Northwest Airlines refuses to help the University comply with a state statute that requires that all frequent-flyer miles earned through University-funded travel be utilized only by the University.
The state law, which went into effect in 1993, states that benefits and credits earned from business travel paid for by a public entity must be returned to the organization for institutional use.
The University spends $18 million a year on faculty and staff travel, and almost half of the University’s travel budget is spent on airfare. Northwest Airlines receives about 83 percent of the University’s air travel budget — almost $6.9 million.
The University Board of Regents at Thursday’s Financial Operations Committee meeting expressed collective outrage at Northwest Airlines’ refusal to set up one account to collect all the frequent-flyer miles the University earns.
Karen Triplett, executive assistant for purchasing at the University, told regents that the concept of using frequent-flyer miles to save on travel costs is slipping through the cracks.
The problem is that frequent-flyer miles are being distributed to staff travelers instead of directly to the University, she said. Currently, the University does not have a comprehensive system to insure that all frequent-flyer miles earned with University funds are returned.
Regent Julie Bleyhl, chairwoman of the Financial Operations Committee, said the present system depends on self-enforcement, and less-than-honest people may take advantage of the situation by putting frequent-flyer miles accumulated on University-funded trips to personal use. Bleyhl recommended that one account be established in which all University miles would accrue.
“We’ve tried to negotiate with Northwest,” said Triplett of discussions about setting up a single University account. “They were not cooperative.”
Triplett said Northwest Airlines officials told the University the purpose of the frequent-flyer program is to develop individuals’ loyalty to the airline, and giving frequent-flyer miles to the University would defeat that purpose.
Northwest Airlines officials could not be reached for comment.
Regents’ Chairman Tom Reagan said perhaps the University should see if United Airlines is more willing to collaborate with the University.
“You would think they would want to cooperate with the University,” he said of Northwest Airlines.
Northwest Airlines can keep track of numerous single accounts for University travelers, but can’t manage to keep track of one account for the University, Regent Wendell Anderson said.
A system in which frequent-flyer miles are accrued in one account is not unheard of, Regent William Peterson said. A major Minnesota company is already using a similar system, he added.
Anderson assured Triplett that she has the regents’ support for further negotiations with Northwest Airlines to settle the problem.
Regents also expressed concern about staff who use businesses outside the University’s “preferred” network of travel agencies to book trips, and then turn in their tickets for reimbursement.
The University has negotiated contracts with its preferred agencies, which, in turn, provide discounts for University staff members and guarantee the price paid for airfare is the lowest available. There are currently four preferred University travel providers — Carlson Wagonlit, Northwestern Business Travel, Travel Associates and AAA Minnesota Travel Agency — and another four are expected to be added by the end of July.
Regent Patricia Spence suggested a mandate on University business travelers to use one of the preferred providers. Barring any legal reason the University couldn’t restrict use to preferred providers, the board will move as quickly as possible to pass the resolution.
Recent University Law School graduate Charles Roehrdanz, an outgoing student representative to the Board of Regents, said he thinks the plan will be accepted. “If the University can contract exclusively with vendors like Coke,” he said, “I see no reason why the University can’t mandate this.”