200,000,000,000 miles...

That's how many points Aeroplan members now have banked, waiting to be cashed in for free travel or goodies.

As Canada's largest airline reward program celebrates its 25th anniversary, it's a sign of how things have changed since 1984 - and how the world of loyalty promotions is in flux.

All those miles are owned by four million members, just a few of the many travellers around the world today who love to amass points (while still complaining about the programs at every opportunity). And in the current recession, travel rewards are a strange commodity. Some members are spending them like crazy; others are hoarding them.

"A customer who saved points for free flights might say, 'I've got a chance to buy fares cheap, so I think I'll take advantage of that. When fares go up, I'll use miles,' " says Rick Ferguson, editorial director of loyalty-marketing publication Colloquy.

On the other hand, Ferguson says, some consumers - trying to save money - are cashing in points for luxuries they can no longer afford. That includes many members of Air Miles, the Toronto-based frequent-buyer program, and Priority Club, operated by InterContinental Hotels Group. "Loyalty programs let you do the calculations and decide," he says.

Some make more calculations than others.

Deal-seeking business travellers, for instance, make more work trips in December than in any other month, according to data from Aeroplan. The reason: Dec. 31 is Aeroplan's cutoff date for earning enough "qualifying miles" in one calendar year to achieve Super Elite status with Air Canada for the next 12 months. At Air Canada, Super Elites are royalty. They get airport-lounge privileges, priority check-in and, most of all, opportunities to upgrade to the front cabin on future trips. Says Aeroplan's chief executive officer Rupert Duchesne, "We see people who make one trip a month to New York for the whole year making three trips in December to qualify."

Then there are those who try to game the system. California engineer David Phillips took full advantage of a supermarket promotion in 2000: He earned enough airline miles for years of free travel by buying more than 12,000 cups of Healthy Choice chocolate pudding. His story inspired a plot line in the movie Punch-Drunk Love.

In Canada, a crafty group of business travellers, dubbing themselves the Mexican Hat Dance Club, took advantage of an Air Canada loophole and detoured their work trips through Mexico for cheap fares and a bonanza of miles. And Cleveland marketing man Steven Belkin hired people to take short flights within Thailand.Under a signed contract, they turned the miles earned - about four million of them - over to Belkin's Aeroplan account.

Aeroplan doesn't mind being taken advantage of once in while. The plan lost money on Belkin, but his exploits brought media attention and spurred interest by other members, Duchesne says.

"That's part of the fun," he says.

"We'll get 1,000 people jumping in. It creates a kind of behaviour that locks people in."

These days, plan members are behaving in unpredictable ways. While some plans are experiencing a rush of redemptions, Aeroplan says members are keeping their miles and taking advantage of cheap fares.

"There are airline seat sales on and people are hoarding the miles," Duchesne said after the release of the company's figures for the end of 2008.

Travel operators know they will need to beef up their plans if they want to keep valued customers in a time of reduced spending.

"Airlines and hotels have a long history of doing this," Colloquy's Ferguson says. "They've been through similar periods in the past. After 9/11, they used loyalty programs to keep the relationship going with their best customers."

So new perks and fewer conditions have become the order of the day. For example, at least three hotel chains have eliminated blackout days for reward claims.

Despite the current dip on Aeroplan's balance sheet, Duchesne says loyalty programs are too important to both consumers and marketers for them to disappear. "I'd be stunned if they don't still exist 50 years from now," he says.

A quarter-century ago, nobody expected such programs to last at all.

The world's first frequent-flier program was intended as a short-term promotion when American Airlines launched it in 1981. Other U.S. carriers copied the idea, and the rest is history.

Canadian regulators initially prohibited airlines here from joining the game, but when the rules changed Air Canada launched Aeroplan - one day after its rival CP Air (later Canadian Airlines) announced a similar program.

Last year, on average, Aeroplan issued rewards 5,500 times a day, or once every 16 seconds.

And other programs have grown at a similar rate. Air Miles has issued more than 34 billion reward miles and recorded more than 42 million redemptions since its inception 17 years ago.

Loyalty programs work because of two basic human characteristics, Duchesne says. One is hoarding behaviour, rooted in caveman days; the other is the instinctive desire to get something for nothing.

Herve Collet of Calgary, an Aeroplan member from Year One, agrees. "It would be nice if it wasn't a case of the only flights available [for redemptions]being from Calgary to Regina," he says jokingly.

Still, he calls himself a big fan of Aeroplan. "It's kind of like Air Canada is saying, 'Thanks for coming with us. Have a freebie on us.' "

Airlines and other corporations recognize that sentiment, that desire to be treated well.

Loyalty programs are important after all, providing a source of revenue and a mechanism for recognizing, and ideally holding on to, their best customers.

But the No. 1 benefit for the company is the data collected. It lets them track the travel, spending habits and lifestyles of each individual member. Air Canada uses this information to set its fares and schedules.

"Someone known to live in an upscale area of Montreal and known to go on vacation a couple of times a year could be sent an e-mail for Air Canada Vacations," inviting them to travel south, Duchesne says.

So, if you receive a travel promotion that interests you, it's not a coincidence. Your plan knows where you want to go before you do.

Matching points...

With so many loyalty cards in so many pockets, it was only a matter of time before companies sprang up to help consumers take advantage of points that might never be used - for a fee. Two Ontario-based websites - Points.com and LoyaltyMatch - offer collectors a variety of services, including moving their points from one loyalty program to another or trading them in for cash.

...and trading tips

Long before Twitter and other social networking sites kept people in constant contact, frequent-flier junkies were complaining and sharing tips around the clock at flyertalk.com. Launched in 1998 by Colorado-based Randy Petersen, the site has had more than 10 million postings from members of the world's biggest travel and credit-card reward plans. The site's Aeroplan section alone has registered nearly half a million postings. But one group of Canadians felt they weren't welcome on FlyerTalk, so they broke away and started their own site:

CanFlyer.com.