Tag Archives for frequent flyer.
Crashing the economy is a bad thing! But it’s not equally bad in all ways. In fact there are always some beneficiaries. It just so happens that one of those is likely to be the value of airline miles.
The Sabena case was prosecuted by the U.S. Attorney for the Eastern District of New York. Sabena’s defense was that this was common practice in the industry. Airlines all denied it, and pointed fingers at other carriers including Pan Am and TWA as well as KLM and other foreign carriers flying across the North Atlantic. Ultimately a consent decree was entered into, and an Iberia executive was jailed for continuing the practice.
For a currency to continue to be attractive, it needs to deliver value – managers can’t just focus on sales to third parties, they have to focus on the customers who ultimately want the miles. And they want it because of the travel possibilities that it opens up, from redemptions to treatment with the airline. It’s important not to forget that the programs can actually create loyalty to the airline itself and not just to the in-wallet plastic; actually putting butts in seats and at a premium.
Point.me, the service that helps you find frequent flyer award seats (and walks you through the process of setting up accounts, transferring points, and making the booking) has a lot of award search data. People are looking for available awards all day, every day.
They already know which programs offer availability the most that their members are looking for, and which programs offer those seats at the best prices.
Do large airlines’ rewards programs hurt competition? That’s the question that the Biden administration is asking.
The Global Loyalty Organization hosted loyalty leader predictions for 2024. A lot of it was milquetoast, and not really actionable, as so much corporate speak is wont to be. But there were a few real insights here. Four things especially stood out.
Only the Department of Transportation has authority to police loyalty programs, and according to the DOT Inspector General the agency has improperly ignored complaints about frequent flyer programs. That appears about to change.
This underscores a major reason why Spirit Airlines launched a major revamp of its loyalty program, introducing a relevant program which replaced a completely irrelevant one.
This deal values Spirit’s loyalty assets, whose 2021 revenue totaled $96 million, at $4.2 billion, even though the market cap of the entire business is only a little over half that.
Airlines have gone through unprecedented challenges as a result of the global pandemic. Carriers have taken on enormous levels of debt and have only limited ability to invest in their product again. Delta CEO has even said he expects future bailouts if they’re needed. What if the solution to long-term airline solvency were right in front of us? What if it took just a tweak to one law to make happen? And we might never be stuck doling out subsidies again.
Make the currency worth less, consumers chase it less at some margin. Reduced consumer interest is bad for the long run proposition of the currency, which is bad for the price of financial instruments derived from that currency. Now that airlines have issued upwards of $30 billion in debt backed by their loyalty programs, this is a new issue for them to manage.
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 »
