The big theme this year in the frequent flyer universe — at least for US airline loyalty programs — is which ones will be trying to make themselves more “revenue-based” and when?
Airline frequent flyer programs — the single most successful marketing innovation in history, and profitable multi-billion dollar businesses in their own right even as the airline business has struggled — have convinced themselves they’ve been doing it wrong all these years.
So trying to figure out how to ‘reward’ only those who ‘contribute the most revenue’ is in vogue.
Even though frequent flyer programs aren’t supposed to be about ‘rewarding’ people, they’re supposed to be engines with which to drive incremental business. Many in the airline industry have difficulty with marginal analysis, however.
Delta is expected to be the first to alter their award charts to more closely align award prices with ticket costs. There’s also speculation about how they could change airline mileage earning to align with ticket price. Already they were first out of the gate with minimum revenue requirements for elite status.
But in researching another post I stumbled upon Delta’s earlier attempts at this, and realized just the extent to which past is prologue — and how we can’t really trust industry promises about what changes will mean for consumers.
In April I declared the pending US Airways-American Airlines merger the death of the double miles award.
It used to be that frequent flyer program members could any seat they wanted in most programs just by spending twice the miles. Some programs like United’s restrict this ability to get the last seat on the plane to their elites and co-brand credit card holders. Most airlines — American excluded — charge way more than double for that seat now.
Back in 2008 Delta rolled out a “third tier” for award redemtpion, with a more expensive level than the traditional two-tier and double miles for the second, higher one.
And Jeff Robertson, then as now head of the program, explained what it meant.
It was the rolling out of revenue-based redemptions.
Each award level is combinable, and with availability on a flight by flight basis on our website, we move the pricing of an award seat a lot closer to the pricing of a revenue seat.
Their 2008 changes were already supposed to be the revenue-based redemptions we fear so much.
Reality was much worse than what we were told to expect
Moving forward, the only people who should really be using “choice” are those who plan last minute when the flights are full, or who are trying to find awards seats during the most peak special events (e.g. Super Bowl).
The third tier — high level — really wasn’t going to effect any of us. Or so we were told.
But what’s the reality?
I had a look at Delta’s award calendar for what I think are reasonable redemptions — 2 business class seats, booked two months in advance, for secondary (and vacation) destinations across the Atlantic.
These aren’t the kind of award seats you might see available on every flight at the low level, but they aren’t last minute and the redemptions don’t involve the Superbowl. So there should be some saver options over the course of a month, and certainly plenty of “medium” award space, right?
That’s what we were promised by Skymiles chief Jeff Robertson.
Here’s the reality. Blue is ‘high’ (325,000 miles roundtrip), yellow is ‘medium’ (200,000 miles roundtrip) and I won’t even bother identifying the supposed color of saver award space (100,000 miles roundtrip).
These were the first three cities I checked space for.
New York – JFK to Nice, France during the month of September
New York – JFK to Venice, Italy during the month of September
New York – JFK to Athens, Greece during the month of September
When a frequent flyer program makes significant changes and makes predictions about how those changes will work in the future for their customers you really shouldn’t believe them. Especially if the airline’s name starts with a D.