60 Seconds with Northwest WorldPerks

60 Seconds with Northwest WorldPerks

When any airline goes into a Chapter 11 reorganization, it’s only natural for members of its frequent flyer program to start to worry about their miles and the program changing. This is an edited transcript from a recent online chat with Russ Hinckley, Managing Director, Northwest WorldPerks.

FlyerTalk Live!
Why does Northwest not give Platinum Members International upgrade certificates like UA, AA and Delta?
Russ Hinckley
The demand for our new World Business Class product is very strong and the supply is quite low. As a result, this is an expensive proposition for Northwest that we have chosen to not match at this point. Thanks for your question.

FT
Will there be some sort of reciprocated upgrade system between Northwest and Delta?
Russ
We are currently looking at this, but I would say it is unclear when or if this will ever happen.

FT
Could you please consider letting customers hold one-half of an itinerary — just the outbound portion — if award seats for the return haven’t been loaded into your system yet? When calling Northwest for awards 330 days out, I may find availability outbound, but return dates 1-2 weeks later aren’t in the system. Yet, because it’s >330 days out. The Northwest agent says I can’t hold just the outbound, so if I don’t want to lose it, I must hold a fake return, e.g. the day after the outbound. So somebody who really wants that return seat is told it’s unavailable because I’m holding it, and I don’t even want it, I just have to hold it as a “placeholder” because I can’t hold only the outbound! Then every day I have to call back and try to change the return, sometimes one day at a time until if I’m lucky I get the date I want. This wastes everyone’s time — mine, agents’, other customers’.
Russ
I will discuss this with our systems and operations groups. I can appreciate the challenges associated with our current process. At the same time, the reason that we strictly avoid one-way award travel is to limit business travel substitution. Awards being used for business travel really increase the cost of the program and, consequently, we try to build fences to limit business travel opportunities with award tickets.

FT
We’ve heard from Northwest management that nothing will change with WorldPerks, so we don’t need to address that now. But it seems that neither customers or employees know what’s in the offing. Why should we stay loyal to Northwest when we don’t even know if our flights, routes, etc., will still be in existence?
Russ
Yes. The company, program, schedule are going to survive. Fortunately, Northwest has some tremendous assets that will help us get through this challenge.

FT
Several members have recently reported receiving comps to Silver or Gold through Febuary 2006, with promotional offers to requalify thru Febuary 2007 with two qualifying flights for silver or five for gold — can you explain if these offers are targeted, and how? Some have speculated they may have received these offers due to elite status with particular hotel chains or other airlines. I am silver with Marriott, and my husband and I are both gold with Hilton. A comp to Northwest Silver elite would certainly “incentivize” us to fly Northwest more often! Is this possible?
Russ
We frequently make member development/trial offers. They are always targeted, but I don’t think it serves me well to discuss targeting parameters in a public forum. A huge part of my job is to always be testing members and non-members to see if I can capture more of their travel spend. Development/trial offers are a powerful tool to test if there is more money to be had. We would have to talk about an individual incentive off-line.

FT
Can you explain the discrepancy in taxes and fees for two people using miles on the same exact flights, same dates, but one using Contiental miles and the other using Northwest? Delta’s taxes & fees (using Continental miles) are $75.81, my taxes and fees (using Northwest miles) are $104.01. Why is there any difference, given that we are flying on the same exact metal, in the same class of service, on the same dates, using the same number of miles? Thanks in advance.
Russ
I have spoken to our tax group about a situation like this for award travel to Mexico. The difference comes from an interpretation difference about the tax law; of course, our tax group believes their interpretation is correct. Since I am not a tax attorney, I trust their judgment.

FT
Why doesn’t Northwest allow one-way award bookings?
Russ
We try to build fences around things that would encourage the substitution of award travel for business travel. This type of substitution would make WorldPerks a much more expensive proposition for Northwest.

FT
Why can’t I book award seats on Northwest’s website for flights on Continental, Delta, etc.?
Russ
You can book award seats on nwa.com for all of our biggest partners, including: Continental, Delta, Alaska, KLM, Air France, and Aero Mexico. We are working on getting all partners available via nwa.com but it will take some time to complete; building this capability is not a high priority for some of our partners.

FT
If I move to Europe and have my miles transfered to Flying Blue’s program (KLM’s frequent flyer program) is their anyway to get my miles back into Northwest Worldperks later?
Russ
Yes. We have made arrangements for tat with Flying Blue for people to transfer back to WorldPerks. I would also like to talk about the size of our Elite tiers since some members get concerned about their benefits being diluted. We always watch the size of our Elite tiers closely. We also monitor our domestic upgrade success since it is size sensitive. I am very confident that we will continue to upgrade Platinum Elites at the 90% success level.

FT
Russ, your member’s guide has the following rule. “If no mileage from any source is posted to a WorldPerks member’s account for three consecutive years, the account is subject to termination, including forfeiture of all accrued mileage.” With the filing of Bankruptcy, is Northwest considering enforcing this rule?
Russ
Although I believe this rule could be a useful lever to drive more program activity if enforced, we are not planning on enforcing it anytime soon. Operating in Chapter 11 is a strong incentive to not make any program changes that could irritate our members. Obviously, we are relying on our WorldPerks base to help pull us through the most challenging environment airlines have ever faced. I got a big kick out of many “experts” talking about programs being in jeopardy because of a Chapter 11 filling. In fact, I believe the most stable period you will ever see in any program is when a carrier is in Chapter 11.

FT
Platinum Points: any chance that this promotion be improved so that it is more relevant to most Platinums? I fly a lot, some high fares, some international but get little in returns from Platinum Points to encourage me to do more.
Russ
Platinum Points is only targeted to high value activities. It wasn’t meant to reward everything. However, I am the first to admit that Platinum Points has many shortcomings and I haven’t been too excited by our results. I am committed to running it one more year and seeing if we can learn enough to design a better program for the future.

FT
How does your system determine who gets upgraded on paid tickets when there are multiple travelers with the same elite status?
Russ
We do look at a number of factors. First we sort by tier, then revenue, then LT value factors, then time of ticketing. I think it works very well and is the strongest benefit of our program.

FT
I understand that fleet configuration is not within your realm of control but I’m very concerned with the pending removal of Mesaba’s ARJs from the fleet. I believe that most elites do anything possible to avoid CRJ’s in the schedule as they are the most uncomfortable plane ever made but airline economics dictate use of such an efficient airplane. So if the ARJs are removed, has any thought been given to possible perks for having to travel on equipment without first class like the CRJ? Is automatic seat blocking for elites provided space is available a possibility? A couple of drink coupons would be nice 🙂 Thank you for your time. Have a great day. Cameron
Russ
I appreciate your suggestion and feedback. We will look into this.

FT
Why doesn’t Northwest enhance the travel experience by doing the “Free stuff” Elite boarding happens around 50% of the time, welcoming by name on WBC about 20% of the time?? (oh and by the way the food on WBC is awful — have you ever had the dessert?
Russ
We started an experiment earlier this year with our Ground Services group where they would skip pre-boarding Elite customers when the flight consisted of over 60% Elite members. Before agreeing to this test, we looked at how many times this might occur and the number was very small. We also establish a tracking system that would allow us to review when an agent didn’t offer Elite pre-boarding to see if the flight actually met the 60% parameter. Bottom line: skipping pre-boarding should almost never happen. Based on this question, I’ve set up a meeting with Ground Services to make sure the terms of our agreement are being enforced. If they aren’t, the test will be over. I will discuss your feedback about the service with InFlight. I tend to eat the dessert. But I tend to eat everything in sight.

FT
Why is there no incentive to fly more than 75,000 miles on NorthwestA…how about some incentive threshold awards.
Russ
I understand that we have an issue here. People don’t feel rewarded for going “above and beyond” and have the potential to divert their business to another carrier for status consideration after achieving our 75,000 mile threshold. At the same time, developing four differentiated tiers could be costly for Northwest and may provoke a competitive response that could be damaging. I prefer to continue to make private offers that reward customers for extra stretch and not introduce a permanent fourth tier program feature at this time.

There’s more. Go to http://www.flyertalk.com/transcripts/100605.php to read the entire transcript

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