Randy Petersen's Opening Remarks – August, 30 2006

Randy Petersen's Opening Remarks – August, 30 2006

As I have for many years, I’ll offer up some additional advice to the airline industry and in particular to one airline. When the research was completed for this month’s cover story, I casually glanced over the results, not sure what to expect. After all, it was research repeating something we did two years ago (August 2004), that is, make hundreds of phone calls and online requests in search of the mythical frequent flyer award. The idea for this came out of a recent poll on WebFlyer.com that indicated a continuing perception that there were no awards out there. As we have continued to cover the topic — after all, the only thing more relevant to these programs is a first-class upgrade — we are always stumped since the facts continue to show that there are many awards available to members, facts established by us and at least one additional organization with a very stellar reputation — Consumer Reports.

I was just putting the research aside to turn to another project when something really caught my eye. The results of the US Airways Dividend Miles research. If I was reading the research correctly, members of the Dividend Miles program were unlikely (in this random city selected research), to be able to acquire a pair of award seats 86 percent of the time when using their online redemption tool. A success rate of 14 percent is absolutely unacceptable in any business, in any relationship. This is absolutely the worst statistic that I ever recall in all the time we’ve ever done research on award redemption. Obviously they rank dead last in a ranking among the programs and the city pairs we have chosen to represent award redemption. And by a large margin. But when we re-analyze the very same research, we see that the Dividend Miles program ranks #2 overall for award redemption success with their call center, owing to the fact that the center has the ability to access the award availability of their partners — all using Dividend Miles for redemption. Could there be any greater larger gap? Fourteen percent online award redemption success vs. an 83 percent call center award redemption success for the very same destinations and dates. We cannot emphasis enough that this type of disparity is one of the leading causes for the perceived (and in this case actual) absence of frequent flyer award seats.

Now comes the free advice. If I were US Airways Dividend Miles, I would proactively and immediately make changes to my online booking tool. Understand that not every member of this program knows how to redeem their miles, that they know how to determine which legs of a hub award are not booking correctly or know how to access partner inventory within the online Web site (they can’t). Literally I would forget everything I think I know about members these days.

You have an excellent opportunity to present your story in a positive way. Add specific pop-ups on your online booking tool that whenever a “No Awards Available” return is prompted to the member, a bold message also alerts them to the facts that “No” does not mean no. That there are many more choices available to the city of their choice and you look forward to helping them by calling XXX-XXX-XXXX. Just think, in 83 percent of the situations in our research, members could have really gotten what they wanted for their award redemption if only they would have known to call the service center.

Sure, this will cost you. Putting your members on partner airlines can be costly, but I would ask you, “What is more expensive, United or one less paying passenger?” I can tell you right now that if a Dividend Miles member complains to me about award redemption (and they have…) I would have no qualms in referring them to American AAdvantage, which repeats as the best overall award redemption program among those programs we researched for this issue. There you go.

You boast of the advantages of online award redemption. You say:

  • There are no fees for redeeming miles at usairways.com.
  • Award travel reservations can be made up to six hours prior to departure.
  • Convenient e-tickets are issued and a confirmation e-mail is provided.

    There are no advantages to not being able to use your miles.
    I would also change your rules for open-jaw award travel. Who the heck cares where a member returns from as long as your revenue management people have allowed an award to sneak into the system and forget the rule about the distance exceeding the outbound or return trip. I remember when you had fine print restricting “mileage runs” as well. Again, your inventory is controlled so this is hardly an issue. I know, it’s all related to prohibiting one-way awards. Excuse me, but I’m pretty sure that you actually have one-way awards in the current way that you allow members to combine Mileage Saver, Premium, Coach and First Class awards in the same itinerary for award flights.

    To make up putting your members on United, raise your fee for calling the service center; $5 is far too cheap and by raising it to $10-15 you’ll easily make up the difference or at least invest in what it will take to get these things straightened out. I supported this program and airline when it was down and out and continue to do so now that it is up and running, but you need to listen to me. If you do, we’ll take you from worst to nearly first.

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