We take a look back at 2008. What happened, how frequent flyers reacted and what, if anything, you can do about it.
It’s been a bumpy year for the economy and frequent travel loyalty programs. It will no doubt go down in history as not only one of the most volatile, but you could argue, life-changing for many people. In a few years’ time, no one will remember what it was like not to pay extra when checking in your luggage or to pay extra fees for just about everything related to your membership in frequent flyer programs. Humans are creatures of habit who sometimes have to change their habits depending on their environment. So, we’ll adjust.
We decided that with 2008 coming to a close, it’s time to take a look at the world of miles and points: what happened, how frequent flyers reacted and what you can (or in some instances, can’t) do about it. And here’s to less turbulence in 2009.
Want to fly free? It’s gonna cost you
The year 2008 will be remembered as the year of fees. Just about every airline frequent flyer program added more fees to award redemption and in some cases, upped the mileage members need to get some awards. Southwest decided to take the high road with fees and went so far as to create a marketing message around it, “LUV is freedom from fees.” But it’s interesting to note that the onslaught of fee changes began on Jan. 29, 2008, when Southwest began charging for a third checked bag. We won’t go into all the specifics of all the fees that have been added this year, but will point out a few.
US Airways started charging $5 for a window or aisle seat, but not if you’re elite, and also started charging for sodas in coach. Several programs raised the cost in miles to redeem awards and Delta added a fuel surcharge to award tickets: $25 per roundtrip on award tickets between the U.S. 50 and Canada and $50 on award tickets between the U.S. 50, Canada and all international destinations for all members. “We hope this is temporary, and should fuel prices subside from current levels, we will reevaluate this surcharge,” said Jeff Robertson, managing director of Delta’s SkyMiles Program. We saw this move by Delta as a last resort because we know that the airline had started charging their own employees fuel surcharges when flying on “buddy passes” as early as April. Just last month, the airline announced that effective immediately, the fuel surcharges would be eliminated–Delta kept their word to reevaluate the charges.
Northwest Airlines also added award fees, but there was no mention that these were temporary–$25 for domestic, $50 for transatlantic and $100 for transpacific. Travelers will have to wait to see which fee structure stays in place once Delta and Northwest complete the integration of their frequent flyer programs.
American AAdvantage added a non-refundable co-payment of $50 to claim one-way upgrade awards used with most discount coach fares when traveling within the continental U.S. and Canada; within and between the continental U.S., Canada, Mexico and the Caribbean and between North America and Central America. Another charge, $5 for online AAdvantage award redemption, quietly disappeared without notice sent to the members.
Midwest Miles added a $25 transfer fee to convert Midwest Miles to partner program currency. United Mileage Plus members were told that the cost to change an award was going up from $100 to $150, and to call to book an award flight will now cost you $25, up from $15. Alaska and Delta implemented $25 fees when booking award travel on partner airlines.
Like we said, we’re not going to go through all the fee changes for this year brought on by rising fuel costs, but suffice to say, it wasn’t pretty.
Most of the programs that upped the mileage to claim awards did so for first class flights, but on Sept. 15, Frontier Airlines’ bargain domestic roundtrip award went from 15,000 miles to 20,000 miles. At least they gave their members about a month’s notice to cash in on the “good ole days.” Alaska Airlines also gave members a good amount of time to burn miles at the former 20,000 miles for a domestic roundtrip flight award before the new 25,000-mile award came into effect on Nov. 19, 2008. Kudos to Alaska for keeping some of the “good ole days” alive by introducing intra-state awards for only 15,000 miles for roundtrips wholly within one of these states: Alaska, California, Idaho, Montana, Oregon or Washington.
InsideFlyer reader, Mark Terry, had this to say, “… the airlines are starting to charge for booking award flights, plus for making reservations on the telephone. I am thoroughly disgusted. This miles-and-points game is a game fixed in the favor of the airlines. And it is a game that we, the consumers, cannot win.” Another InsideFlyer reader, John Riedy, said, “Who likes to be nickel’d and dime’d to death? I think the airlines are annoying customers to the extent that we will cry “UNCLE” and demand they raise fares to cover the extras. At least, I hope that’s what they’re doing.”
