Randy Petersen's Opening Remarks – February, 01 2008

Randy Petersen's Opening Remarks – February, 01 2008

Last month I was waxing about the transition of the Continental Airlines TravelBank credit card program and this month I’m back with more on the credit card front, but it’s with a report on progress in the industry. I’m starting to believe that these are all just credit card programs in which airlines are the partners, not the other way around.

A month ago I got a heads up from Jeff Robertson, General Manager of the Delta SkyMiles program, that one of the most exciting SkyMiles additions in 2008 will give any SkyMiles member who has a Gold or Platinum Delta SkyMiles Credit Card from American Express, a brand new way to use their miles. This “Pay With Miles” program, set to launch in early 2008, will allow cardholders to log on to delta.com, search for travel, and then choose to pay with the miles in their account (all miles — whether earned on the card or elsewhere) or with a combination of miles and money. That in and of itself doesn’t sound like that big a deal, but let me explain why it is a huge deal. I should point out, it’s nothing new, and it took two years of preaching and goading from me for it to come about. Flashback to January 2006 when I stated: “Best Idea Today: Delta Air Lines SkyPoints credit card from American Express. Okay, we do beat up on SkyMiles from time to time but this new credit card product does have some promise, since it easily checkmates some of the challenge by Capital One, in that members can earn no-blackout date award travel and leverage their spending for real dollar savings against airfares they shop for.”

It was too early, since neither Delta nor American Express had the vision to push that product further and it languished from view (except here at InsideFlyer). While the card had a back door relationship with the Delta SkyMiles program, it was not heavily promoted, and the card today is still not featured or mentioned on the Delta.com Web site except for a small mention in the Delta Newsroom.

But it appears that with the success of the Choices program at United Mileage Plus (I’m their unofficial champion and spokesperson for that program) and the new TravelBank credit card from Continental, Delta SkyMiles (not SkyPoints) and American Express have finally, after two years, got it together. And I think this move by Delta SkyMiles may just be what it takes to open wide the award availability question. It looks to me that Delta was able to use SkyPoints as a testing ground for paying with miles. What Delta is saying is that you’ll be able to shop for a Delta product through their reservations system and pay with miles or miles and money. It is likely that the exchange ratio will be a mile for a penny, and that is good value for most members when it comes time to get the award seat you want. For others, the regular award chart system still has great value when you know how to use it.

This change of creating a level of transparency with the members of these programs about the number of seats available will likely be felt far and wide and mimics other initiatives elsewhere in the world. And it puts pressure on Chase and their Choices program at United where only credit card earned miles can be used to pay with miles and cash awards. While it has taken two years for Delta to realize what they had, and to catch up with some other programs in this area, at least they have set a new standard and this might cause American AAdvantage to contemplate a move in this area.

Now on to something really cool. Northwest WorldPerks Platinum elite members will receive 1,000 bonus miles if they do not receive their complimentary upgrade on flights operated by Northwest Airlines, Compass Airlines and Mesaba Airlines with a first class cabin on paid flights eligible to earn miles between the U.S. 48, Alaska, Canada, Mexico, the Caribbean and Central America until Feb. 28, 2009. As well, Alaska Airlines MVP Gold members who aren’t automatically upgraded to the first class cabin will receive one complimentary premium beverage of their choice and will be personally greeted by a member of the flight crew when they are seated in the main cabin. I can’t think of any other program in the entire world that worries about their elite members if they are not upgraded, much less seems to care. But these airlines do. In my mind it’s not really about the miles or the beverage since members get plenty of these chits as part of their benefit package, it’s about the thought.

Now, this time of the year for 20 years now you’ve heard me talk about the Freddie Awards. Yes, those awards where you as readers share your thoughts with other members on which loyalty programs in the world are worthy of high praise. Twenty years, I can’t believe it. That’s a long time, and I give my personal thanks for your support year after year by voting and making a difference on which programs can truly be recognized as the best in the world. This April 24th we’ll be in Phoenix to announce the results and I want to acknowledge those sponsors who help us put this thing all together: Awards for Mortgage and Real Estate (rates are low again, time to re-fi!), Points.com (check out the new GPX program), Priority Pass (best lounge program on earth), ICLP (who knows better what makes a great program?) and American Express Executive Travel/SkyGuide (it’s what I read at 33,000 feet). And yes, VISA will again be sponsoring a lovely dinner at the event.

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