Until now, airlines were reluctant with generous mileage offers. They seemed to rely on state aids rather than on customers. Exceptions were Southwest Airlines and Finnair with general promotions for double points on their flights in their respective programs Rapid Rewards and Finnair Plus. Air France KLM, however, is now putting massive pressure on other carriers as it has just started a promotion for double miles and status points in its Flying Blue – for all flights until December 31. Small print and restrictions of the offer: None! A registration for this promotion is not required.
Brazil is not a place for earthquakes, but last month’s announcement of the close cooperation between LATAM and Azul, including a Frequent Flyer partnership in their programs LATAM Pass and Tudo Azul, had the magnitude of a very big one. The cooperation between the number 1 and 3 airlines in Brazil is justified by the crisis of the sector resulting from Covid, but will make life especially hard for Gol and its Smiles program. As Azul’s other partnerships are with Star carriers (including the just launched partnership with Air Canada) while LATAM Pass has kept most of its former oneworld partners in spite of adding Delta, things can still become very interesting in a sense that Brazilian customers may choose either program going forward in function of which international airline partners they prefer. And the international partner network obviously also remains the strong point of Smiles.
All airlines try to find ways to ensure that they will still be around by this time next year. In spite of their extraordinairy efforts, many nevertheless won’t succeed. But Alitalia has found the simplest way: Without anybody really noticing it, they shut down the old Alitalia, incorporated as Alitalia-sai, on June 29 and created a new one, Alitalia-tai. This is in a nutshell a debt-free company with a starting capital of 3 billion EUR of state aid, but assuming the debts related to its Frequent Flyer Program MilleMiglia, which is not directly affected by that transaction. However, the European Union made its approval of the state aid subject to Alitalia’s “making a clean break with its past”. Looking at its fleet, network, management/workforce and Frequent Flyer Program, there are certainly more reasons for doubt than anything else regarding that condition. But if it doesn’t work with Alitalia-tai, why not trying with -uai, -vai, -wai etc.? At least until also the last MilleMiglia member has managed to use all outstanding miles?
At least for some time, the life of an elite member may not be anymore what it used to be – and will question very much the value of membership and the efforts you should put into it to become or remain such a member. With traffic restarting, it now becomes clearer how airlines imagine the future. For most tier members, complimentary upgrades (particulary popular in North American programs) and lounge access are the two most valuable status benefits. Officially, nobody is cutting back on them as such, but US airlines have already warned that they may not upgrade anybody eligible even if there are seats available in order not to overload premium cabins if the rear of the plane is empty. Likewise, the lounge experience won’t be the same anymore. Capacity restrictions will be imposed, forget about open buffets and bars. Lounges remain obviously still a quiet place to work – but with frequent flyers returning to the skies first, you risk finding many airports where the public area might actually be quieter. And then you always have those special cases: While it is certainy a good idea to limit alcoholic consumption while travelling, some lounges misuse the current situation to impose limits on such consumptions. How this is really related to the pandemic remains a mystery…
Only the elder persons among us might vaguely recall that there was some talk about easyJet launching an FFP, long time ago. While easyJet now certainly regrets not having such a tool at its disposal in order to help it to fill its planes again in the current situation, it will face another issue if ever it decides nevertheless to launch a program: The logical name for its potential program, Orange Miles, has now been picked up by Afghan carrier Kam Air for its newly launched program. But the good news is that easyJet may even get inspired by that rather refreshing program, having no points expiry, a flexible family account and a bonus for online bookings.
13 July 2020
Loyalty programs widely work on rewards and recognition. But both elements are kind of broken in the current market environment, meaning that loyalty programs would need to reconsider how to remain relevant during the crisis.
I’ve been passionate about aviation ever since I can remember and about FFPs ever since I started to think – yes, I am not one of these young bloggers, who were even not yet among us on 01 May 1981, when an idea of American Airlines was
07 July 2020
Loyalty programs have one common enemy: upfront discounts or cashbacks. In harsh times like these, there is always a drift in favour of discount schemes, putting loyalty programs under pressure to reinvent their value proposition.
The relationship between the joint venture partners Emirates and Qantas might not always have been as smooth as one could have expected. Competition between both airlines remains fierce – and even more so the fight for customer ownership in the loyalty programs. When Qantas changed the award levels in its Frequent Flyer last year (decrease in Economy Class, increase in Business Class), Skywards was quick to mirror the decrease in its own program for award flights on Qantas – but maintained the (significantly) lower award levels for travel in Business Class, making the program the more rewarding option for Qantas redemption flights than Qantas’ own program. Now Emirates took a lead by taking out any fuel surcharges on award flights, increasing dramatically the value since surcharges were previously extremely high. The change does not only apply to Skywards members, but also to members of any partner programs – such as Qantas – redeeming their points on Emirates. Qantas has now responded by the announcement to move Emirates as of 01 September from the cheaper Qantas award table to the more expensive partner award table in its program. This equals an increase in the mileage price of some 20% in Economy Class and some 10% in Business Class. Such unfriendly moves should also be expected in other JVs as airlines will have to strenghten efforts to fill their own planes first before thinking of any partners in the current environment.
Miles & More has announced to postpone the introduction of the status points system by one year, hence to 2022. Although Lufthansa communicates this in a manner that could be understood as favour towards members, we do not really consider the introduction of that points system as a deterioration of the program, but just an overdue move to separate the reward and status currency – something others like British Airways have been doing for 30 years. The real reason for that postponement is though purely operational since Miles & More will extend the status of elite members set to expire at the end of this year by one additional year.