If recent news reports are true, travelers can expect fees and the unbundling of services to continue. The Arizona Republic says US Airways CEO, Doug Parker, called the airline the most aggressive U.S. carrier on the fee front, “big fans” of so-called a la carte pricing. “You never say never because competitive forces could eventually force us to turn back, but we certainly hope that’s not the case and don’t believe it will be,” he said. And there are recent rumors that American AAdvantage will someday give flyers the option to pay less when foregoing earning frequent flyer miles.
So our advice is to learn to live with it. Take deep breaths and get to elite to avoid many of the fees.
No miles credit card brought to you by Continental Airlines
Continental Airlines TravelBank World MasterCard was a new credit card option for customers of Continental offering, “Any flight. Any day. Any fare. Any place,” but no miles. That’s right–instead of miles, travelers can earn TravelBank dollars that they can spend on tickets purchased at continental.com.
In Randy Petersen’s Opening Remarks, he said, “Travelers who acquire the new Continental Airlines TravelBank World MasterCard can look forward to no official relationship with Continental’s OnePass program, no bonus miles for sign-up …” However, he ended his remarks by saying, “But I have a suspicion that today’s TravelBank credit card is going to be pretty popular.”
Has the card been popular? We asked Rick Wagnor, Continental’s director of partner marketing about the card’s popularity, and this is what he had to say: “The spend on the card has exceeded our expectations and has proved popular with customers looking for a way to save on airfare.”
Are cash-back credit cards more popular than cards that give you miles and points? Not according to our research. More than 60 percent of those we polled in September 2008 answered that earning miles/points was the credit card feature that they feel is most important, beating out low or no annual fee (around 20 percent), low APR (around 9 percent) and cash back (at only 5.5 percent).
United and Delta also offer credit cards that earn currency that can be redeemed toward the cost of a flight. You can expect to see more offers like these cards–at least more ways in which frequent flyers are offered alternate ways to get award seats. Ultimately, the airlines do want to give you what you want–a free flight–but the reality is that there are way too many people going for that one free seat so the next best thing is to offer flyers the flexibility to get the flight they want without capacity controls or blackout dates–it just might not be completely “free.” If your interest has been piqued for this MasterCard, visit http://www.insideflyer.com/link/?1263 to learn more.
If you have nothing better to do and a lot of time, here are some miles for you
In 2008, Microsoft’s Live Search Club received lots of attention from frequent flyers. You can earn FFP miles when playing online word games. When playing the online games, you earn tickets that can then be redeemed for frequent flyer miles–at the lowest redemption level, 1,000 tickets will get you 500 frequent flyer miles. The most you can redeem is 4,300 tickets for 2,500 miles.
As one FlyerTalk member stated, “I was already addicted to Chicktionary … like I needed an excuse.” Chicktionary is one of the games where members can earn up to 20 tickets per game play. Another FlyerTalk member mentioned, “I played a lot one night to see how far I could get. Around 1,100 I got a message saying I had earned the maximum amount for the day. I couldn’t spend that much time reaching it again, but it was nice to know the limit.” Yes, indeed, it’s always nice to know your limit. But not everyone is willing to take the time, “Too much time for too little,” said FlyerTalk member Flyingstudent. With Microsoft’s Live Search Club, it not only takes time to earn the tickets, but then a lot of patience to wait for the miles to show up in your account.
If you’d like to earn miles while exercising your brain, visit the ultimate FlyerTalk threat at www.insideflyer.com/link/?1287 to learn all about it. The total miles you can earn is up to 2,500 miles in your choice of the following airlines: Alaska Airlines, American Airlines, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, Midwest Airlines and US Airways. If you’re ready to earn miles, visit http://www.club.live.com – And what does Microsoft get from this? While you’re playing the games, searches are being made on the Live search engine, which artificially inflates their independently measured share of the search market.
