Opening Remarks – August, 19 2002

Opening Remarks – August, 19 2002

There are many things I could comment on this month, but nothing seems more relevant than the howl coming from frequent flyers regarding the changes at Continental and Northwest.

I’ll start with Continental because its changes were issued first, though not publicly announced. At issue is the program’s decision to eliminate the 20,000-mile off-peak domestic award and revert back to a year-round 25,000-mile domestic award. While I don’t speak for OnePass, I believe the thought behind the original 20,000-mile off-peak offer was to encourage members to redeem their miles at any time other than during the typically busy summer peak periods. Well, after years of promoting the off-peak award, OnePass apparently came to the conclusion that the reduction in miles was not enough to convince people to change their award usage habits. So Continental — with its standard six-month notice — has decided to do away with the award. And I, for one, don’t have a problem with this change.

No, I haven’t gone over to the other side. Rather, I’ve been watching this industry change since 1986 and have kept track of the ebb and flow of the tides of change. I’ve learned there is a delicate balancing act that these programs play. The leaders of these programs continually develop and add benefits in an effort to ensure the program resonates with members, while at the same time they must adjust to the changes within the airline industry itself.

So, do I consider this change a big deal? No I don’t. Many people seem to forget that this award was formerly available at the standard 25,000 miles, so its not like OnePass is venturing into unknown territory. In fact, I don’t recall a single email, letter or public outcry that 25,000 miles was too much to pay for an off-peak award before OnePass originally introduced the 20,000-mile award.

OnePass, like other airline programs, constantly changes the way in which it makes awards available. Last year OnePass offered a free ticket to Tokyo for only 25,000 miles. More recently, the program offered a free ticket to Germany for only 25,000 miles and an award sale to Mexico. And Continental is one of a small number of airlines offering special weekend awards for as few as 12,500 miles. Call me what you will, but it seems to me that the adjustment to the off-peak award is more than offset by the savings OnePass members derive on a year-round basis from these special awards.

No, I don’t have a problem with OnePass returning that award requirement to 25,000 miles. I do have a problem with Continental’s Chairman, Gordon Bethune, stating publicly that there would be no major changes in OnePass during this year. I’ve met this man and he’s a straight-up guy by all accounts. These things happen, as I know all too well in my own business. But for Continental to pretend it didn’t happen is a mistake. A word from Mr. Bethune admitting to the mistake would have been enough to make me feel OK about it. But to do nothing is not good business and, while Continental can be rightfully proud of its financial track record right now, the airline is still not in a situation where it can stick its head in the sand.

This is not a new problem at OnePass. The program’s leadership has repeatedly dodged the FlyerTalk Live! chat. In fact, OnePass is the only major frequent flyer program that has avoided facing its membership in this live Q&A format. Delta, Northwest, United, American, Southwest (should I continue?) all answered the call. Continental still remains MIA. There’s a pattern here and it is not a good one.

Now on to Continental’s partner in news — Northwest WorldPerks. I’m fine with the WorldPerks change for the very same reasons I am fine with the OnePass change. The only difference is that WorldPerks has a better handle on how to communicate with its members and the media than OnePass has right now.

Let me give you one more reason why I’m fine with these changes — America West, US Airways, Frontier and Southwest all have awards in this category at lower levels. If this change is that important to me, I’ll change my program of choice. After all, isn’t that why and how these programs were supposed to work in the first place?

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