trouble is the person who is redeeming the miles, not the flyer. The flyer doesn’t do anything and is probably not even a member and the terms of conditions don’t apply to him.

Now some practical considerations:

First, I have pretty much read the entire blog last night and I saw only ONE negative experience report with AA in China. I don’t know the circumstances, but I saw probably ten or so positive experience reports (although the ones how reported a positive experience, including myself, were immediately beaten up as some sort of spies for SkyLux, which I am sure (and in my case I know) were wrongful and completely unsupported allegations).

Second, in my experience, you have no contact with the airline whatsoever. You get your ticket from SkyLux, then you can log into your ticket information online and get your boarding pass 48 hours (or 24 hours, I forgot) in advance and go straight through security to the plane (after drinking a nice beer in the lounge). How anybody should be able to identify you in that process as one of those “mean” SkyLux ticket holders is beyond me.

Now let’s say, like the poor gentleman in China, the airline somehow identifies you and denies boarding (as I said, in my view in violation of their TCs), then that’s indeed tough. You probably won’t be able to get an injunction before the plane takes off to force the airline to let you on board, so I guess you are left with buying a full fare ticket (in my case that would be economy class, since I am not paying business class full fare). Then you contest your credit card charge with SkyLux and have your money back in 24 hours. That’s pretty much the worst case scenario. No mean Sheriff of Nottingham will show up and throw you into jail. No DA in this country is even remotely interested in any of this.

The upside for this minor risk (in my view actually non-existent risk if I already have a boarding pass in my hands) is that I get a great flight for less than half price, a real money saver!

Then there was the question about calling the insurance.
First, I don’t use travel insurance.
Second, again, why should I call an insurance company?
The insurance company will probably take a conservative view and not touch this (although again, I have not found out). So, if you absolutely only travel with travel insurance, you should probably stay away from this. I personally think travel insurance is really a scam (not illegal or anything like that, just doesn’t make any economic sense from a cost benefit point of view).

Then there was the comment about publishing this. Well, I guess that’s what I am doing right here, so I don’t understand the comment. However, it might be a nice idea to bring this into a law journal. The airlines will be excited! I will consider that, but that will take time.

Finally, I guess between the lines I am reading some ethical concerns from you. I don’t think those are justified. The airlines are not damaged. The miles are out there and how could using them constitute a damage. Society is not harmed. In fact, the more I think about this, I think these guys at SkyLux have a pretty brilliant concept to make the most economic use of outstanding miles, what’s so bad about that?

This sort of intellectual exercise is fun:)

Cheers,
Pedro

[SimonS1]

I’m sure it will be fun for the sucker who gets pulled at the airport and loses/misses their flight.

But hey oh, each to their own, personally I wouldn’t take the risk (or the long layovers that appear to be a feature) but it’s a matter of personal preference.

[Charles-P]

Out of curiosity I called Lufthansa and asked their position with regard to this type of organisation, their response was unambiguous. They would not honour a ticket bought via this method.

Wondering if this was unique I also spoke to Air France and their response was the same, in fact they said they have only recently refused a passenger who booked with a similar company.

[travelworld2]

Pedro 01’s belief is that there is no breach of the T and Cs because the frequent flyer member is “redeeming them….for any other person.”
But he’s not. He’s selling them to Skylux.

As Simon S1 says, each to their own….

[christopheL]

Does anyone know how the sale of miles from an individual to Skylux is possible as a transfer of miles from one account to another is either forbidden or subject to a fee ?

[travelworld2]

I’m guessing that the miles aren’t actually transferred- the seller of the miles gives Skylux access to the account and they then book the ticket in the name of the purchaser.

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