Chris McGinnis won the internet yesterday by featuring a graphic by Charles M. Kunz aka CMK10 showing what United has done to their frequent flyer program.
United’s decision to make its points-earning through flying a nearly carbon copy of Delta’s 2015 program was yesterday’s story that rocked the frequent flyer world.
Miles can do more than they ever did in the past. Alliance awards – using your miles on several partners on the same award itinerary – didn’t exist 15 years ago. With the price of air travel is way up, miles are getting us something that airlines are charging more and more for.
But we’re seeing a lot of change in how miles are earned and how awards are priced. Delta has been a real
destroyer leader in this. United had already gutted its premium cabin international awards on airline partners.
Delta’s story is that they’re running a good airline, they have a good product, and they want to focus on their high value customers.
- The story breaks down a little bit in the details, of course. Delta rolled out a spending requirement for elite status that went into effect this year, and you have to spend an average of 10 cents per qualifying mile to earn the tier you’ve flown enough for. But to break even in mileage earning you have to spend twice as much as you do for status. And contrary to the idea that the biggest spenders do the best under their program, they’ve limited the number of miles you can earn on a ticket (no matter how expensive) to 75,000.
But Delta has a clear story. United does not.
- United is hurting too badly, they aren’t Delta and they don’t have Delta’s product. Delta is willing to lose customers over this. United has already lost a few million of theirs. I’m not sure they’re in a position to be losing more.
- There’s no narrative. United made big changes to its award chart in November and rolled out in February. Then in June they made changes to points earning.
They didn’t come out with any stories about what they’re trying to do, what other changes could be coming, or what customers should take away from it. The only story that seemed to be getting through is that they’re copying Delta. Right down to the points earned per dollar, and the 75,000 mile cap per ticket.
- United can’t even track ticket spend correctly for elite status but they’ve set a timetable for when systems that don’t work roll out to all 90 million members. In March. I think we’ve played this game before.
So what comes next?
American Airlines and US Airways are focused on their merger. AAdvantage and Dividend Miles will combine sometime in 2015, and flying in 2015 across those two airlines will determine the status on the New American in 2016.
With all their efforts focused on integration, customers get a breather. The airline based in Dallas gets to watch what happens with Delta, and with United, under their new programs and take the results into account when they decide whether to plot their own course going forward or follow the pack.
The distraction of merger paradoxically makes it a good time for many flyers to be members of AAdvantage.
There are a lot of loyalty programs in the world, though, and for the occasional flyer who isn’t going to make out well with these changes it’s a good time to diversify points – to earn points with credit cards not tied to their primary airline, and to explore some of the international airline partner programs that provide great value to members like:
- Korean Air SKYPASS (Skyteam)
- Avianca Lifemiles, Singapore Airlines Krisflyer, Aeroplan, and ANA Mileage Club (Star)
- Japan Airlines Mileage Bank and British Airways Executive Club (oneworld)
Times are good, planes are full. The economy is better than it was 5 years ago, better than it was 12 years ago. So airline programs, and hotel programs too, are less generous. They don’t need to bribe us to put butts in seats or heads in beds.
As soon as that turns, though, they’ll be back and generous again. Travel is a very cyclical business.
Update: In my original post I had misattributed the graphic at the top to Chris McGinnis. I saw it on his blog, and hadn’t realized he credited Charles M Kunz aka CMK10 for creating it. I’ve corrected the attribution.