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Travel Agent Charged for Fraudulently Earning $1.75 Million Worth of Frequent-Flyer Miles



The managing director of a Chicago travel agency has been indicted for carrying out $1.75 million fraud on Delta Air Lines‘ airlines/more-ways-for-small-and-medium-sized-businesses-to-soar-with-delta-skybonus.html” target=”_self” rel=”nofollow noopener noreferrer”>SkyBonus frequent-flyer program catering to businesses whose employees often travel.

According to a release published Friday by the U.S. Attorney’s Office in the Northern District of Georgia, 43-year-old Gennady Podolsky—a dual Ukrainian and American citizen and managing partner of Vega International Travel Services, Inc.—earned and redeemed more than 42 million SkyBonus points.

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“Podolsky used his knowledge of the travel industry to take advantage of his travel agency clients,” said U.S. Attorney Byung J. “BJay” Pak in a statement. “Through his access, he allegedly took advantage of Delta Air Lines corporate frequent flyer program, illegally reaping millions of SkyBonus points worth more than $1.75 million dollars.”

Chicago-based Vega Travel is a small, full-service travel agency that catered to clients of Russian and Eastern European descent living abroad, the U.S. Attorney’s Office said.

From March 2014 to April 2015, Podolsky, Vega Travel’s lead travel agent, is alleged to have created a SkyBonus account for a fertility center owned by a relative of the agency’s president. He’s accused of entering the fertility center’s SkyBonus information when his customers flew Delta and booked through Vega Travel even though they weren’t employees and had zero ties to the fertility center.

Podolsky allegedly redeemed the fraudulently accrued SkyBonus points by requesting, receiving and utilizing reward certificates for free air travel and other benefits.

Podolsky was arraigned on 12 counts of wire fraud. The FBI is currently investigating the case.

“The fraudulent accumulation of frequent flyer miles in the travel industry may seem like a victimless crime, however, large corporations stand to lose significant profits,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The FBI will do everything in its power to protect companies and to stop anyone who participates in this corrupt behavior.”

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Expect Airlines to Supply Fewer Options and Higher Fares After COVID-19



While many in the air travel industry are, of course, hoping for a swift and complete rebound in passenger traffic once the COVID-19 crisis finally comes under control, others aren’t as optimistic.

In fact, aviation analysts are saying that the diminished demand for air travel brought on by the coronavirus pandemic will likely persist for quite some time, even once the threat of contagion has passed.

CNN Business’ coverage looked back at the commercial aviation industry’s path to recovery after the 9/11 attacks in 2001, pointing out that passenger traffic didn’t fully bounce back until 2004. And, in the wake of the 2008 Global Financial Crisis, it wasn’t until 2013 that passenger traffic again reached the levels seen in 2007, just prior to the recession. The slumps seen in air traffic during those two crises were just a fraction of what the world has witnessed over the past four weeks.

It’s likely to take a long time for passenger air traffic to rebound from this unprecedented downturn, even once people are able to start flying again. As airlines resume operations, they’ll be selective about the routes they maintain and reduce frequency in order to fill more seats per plane, which will lead to higher fares than were seen before the crisis.

Chief credit analyst for airlines for S&P Global, Philip Baggaley, explained that, as airlines return fewer planes to service and fill those in operation to maximum capacity, many of the low-costs seats that fliers once enjoyed booking will vanish. “Fewer seats flying means fewer cheap seats at the margin,” he said.

“There’s going to be fewer airplanes. That means less flying,” industry consultant, Mike Boyd, told CNN Business. “So, there’s going to be less choice, and you’ll be paying more. There’s no way around that.”

Historically, major economic blows to the industry have resulted in bankruptcies and mergers for the airlines. Prior to the 9/11 attacks, there had been nine major U.S. carriers, which afterward merged into today’s four major carriers, which last year accounted for 80 percent of passengers flown aboard U.S. airlines: American Airlines, United Airlines, Delta Air Lines and Southwest Airlines.

It’s possible, then, that a new wave of airline failures and mergers is on the horizon, especially given that the $50-billion federal bailout promised to the industry won’t even cover the near-$65 billion in revenue that U.S. airlines would have otherwise collected, even if they only matched last year’s numbers.

“In the near term, we’re going to see a shakeout,” said Joe Schwieterman, a transportation expert and professor at DePaul University in Chicago. “The weaker players may not survive this. Most industry leaders are expecting a long, painful recovery.”

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