Loyalty will always have its rewards in the airline industry, but if the rewards lose their value, travelers will have little motivation to stay loyal. Especially when they can save money with their infidelity.
I draw this conclusion from the voluminous response to my November 3 SmarterTravel.com feature on the current state of loyalty programs. The article discussed current program developments—almost universally negative from a consumer standpoint—and concluded with the recommendation that we should lower our expectations of the programs, at least for the foreseeable future. I also encouraged my readers to be “vocal in their criticism.”
And vocal you were. The feedback came from all quarters: road warriors, leisure travelers, travel industry pros, and travel journalists. Your anecdotes and insights were so cogent, so perceptive, that they fairly cried out to be published for the benefit of other readers. (Note to travel-industry marketing executives reading this column: You would be well served by approaching this feedback as actionable advice.)
So here, judiciously edited and minimally annotated, is a sampling of SmarterTravel.com readers’ comments and general reflections on the current state of the mileage universe.
On the right track
The first note I received after the article posted was from Chris McGinnis.
- Excellent, insightful, and intelligent column! The best one I’ve read all year on frequent flyer programs.
Chris is a fellow travel writer, the author of two books on business travel, and a regular CNN commentator. So aside from the ego gratification that comes from critical acclaim, his endorsement of the article’s thrust was a reassuring reality check.
The mileage mind-set
Walter Ward, manager of Jacquin Travel in Miami, submitted the following comments about the place of mileage programs in the travel arena:
- You hit the nail square on the head with your explanation of the future of miles. It’s really a mind-set in most travelers’ minds anyhow. I am a travel agent and it would surprise you how many once-a-year travelers want to make sure they get their miles.
Put another way, frequent flyer miles have come to be seen as part of the core product, together with price, schedule, service, etc. But there’s a downside to the airlines’ success in training consumers to expect mileage benefits: the potential backlash if those benefits are reduced or eliminated.
Wants more, gets less
M. M. is the proprietor of the La Casita de Amor Guesthouse in Santa Fe, New Mexico, so she views the industry from the standpoints both of a consumer and a travel provider.
- I think the airlines are being short-sighted. They need MORE business, and not increasing mileage for awards is one way to create the goodwill that creates more business.
It’s not just the award levels that bother her.
- I have over 120,000 American frequent flyer miles, but, ironically, have yet to redeem any—the hassle of redeeming one’s miles has been too daunting!
The real cost of awards
Park Douma is the credit manager as well as the travel manager for a large company (300 employees). He participates in the programs of Delta, United, and America West.
- You are so right in your November 3 article regarding loyalty and frequent flyer miles. Do not be misled though into thinking that domestic tickets are still 25,000 miles. Delta’s program has 25,000- and 50,000-mile tickets with the biggest one having to be used during the more popular daytime hours.
Regardless of how much one flies, loyalty needs to be rewarded and the flyer shouldn’t have to jump through hoops to get that reward.
Programs losing their power
Jackie B. is a retired elementary school teacher from Hamilton, Ohio. Her outlook for the programs is decidedly bleak.
- I think the basic programs are here to stay but will become harder and harder to use, so people will just begin to forget them.
Her specific experience with the award side of Delta’s program reinforces the article’s contention that airlines are retraining consumers to look to unrestricted awards as the baseline expectation.
- We tried to book Cincinnati to Alaska for the summer of 2003 on Delta. We attempted to do this in October of 2002. There were no frequent flyer seats from the Delta hub in Cincinnati to Anchorage anytime between May 20 and mid-August at which point we decided to stop trying. We were not looking for a through flight; we just wanted to use 25,000 miles each to fly to Anchorage and back. After securing our tickets we planned to book a land tour and a cruise on Prince William Sound.
We finally decided to go ahead and use double miles for the trip.
And her conclusion points to the danger faced by airlines when their mileage programs don’t deliver as expected.
- Now we have few Delta frequent flyer miles left and no loyalty to Delta.
Apropos of the trend toward crediting fewer elite-qualifying miles for travel on discount tickets, Michael Shapiro, TravelTech columnist for the San Francisco Chronicle and author of The Internet Travel Planner, weighed in as follows:
- Just read your column on frequent flyer programs, and for once I can’t blame the airline execs.
They really should reward flyers who spend the most money. You know what I’d do if I were an airline exec at the big six? I’d forget about mileage and award points per dollar spent. So the biz traveler who spends $2,000 gets six times as much as the budget flyer who makes the same flight for $333. It’d be a bummer for us budget travelers but it wouldn’t be unfair.
Most consumers readily agree that, in principle, rewards should be proportionate to how much was paid. That just squares with common-sense notions of fairness. But when it comes to airline miles, many of these otherwise right-thinking individuals insist that they should be rewarded according to the length of the trip, rather than the price of the ticket.
Obviously this is at least partially a function of travelers’ unwillingness to embrace a change that, however rational in theory, is bound to negatively affect their ability to reach elite status. But I think it also has its roots in the feeling that they should be rewarded for enduring the discomfort of travel, which is the same whether you’re flying on a heavily discounted apex fare or a prohibitively expensive walk-up fare.
The final three notes also address the issue of elite status, but with a decidedly different point of view than Shapiro’s.
Seth Kaplan lives and works in Miami. He flies 50,000 miles annually and most of those flights are on Continental because he finds their elite benefits to be superior to American’s.
He takes issue with Continental and Delta’s elite-qualifying policies and uses solid marketing logic to show why those policies are misguided.
- The decision by some of the majors to award fewer status miles for discount fares is misguided. We have to accept a fundamental fact that is truer than ever in a tough economy: In general, frequent flyer programs do not cause people to fly more or pay significantly more for a ticket (i.e., few people would buy a full-fare Y ticket for hundreds of dollars more just to get full status miles). What the programs do is affect which airline we choose to fly when all else is equal or nearly equal.
If I am unable to attain elite status next year, I will probably go back to doing what I always did before I was elite: flying with whatever airline gives me the best deal, accumulating miles, and then redeeming them when doing so is to my benefit—which, ironically, is not the goal of loyalty programs at all. In this way, miles are essentially just a rebate for flying.
The most to lose
Bob Schaeffer is a Florida-based consultant with more than a million miles in various programs and elite status with Delta and US Airways. He travels frequently, but often on discounted fares—exactly the type of traveler with the most to lose from the new trend toward awarding fewer elite-qualifying miles for cheaper tickets.
- Yes, airlines have the right to structure their frequent flyer programs in any way they choose. But, the current direction Delta and others are pursuing is not likely to be in their long-term economic self-interest, at least as far as customers like me are concerned. As the incentives for concentrating my business on one or two airlines disappear, I am increasingly inclined to fly on other carriers such as AirTran or JetBlue. So the company may lose my revenue entirely. At the same time, the incentives they offer flyers like me actually cost the airline very little—priority boarding and access to first class seats that they could not sell anyway (with an occasional meal and/or drink). Unless the airline is selling seats at a price less than their incremental cost, it makes sense to keep customers like me in the fold.
Goodbye perks, hello low fares
Lee Wojcik is a customer service manager for Sun Microsystems in Illinois. He enjoys Gold elite status with American AAdvantage, and was also elite in United’s program until recently. He uses his elite upgrades for leisure trips with his wife.
Anticipating a loss of elite status, Lee foresees a significant shift in his purchase behavior:
- Since it will put the higher level out of my reach, I will now book on lower-cost airlines for my pleasure travel where I would not have in the past. I’ve always been willing to spend more where I had the status, but losing that status now makes the airline seat a commodity item for which price will be my only deciding factor.
What emerges clearly, both from the above comments and from other recent conversations I’ve had with travelers, is that airlines have pushed frequent flyer program members to the brink of revolt. And they’ve done so at an especially inopportune time. With low-fare carriers nipping at their heels, and profitability a distant hope, the major airlines need all the loyalty they can muster.
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