Give us your miles, or give us your cash, or give us your miles and cash, but only if you have an AMEX
Delta SkyMiles members who own a Gold or Platinum Delta SkyMiles credit card from American Express could take advantage of a new “Pay with Miles” program where cardholders can log in to delta.com, search for travel and then choose to pay with the miles in their account or with a combination of miles and money. The miles can be earned from any source, not just from credit card spend.
“Sorry, but I’m not going to blow 25k miles just to get $250 off and give up my Medallion upgrade and MQM/mileage accrual,” said FlyerTalk member, rylan.
In Randy Petersen’s Opening Remarks, he said, “…this new credit card 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.”
If you cannot find an award seat solely with your miles, this is a good option, especially if you are already a Gold or Platinum Delta SkyMiles cardmember paying the slightly elevated membership fees. The Gold card comes with a $95 annual fee (with the first year free) while the Platinum card annual fee is $150, unless you are also the Basic Cardmember of a domestic American Express consumer Charge Card account that has an annual fee greater than or equal to $55, in which case the annual fee is $95. To apply for the Gold card, visit www.insideflyer.com/link/?1288; and for the Platinum, www.insideflyer.com/link/?1289.
Don’t look now, but your elite members just flew the coop
In a bold move, US Airways did away with elite flight bonuses for their best customers. In June, US Airways announced to their most faithful flyers that as of Aug. 6, 2008, they would no longer earn bonus miles when flying as elite members. The airline explained that this change was necessary because, “By reducing the number of bonus miles issued, US Airways is in a better position to withstand the impact of record fuel prices.”
“The elimination of bonus miles for elite members places the Dividend Miles program firmly at the bottom of the frequent flyer program pile” is just one of the statements made on SaveDividendMiles.com, a Web site launched by Randy Petersen, in “… a grassroots effort to try and convince US Airways that this decision is not in the best interest of their elite members. And at the end of the day, not in the best interest of US Airways’ future.” At time of press for this magazine, more than 2,650 frequent flyers representing more than 1.6 million miles had signed the online petition to ask US Airways to reverse their decision. And note this comment from FlyerTalk member saturnsk in a thread this past September, “US Airways should have just upped the mileage redemption to 50k per ticket instead of cutting out bonus miles … but then again, they are trying to get rid of their business/frequent travelers.” And a final note from our editor, “I estimate that elite members of Dividend Miles are losing out on about 20,600,000 bonus miles daily that members of other programs are earning because they chose a richer program.”
There’s not a lot you can do about it at this point except continue to let US Airways know how you feel. But even with the outcry from members and the nearly 2,000 who signed the online petition, US Airways has not changed their minds–bonus miles for elites have not been reestablished. We even suggested to US Airways a way out–to give the bonus to elite members who have a co-branded credit card, but it didn’t fly with the powers that be at Dividend Miles.
Now you see them, now you don’t, now you see them. What? You don’t? You’re obviously not an elite member
In early September, Continental announced that it was doing away with earning 500 minimum miles on short haul flights; instead, OnePass members will earn actual miles for all qualifying flights booked on or after Nov. 15, 2008 for travel on or after Jan. 1, 2009. But then, they came up with another idea–offer the 500 minimum miles for elite members only.
“The elimination of the 500-mile minimum will kill me,” said FlyerTalk member, Stripe. And many lamented that Continental was lining itself up with soon-to-be fellow Star Alliance members, United Airlines and US Airways. But after Continental was faced with a deluge of negative remarks from members, they made an about face and announced on FlyerTalk.com that they would reinstate the 500-mile minimum for base miles and elite qualifying miles for OnePass Elite members. Scott O’Leary, managing director customer experience, posted this in a thread “..suffice to say after hundreds of posts and messages received here at headquarters, it was clear that the elimination of the 500-mile minimum was the most impactful to many of you.”
The lesson to learn from this is that if you raise enough stink, you just might be able to make a difference. And it helps when the people making the most noise are the best customers. As O’Leary mentioned in his post, “As always, thanks for your feedback. It really does make a difference.”
