Tickets for Sale, Cheap

At least 7 million travelers participate in airline frequent-flyer programs in the hope of racking up enough mileage to earn free tickets to exotic locations. Yet roughly half of such customers fail to use the awards they receive. As a result, these coupons have become a hot new commodity, bought and sold by at least a dozen upstart brokers. The secondhand awards often present a sizable saving for the purchaser, even after the broker has taken a 20% to 40% commission. For instance, one broker was recently offering roundtrip, first-class tickets from New York City to Los Angeles, normally $689, for $388.

Ticket Trader Donald McLarty of San Francisco got the idea for his U.S. Coupon Exchange in 1982, when a fellow traveler sold him a round-trip ticket to Hawaii for $100. Brokers like McLarty generally attract buyers and sellers through classified ads and then match them according to destination. Coupon selling is technically legal, but airlines differ in their attitude toward it. While American Airlines strictly forbids trading and Eastern plans to clamp down on the practice, Delta generally looks the other way.