Opening Remarks – September, 24 2004

Opening Remarks – September, 24 2004

My head is filled with thoughts this month — too many to fit in the pages of this magazine, in fact. While I will shortly begin picking a little on American, United and even Delta, and lauding Northwest and OnePass, I must first direct your attention to and, and our comments on what might be the most interesting new credit card offer in years. Called PREMIERPASS by Citi, the card was announced just as we were going to press, and we’re thinking it will prove to be a suitable card for some of your wallets. I wish the timing had been better for us to write about it now. I know, so many offers, so little time.

OK, my dig at American and United. It’s about their 15,000-mile award offers for flights less than 750 miles.

As many of you probably do not know, these offers were pioneered years ago by our friendly frequent flyer programs up north. Both Canadian Plus and Air Canada Aeroplan had them for years, and here in the U.S., America West began offering 15,000-mile awards over a year ago.

So why have American and United decided to jump on the bandwagon now? I’m thinking it’s for two different reasons: 1) to ward off competition from low-cost carriers’, since most of these carriers have point-to-point flights within those distances, and 2) this might be an attempt to change the redemption patterns of members, as most members tend to earn miles on short haul and burn miles on long haul. Given that the major carriers are trying to protect premium-class services and benefits on long haul, these short-haul awards might help to burn off a lot of miles.

I can’t really complain about the offers. They open up the opportunity of free travel to the mileage have-nots, without negatively affecting the haves. It’s certainly not a bad PR move either — the number of members with 15,000-25,000 miles in their accounts vastly exceeds those who have more than 25,000 miles. And when you consider United offers 15,000 miles as a sign-up bonus for their BankOne Visa card, now you’re talking about getting a free ticket for $60. Any way you slice it, that’s a good deal.

But here’s my concern: I strongly believe United and American are both focusing on the wrong competitive factors (low-cost carriers and long-haul award benefits), when the thing they should be focused on is the satisfaction of their current members.

Members have never complained that 25,000 miles is too much to spend for an award ticket. What they have complained about is the lack of award availability at that redemption level, and that 50,000 miles is too much to spend for the same award. Note to the industry: you should not be competing against each other to see who has the better award chart, you should be competing to see which program can best satisfy the award redemption requests of its members. End of sermon … for now.

OK, onto Northwest WorldPerks. No other program in the world today is exhibiting the creativity and execution that this program is. In reading this issue, you’ll come across Northwest promotions named Mileage Connection, Mileage Accelerator and Mile-Zilla. Even if you are not a member of WorldPerks, go read about these mileage promotions and tell me they aren’t: 1) clever; 2) providing great value for members; and 3) something you wish your program was doing.

Northwest, I hope you’re reading this because I want you to know I am wildly in love with these promotions. And if you are reading this, please reach over and give your alliance partner Delta a little stir because I think they might have dozed off over there.

Next up, OnePass. I’m not ashamed to tell you I’ve never liked the OnePass model for redeeming miles for BusinessFirst awards, as it also requires a payment of cash. Now they have raised their ‘ransom’ on some of these awards by $50, citing the need to balance out lower airfares. But, after reading and comparing the fine print, I am willing to give OnePass a little break — just a little one. I have noticed that many other programs don’t allow members to upgrade to a premium product at all from lower fares. So, while I remain on record as being displeased about having to pay hundreds of dollars while redeeming tens of thousands of miles for BusinessFirst, at least now I can compare their strategy with other programs, especially the alliance with Northwest and Delta.

I guess I can’t stay too upset with OnePass, especially given the fact they have recently introduced what I would classify as quite simply the most useful award-planning tool available today to members of any frequent flyer program. OnePass’ award calendar allows members to see with their own eyes the availability of awards over a two-month period — taking away the time and pain of resubmitting date after date in hopes of getting the free seats you want.

I really like this idea. In fact, I liked it so much I took the time to scout around and find out what this type of thing costs. Turns out it is not a major investment, costing far less than a million dollars. Why do I bring this up? Because those programs that have failed to invest in tools to make the award redemption process better and easier for members should be absolutely embarrassed to hold their hand out for a few extra bucks when a member uses a telephone. Most of the time, we revert to the telephone because the online tools airlines have supplied are not even second-class investments.

At least Continental OnePass has begun to do something about this. So the question to all the other programs is: Where’s the beef?

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