Another lesson to learn from this (and I’m sure you’ve all already learned this particular lesson) is that the airlines watch each other like hawks and if one makes a change and “gets by with it” another will likely follow. In this case, American AAdvantage and United Mileage Plus recently announced that they will be following in Continental’s footsteps to award 500 minimum miles on all qualifying flights only to elite members. United went so far as to give their elite members retroactive credit for the miles they’d missed out on–just in time to help them gain elite status.
And you thought only airplanes and birds could fly
On Sept. 2, Starwood introduced SPG Flights where members can now redeem points for the entire cost of a flight (including taxes and fees) on hundreds of carriers, both domestic and international. There are no flight blackout dates, but the number of points required for flights during high demand travel times may be higher. Additionally, members can earn miles on flights booked via www.spg.com/flights, but members are instructed to contact the applicable airline to verify.
“It’s an interesting concept. But I’d much rather use the points for great hotels,” said FlyerTalk member attorney28. And barrytel commented, “Still, I guess the new service is better than a poke in the eye …” But sbtinme suggested travelers shouldn’t be so quick to discard the new option, “I disagree to some extent. This program is clearly NOT for everyone, but many people are sitting on hundreds of thousands of SPG points (I have many colleagues in this position) and this is a solid addition to the SPG program. This option to book air travel is a viable option for last minute award travel without the endless booking fees and last minute ticketing charges applied by every domestic airline.”
The best way to look at this new offer is to see it as a vehicle for flexibility when you can’t be as flexible as you sometimes need to be when booking an award flight. And don’t forget–you can earn miles when taking an SPG Flight award.
The points to nowhere program
Virgin America was quick to launch its frequent flyer program, Elevate, even before the airline’s first flight in August 2007 and promised members that they would be able to redeem for a free flight with as little as four roundtrips. But then, the airline did not announce an award schedule for more than a year. More than 500,000 members could earn points with no way to spend them until the program finally introduced their award schedule in October 2008. To make amends to members, all points earned through Sept 30, 2008 will not expire until March 30, 2010.
“Like has been said before, Rapid Rewards with mood lighting,” said FlyerTalk’s eponymous_coward. And this from itsaboutthejourney about Virgin America’s online award options, “I’ve been playing with the site and like the toggle between paying with points or cash. Looks good so far. I just wish VX had this in place a long time ago, to build even more loyalty.”
Look for the Elevate (formerly known as eleVAte) program to evolve over time. Virgin America continues to ask for feedback from members and recently introduced a fee-free credit card that will help them pad their points balance in the race to earn enough points to redeem for a flight award–the points expire after 18 months.
The Elevate program is different from most in that the number of points required for a flight is based on the fare price and increases in direct proportion to the cost of a flight. The program does not have blackout dates or capacity controls and if there is a seat available, you can purchase it with points. Members earn points depending on the cost of the flight–you earn five points per dollar spent on Virgin America flights.
Book online, or else, and you can forget about bonus miles
It’s a trend that’s been around awhile, but really came into focus in 2008. The airlines want you to use the Web site for award bookings, full stop. In April, American Airlines AAdvantage was the last of the major programs to drop the bonus when booking online.
Not much of a reaction at all. It was nice while it lasted.
It still pays to use the Web over calling in for your award flights–you’ll save the service fee, which for most airlines went up during 2008 and currently hovers around $25, depending on the airline.
Continental OnePass knows when to show ’em
It’s always fun to see a program go out of their way to engage members and this year, the prize for over-the-top entertainment goes to Continental OnePass when they celebrated their 21st anniversary with a three-day poker tournament in Las Vegas. The last player to walk away from the tables got a cool 21 million OnePass miles.
Randy Petersen blogged live from the tournament, “According to the pit boss (a term I saw in a Vegas movie one time), there are a wide variety of players in this tournament, from those who have never touched cards before to some very experienced players. This makes for a very difficult play since the more experienced players never know what the ‘rookies’ are going to do. They are referred to as ‘the great unknown.'” And what can 21 million OnePass miles get you? Among other options, “… 840 domestic coach class tickets at the current 25,000-mile SaverPass level (that is 1,680 times you’ll have to take off your shoes by request of the TSA).”
