Frequent Flyer program: Airlines go for the big spender, not frequent flyer

AS the global economy recovers and more people begin flying, airlines do not have to work as hard to retain old customers or entice new ones. There appears to be a rethink of the flyer program to base its rewards not on frequency of travel or the miles travelled but how much you spend on a ticket. The name of the frequent flyer program is apt to become a misnomer as airlines shift their preference from frequent flyers to big spenders. The new Qantas Frequent Flyer program does exactly that, moving from a miles-based system to a zone-based system whereby flyer points and status credits are based on the cost of the ticket. There is also a shift in downgrading rewards for travel on partner airlines to encourage customers to fly Qantas first and its partners second.

Courtesy Delta Air Lines

Courtesy Delta Air Lines

The trend is also catching up in the United States. Delta Air Lines and Southwest Airlines (though a domestic operator) already have such a system in place. The American Airlines Group comprising the merged entity of erstwhile American Airlines and US Airways is following suit. Alaska Airlines is mooting over a “Sphere” program to award points based on spending rather than just flying. Delta’s SkyMiles program vice-president Jeff Robertson said: “The travel industry, including nearly all hotel and credit card programs, has already moved to a spend-based model. The introduction of a new model for earning miles will increase rewards for those who spend more as well as differentiate the SkyMiles Frequent flyer program for our premium traveler.”

Is this a sign of the premium market recovering or merely yet another push to energize that segment of travel that in better days make up the bulk of a legacy airline’s earnings? However you look at it, it makes economic sense to reward those who spend more. What price then is loyalty for those who fly frequently but do not splash to drink champagne and feast on caviar? The base may shift, particularly when you can join any one of so many airline programs for a fee, such as Cathay Pacific’s Marco Polo Club, just to enjoy priority check-in and boarding, access to an airport lounge in some cases, and possibly an upgrade. Who needs to fly frequently thus or even spend the big bucks?

Advertisements

About David Leo
David Leo has more than 30 years of aviation experience, having served in senior management in one of the world's best airlines and airports. He continues to maintain a keen interest in the business, writes freelance and provides consultancy services in the field.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: