The Pudding Prince of Frequent-Flyer Miles

By Steve Lopez/Davis

Things took a strange turn in the Phillips household last year when David, a civil engineer at the University of California at Davis, turned to his schoolteacher wife Cindy and said with disquieting urgency, "I'm going to go to the bank and get some money. We have to buy as much pudding as we possibly can."

Phillips had stumbled upon one of those frequent-flyer promotions in which airlines team with credit-card companies and other partners. The deal, since withdrawn, was this: buy 10 Healthy Choice products and get 500 miles--or 1,000 miles for purchases made before June 1999. Phillips tossed soup and popcorn into his basket like an end-of-the-world fanatic, but went apoplectic when he saw chocolate-fudge pudding cups at 25[cents] a pop. A mere $62.50 worth, he quickly calculated, would buy 25,000 miles.

"Being a geeky engineer, I came home and put everything into a spreadsheet," says Phillips, 35, who had spent five years saving miles to fly Cindy and himself to Europe. With this deal, they could take their two daughters along, and so within days he had cleaned out every supermarket chain in the Sacramento area, unable to stop himself until he had bought practically enough pudding to fly business class to Mars. In the end, he had spent $3,000 on 12,150 cups of pudding, accumulating 1.25 million miles. (He also donated most of the pudding to charity, qualifying for an estimated $800 tax break.)

There is, unfortunately, no equivalent of a methadone program for frequent-flyer junkies. So Phillips--known to the entire airline industry as the Pudding Guy--got itchy last month when he spotted a deal called Latin Pass, which offers 1 million miles for flying 10 Latin American airlines and completing several other requirements by July 1. "It almost pencils out to a better value than the pudding," says Phillips. He visited six countries over three days in February, but hit some turbulence when Cindy found out Mr. Spreadsheet was lounging like James Bond on a Bonaire beach during a layover while she was home doing laundry. "I think it's still negotiable," Phillips told TIME after being grounded temporarily.

"Miles are the global currency right now," says Jim Davidovich, who runs United Airlines' frequent-flyer program. "It's not the euro, it's the mile. And it's hot." So hot that Randy Petersen, who began InsideFlyer magazine as a one-man operation in 1986, now has 32 employees and several websites, including Flyertalk.com This is where you go for buzz on the best promotions and the boasts of frequent flyers who make Phillips look bush league. "There's one guy out there with 13 million miles," Petersen says.

But no one is making out like the airlines themselves. Why? "Because we sell the miles," says Bruce Chemel, president of American Airlines' frequent-flyer program. "Healthy Choice, Citibank, Hilton and Avis are all buying little pieces of the ticket." Partner companies pay about 2[cents] a mile, which can add up to more than an airline makes on a straight round-trip sale. "They're not giving anything away for free," says Petersen, who estimates a $2 billion windfall for the airlines in 1999. Still, Petersen says, no more than 15% or 16% of the seats on each flight are available to reward flyers unless they pay 40,000 miles rather than 25,000.

Not a problem if you plan ahead, says the Pudding Guy. Phillips, who manages utilities at UC Davis, admits that with his latest jag, his tray table might no longer be in the fully upright position. "I think we have enough miles already," Cindy said when he insisted on completing the last four flights in the Latin Pass promotion. Phillips argued that the miles could be used on TWA and USAir as well as at several major hotel chains. They'd never have to pay for another flight or hotel as long as they lived.

Daughters Katie and Emma, 7 and 5, were spinning the globe in search of exotic destinations as Phillips took off for a long weekend in Ecuador and Peru. He got home March 13, seriously jet lagged but 1 million miles richer. The only problem is that he gets just 18 vacation days a year, and neither pudding nor miles can buy more.