It will be interesting to see what the other programs pull out of their hats as their anniversaries come around.
R.I.P. Aloha Airlines, ATA, ExpressJet, Eos Airlines and MAXjet
With the price of fuel skyrocketing, several airlines were not able to survive and most of their frequent flyer program members lost all of their miles. But most importantly, many people who worked for these airlines found themselves without a job. It was certainly a sad day for the employees of Aloha Airlines when they found out that their beloved airline, an airline with a strong Hawaiian history, would not survive into its 62nd year.
“I’m shocked–I’ve lost over 100,000 miles. I’d dreamed of traveling to a far away place like Cambodia’s Angkor Wat and was just building up my miles a bit before booking. My trip of a lifetime is gone,” said Jeff Watson, an AlohaPass member.
ExpressJet was one of the few airlines that was able to give fair warning of its demise so that JetSet members had a chance to use their credits before losing them. But even though ExpressJet has been flying planes full of Continental Airlines passengers for years, there was no move by Continental to offer OnePass miles for JetSet credit. And even though ATA was Southwest Airlines’ sole airline partner, ATA Travel Rewards members’ credits were not folded into Rapid Rewards. Such is the hard reality of competition these days. However, there was a silver lining with the ExpressJet demise. The airline donated furniture and other items from their operations throughout the country to assist Lamp Stand Institute and its sister agencies to provide medical, job placement and housing services to veterans.
A strong argument could be made that a good policy with frequent flyer programs is to not hoard your miles. When you have enough for an award, spend the miles, especially if the airline is in Chapter 11.
Bye-Bye, it was fun while it lasted, 50,000-mile saver award to Europe
Delta introduced a three-tiered award schedule in 2008. At the lowest “saver” level, SkyMiles members have to shell out 60,000 miles for a roundtrip award ticket to Europe and South America. And as of Jan. 1, 2009, United Mileage Plus members will have to spend at least 55,000 miles to get to Europe/South America. United gave their members a couple of months notice for all the changes the program will face in 2009–the earliest we’ve seen for a program to announce its yearly changes.
It’s always nice to have fair warning, but the slippery slope to more mileage has begun.
No one likes to see the cost of awards increase, but they usually take it in stride. “I guess its a case of better product (new premium cabins) = higher price. … I definitely won’t be spending the new mileage rates for premium awards on UA until 100 percent of the planes have been refitted,” said FlyerTalk member ivoryboi. Another FlyerTalk member found a bargain loophole, “It seems to me that there’s one particular award redemption level that actually went DOWN pretty significantly, and at this point seems odd enough to be a typo in the chart. Specifically, you can now fly PEK-SIN-DPS-PEK with a stopover in SIN, for less than it would take to fly PEK-PVG roundtrip.” And finally, this from UAPremierGuy, “Obviously, the new award redemption levels, especially for premium travel, hurt, but I can’t say that I’m surprised, nor really as angry as others seem to be. Times are changing, and UA needs to make money; this seems like a good way to do that, without further cutting services.”
Move fast to get Mileage Plus flight awards at the current lower levels before the end of this year.
So, you want your members to like you, to really, really, like you?
In another instance to prove that some airlines really do listen to their frequent flyer program members, Alaska Airlines Mileage Plan backtracked a bit on a planned change because of the instant and overwhelming negative response from members. The “AS50” award offers a 50 percent discount on a flight, up to $250, for 15,000 miles roundtrip. Alaska announced that members would no longer earn miles on the flights when redeeming this award, but quickly reversed the decision before it could take effect when the masses raised angry voices. Mileage Plan members can now earn half the miles and the full flight segments count toward elite status with these awards.
“AS50 will no longer accrue mileage…? Bad move Alaska. Very, very, very bad move,” lamented FlyerTalk member, lalala. Along with, we’re guessing, very, very, very many more similar statements that were aimed at Alaska Mileage Plan–enough to make them give back some of what was taken away.
We’ve said it before, and we’ll say it again, if you don’t like something your program does, speak out and let them know. It might not prompt change, but then again, it just might.