Tag Archives for devaluation.
Senators Dick Durbin and Roger Marshall have requested an investigation into airline frequent flyer programs, alleging unfair changes to point systems. However, the senators’ motives may not be genuine consumer protection, as they have proposed a bill that could lead to significant devaluation of these programs, suggesting a hidden agenda to undermine objections to their legislation on credit card interchange.
Emirates as a company hasn’t prioritized loyalty and so the head of loyalty optimizes within that framework. Revenue management won’t release award inventory to the program to any meaningful degree, so Skywards is stuck promoting using their miles as cash towards flights on the airline and cannot buy excess inventory to sell at a profitable discount through the frequency program.
Emirates finally offers an explanation for why they keep raising the price of awards while also adding $1,600 co-pays when you spend your miles. And the answer is, basically, because once you acquire their miles you’re stuck and they can.
Cathay Pacific has announced a devaluation which goes into effect October 1. Unlike U.S. carriers they still have a true award chart, which means that when raising award prices they have to tell you. And they’re giving three months’ advance notice.
Make no mistake, though: Asia Miles will be worth less. The FAQ for the changes even has a question “Are you devaluing Asia Miles?” And even they do not say no.
There’s a tremendous amount of wrangling over what will be in the FAA’s 5-year reauthorization currently being developed in Congress.
One lesser-noticed item that’s been posted by the Senate Commerce Committee includes protections for members of frequent flyer programs stating that frequent flyer programs wouldn’t be able to devalue their miles without first giving members 90 days’ advance notice
United MileagePlus has increased the cost of transatlantic awards on its own flights by one-third, and on partners by 39% – 46%. We’ll see what the effects are on other regions.
After a debacle years ago increasing award pricing without notice for travel on Emirates, Alaska Airlines made an express commitment to notify members in advance when making changes to the program.
Sadly they did not do that this week, as Monday they increased the price of award travel on their oneworld partner Japan Airlines, and they did this without any advance notice. So members who were saving their miles for a specific trip had the rug pulled out from under them.
I’ve been warning that there was no way this award would last. Virgin Atlantic’s miles are, on the whole, otherwise not very valuable. Awards that are several standard deviations better than average never last. Virgin also has a history of making changes without notice whatsoever.
When Alaska Airlines introduced its new, unified award chart that replaced the separate charts for each airline partner on its website a month ago, it was a loss for transparency.
By sharing less information about award prices, they can increase those prices without telling consumers. They had previously committed to share changes with members in advance. But as long as the ‘starting from’ price doesn’t change, they can increase most award rates at will.
While there was much talk in 2021 about AAdvantage devaluations, they committed not to change their award chart as they rolled out Loyalty Points as a new way to earn elite status. Now the deferred chickens may come home to roost – risking the value of the AAdvantage program, the revenue streams for co-brand partners, and the quality of AAdvantage-backed debt.
Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel -- a topic he has covered since 2002.
Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »
