Dear Airlines: Thanks For Ditching Change Fees, But Can We Rewind The Clock On Mileage Program Devaluations?

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When times are good, the airlines make devaluation after devaluation. They know we’ll use them anyway, so why not make more money off of us.

But when times are bad, they start rolling those changes back to gain incremental business.

United was the first mover in the latest round of added benefits, with a number of change fee and standby improvements. They smartly did it on a Sunday when other airlines weren’t prepared to immediately respond, giving them a full day of positive press coverage.

That change helps United upsell passengers from Basic Economy tickets to regular economy tickets, as well as better compete with Southwest. Plus it stimulates demand for tickets when times are tough.

Delta matched some of United’s policies, but they were vague on the details. I just spoke with their media relations department and they said the vagueness was intentional as they are still figuring out exactly what to do and will keep me posted. In other words, we don’t want you to think United is better than us, but we’re still not sure how much better we actually want to be.

American did it best so far. They included more destinations in their waiver, will provide vouchers for changes to less expensive tickets, and will greatly ease up on basic economy restrictions, especially for elites.

But if the airlines really want consumers to come back, here are some quick ideas:

  • Bring back 2015 award charts.
    • Once upon a time, earning airline miles was much better than earning cash back or bank points. Delta and United have removed their award charts and American wasn’t far behind when the pandemic hit. Without saver award pricing, airlines are free to devalue at will, which disincentives collecting miles. Their offerings today are not competitive with other options that banks are offering, and airlines are complaining that people aren’t earning miles on their co-brand cards. Airlines need to restore the value proposition that existed in order to earn back lost business.
  • Find creative ways to encourage co-brand spending. 
    • Spending on co-brand cards was already down last year. As I said then, United seems clueless about how to fix this problem. The answer is obvious. Southwest encourages co-brand spending by counting spending towards earning a companion pass. Delta is making it easier than ever to earn elite status through spending and they’ll even count your elite qualifying miles in 2020 and again in 2021 by not resetting them. That way you can earn status through 1/31/23. American and United offer nothing to compete with that, they only offer the ability to earn a piddly amount of elite qualifying miles from spending. Why not offer elite status through spending during times like this? Or if you don’t want to water down elite status, make a separate status track just for spenders, with tailored benefits that matter most to spenders like waived close-in redeposit fees, discounted awards based on spending levels, and expanded premium cabin saver award space? Generating more co-brand spending should not be rocket science!
  • Award miles based on flight distance once again.
    • Not long ago, you earned the number of miles that you actually flew. Then the airlines started awarding miles based on your fare paid. Airlines are rewarding business travelers that spend a lot with tons of miles, but those passengers would fly with the airline anyway based on an ideal schedule or more comfortable seat. Offering them more miles doesn’t make them choose another airline. Airlines would do better at the margins by returning their mileage programs from the frequent buyer clubs that they have become, to the frequent flyer clubs as they were originally designed.
  • Eliminate minimum spending to earn elite status.
    • Airline added onerous spending requirements to earn elite status that created free agents among those who can’t spend enough to please the airlines. In lean times, they should reverse this, bring back the mileage run, and make flying fun again to stimulate business. Airlines still find ways to rewards those that spend the most with secret tiers like American Concierge Key, Delta 360, and United Global Services. Other statuses don’t cost the airlines much, especially in an era of free changes, so why not make them more achievable as the number of those flying dwindle?
  • Loosen up on saver award space.
    • Airlines are flying empty flights, but they’re still being stingy with saver awards. This is absurd! Wipe miles off the books and let people fly when planes are empty! I’ve seen American flights with zero business class passengers and zero saver award seats. That’s a slap in the face to mileage collectors that keep airlines in business.

Air Canada Aeroplan seems to get that award charts and valuable miles are important. They also provide elites with fun and unique benefits like 50% award discounts and the ability to make a redemption passenger an elite for the day.

Will US airlines follow their lead or will they continue down a path that makes collecting airline miles a thing of the past?

What other suggestions do you have for airlines looking to drum up incremental business?

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14 Comments On "Dear Airlines: Thanks For Ditching Change Fees, But Can We Rewind The Clock On Mileage Program Devaluations?"

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Mike

I think they will get rid of minimum spend as with lower fares it will be hard for anyone to qualify

Julian

Preach it Dan!

Eliteflyer

Some hub-city frequent flyers may be captive customers, but at my firm, it’s not uncommon to see employees who travel a lot and have high tier elite status choose to fly their preferred carrier to maintain status. The less frequent travelers solely pick their flights and airlines based on schedule.

David

Thank you Dan!
Your the head of the flyers Union

moe8555

Excellent post, was truly a pleasure to read! The lack of creative and strategic thinking in these companies is truly astounding.

Dan, you should take a look at Etihad cobrand cards offered in the UAE (there are a lot, but they’re all listed conveniently on the Etihad site). Those are solid examples of cobrand cards that offer unique perks and spending incentives.

Jack out of the Box

How about bring back 2x70lb luggage, choose seats in advance for free, personal whiskey bottles, etc.
Rewind like 15 years.
Any adjustment in that direction would be welcome.

Chaya Azer

My yeshiva son who just went back to Israel was given silver status and 2 free 70lb suitcases on united. We were shocked! He does travel mostly on united the past few years.

e

can we add get rid of change fees on international flights, why are only domestic fees elimininated

Joe

I think we’re forgetting that after September they will be able to do massive lay offs. Right now they’re running artificially above demand. My money would be on seeing the airlines scale down to where they can still operate profitably until the situation changes (or more free government money gets showered on them) rather than changing the business model in a desperate way to stimulate demand.

Zack

You make many good points, however, some of them, for example to eliminate minimum spend to earn elite status, are for the clients that the airlines profit the most from.
A mileage geek customer is usually not profitable for an airline.. the business man that hardly has time to think about miles is the profitable customer.
So this whole entitlement is way off from a business standpoint IMO.
(As a Frum hotel developer once said, that he would never open a chain hotel in a Frum area…)

Barry

You hit the nail on the head, Dan,
I have shifted all my spending from a Mileage Plus Card to a cash back card.

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