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.
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.
With travel activity slowly coming back, some first timid attempts to increase the value of loyalty program memberships can be observed. Next to certain promotions limited in time with their corresponding opportunistic character, other changes are more fundamental and (hopefully!) lasting. For instance, Emirates and Finnair (the latter as of 25 June) were among the first ones to remove fuel surcharges from award tickets, representing massive savings. This does not only apply to members of their own programs, but also to members of the respective partner programs. Qatar Airways on its turn has removed its crazy flat award surcharge of 25 to 75 USD per segment in its Privilege Club, representing a saving of 100 USD in Economy Class per roundtrip for a typical routing involving a connection and even 200 or 300 USD in Business and First Class respectively.
Let’s assume you are not yet fully confident in the situation, but would need to travel from Moscow to Vladivostok. You may consider the alternative of a rental car and would still not need to do without any Aeroflot miles: As a matter of fact, Bonus members can currently earn up to 5,000 miles for Avis rentals in Russia. This maximum amount is only earned for rentals of at least 15 days – but that is the time you’ll need for such a trip. Or it might nevertheless be a better idea to travel in the full comfort of Aeroflot’s Business Class (with guaranteed social distancing!) and earn at least almost 12,000 miles for that trip?
Pre-Covid, it was kind of an unwritten exclusivity right for Avianca’s LifeMiles program to offer promotions with a bonus of 100% for the purchase of miles, which sometimes reached even up to 130% in very special situations, such as Black Friday offers. But this has now changed completely and many hotel and airline programs view the purchase of points as the only mean to keep members engaged – by attractive promotions. Offering a bonus of less than 100% is basically not enough anymore to gain the attention of members. TAP Air Portugal has redefined the rules here by offering repetitive promotions with quadruple miles for the purchase of miles in its Miles&Go program. So far, so good and some interesting deals can indeed be made on such a basis, especially when miles are redeemed on long-haul flights in Business or First Class, including on partner airlines. But as programs make it transparent to their members that the margins of such purchases are apparently huge (as they still make money with such offers!), how do programs ever want to come back to their regular premium pricing in the future?
28 May 2020
Focus groups are a common tool for airlines and hotels to test new product elements to ensure that the ideas correspond to the needs of their best customers. Wouldn’t it be a good idea to remember these focus groups now?