SAN FRANCISCO (CBS.MW) -- Frequent-flier miles may represent the ultimate free ride, but it's getting harder for air travelers to get on board. When major airlines reduced their fleets to save money, they cut about 20 percent of their capacity. And fewer seats, combined with an increase in the number of miles' holders who earn points through ever-expanding rewards programs, means stiffer competition. "We're getting an increasing gap between supply and demand when it comes to the award side of frequent-flier programs," said Tim Winship, former frequent-flier program developer, and now publisher of FrequentFlier.com, a consumer-oriented Web site. "There are more and more opportunities for people to earn miles. Eventually these have to be redeemed for free flights, but there are fewer actual award seats to give away," Winship said. With many major carriers struggling to survive, it may be understandable that free seats are not a top priority. "One-in-five seats is now gone. The last thing they're going to do is give away free seats," said Addison Schonland, aviation consultant with PA Consulting. "If you were running an airline, it's what you'd do. It's the only way to preserve what you have." The airlines say reduced fleets mirror the reduced number of passengers. "Capacity has been reduced proportionate to the number of travelers," said Dave Castelveter, spokesman for US Airways. "There may be a shortage (of award seats) during certain times of the year, certain days of the week, but even before we reduced capacity, you faced the same situation."

Read the fine print

While there's good news for some frequent fliers -- for instance, US Airways' and United Airlines' miles will be interchangeable starting early next year -- there are also more restrictions. Some airlines no longer allow cheap-fare miles to count towards upgrades to first or business class, and others are planning to raise their reward levels, meaning more miles will be needed to fly free, Winship said. "It's a real balancing act on the airlines' part. They want to preserve the power of these programs to drive business, but they're looking for every way possible to save a nickel here and a dime there," Winship said. "They keep nibbling at the programs' attractive features around the edges, hoping that nobody will scream too loudly." Earlier this year, US Airways tried to reduce the fare types that would count toward upgrades, but backpedaled when customers howled in protest. Some say even the good news about frequent-flier programs isn't that good. Although some carriers recently eliminated blackout dates, it's difficult to book a free seat during the holidays that are normally blacked-out, according to a recent Consumer Reports study of frequent-flier programs. "It's an earning and burning thing. The earning part is easy. The burning part is hard," said Bill McGee, editor of the Consumer Reports Travel Letter. "For most people, particularly if you're working, certainly if you have kids, it's really hard to take advantage of frequent-flier miles. You have to have a lot of flexibility. You have to leave when the airline wants you to leave," McGee said. And in some cases, the price consumers pay to get the miles may not be worth it, according to the study.
"If you're flying on an airline and you're buying a lot of tickets on that airline to get miles, we found it can be cheaper to fly on a low-fare carrier and not even worry about the miles," McGee said.

Miles' programs here to stay

But frequent-flier programs are here for the long term. For one, airlines make money selling miles to their marketing partners, Winship said. "This is an area of real profit opportunity for the airlines, to expand these networks of mileage partners," he said. And customers continue to get their free flights. Eight percent of domestic airline passengers flew for free in the second quarter this year, compared to 5.7 percent in the fourth quarter of 2001, and 4.9 percent in the first quarter 2001, according to the federal Bureau of Transportation Statistics. "The genie cannot go back in the bottle," said PA Consulting's Schonland. "It's huge. You get miles for everything. I don't see it ever going away. It's like another form of currency. How are you going to stop people doing this?"