Randy Petersen's Opening Remarks: Deja Dumb/Year-End Advice

Randy Petersen's Opening Remarks: Deja Dumb/Year-End Advice

As someone who takes an inordinate amount of time doing research before espousing my opinion about frequent traveler programs, I do have my moments when all my carefully balanced consideration comes crashing down, in just the same way that one might ask, “What the hell were you thinking?” Moments like that occur sporadically during the year but it’s never better than when it happens near the year’s end and I can have a good look back over my shoulder at the year gone by.

In 2008, I have no sense of deja vu. In fact, it appears to me more like deja dumb. I saw decisions made that nothing in the prior 27 years of frequent flyer history would have prepared me for. I saw bad decisions that would last days, weeks and unfortunately for some, forever. So, let me get this off my chest and call dumb things dumb.

The 2008 Dumb Decision Award goes to American AAdvantage. What were they thinking in adding a $5 online award booking fee for their program back on June 21? While this gem was quietly rescinded in early October, it nonetheless stands out for a few reasons. First of all, AAdvantage became the only loyalty program I know of in the world to require some sort of fee to redeem any award. There was no opportunity to redeem an award, no matter how simple or no matter the outlet, without paying at least $5. American suggested that the fee would help them offset the technology investment the airline has been making to its Web site. Correct me if I am wrong, but isn’t the Web site paid for by those members who don’t like to book online and still to this day call a service center and are charged $20? And correct me if I am wrong, but I can’t remember AAdvantage recently introducing anything specifically to their Web site that wasn’t an offshoot from the airlines’ normal reservations Web site. The award calendar? It was launched back in March of 2007. A little late to begin paying for that wouldn’t you think? And all the AAdvantage enhancements were offshoots of price-and-scheduling tools developed for the aa.com Web site. Did this 13-week period really pay for the technology investments? It could be argued that AAdvantage redeemed nearly 850,000 awards during this period. Assuming that 73 percent of these awards were redeemed online at $5 a redemption, minus the exception for their EXP members, that would mean roughly $3 million in special fees. I’m just not getting this decision–absolutely no way to redeem a single AAdvantage award without paying for the privilege. Sorry AAdvantage, love you, but hate seeing you act this dumb.

And for our next death defying act of deja dumb, let’s venture 865 miles northwest of Dallas to the Phoenix location of US Airways. They decided earlier this year to scrap their elite-level bonus program. Okay, there are still remnants left, but most savvy frequent flyers are now referring to them as US Dare–as in they dared us to leave them by ending elite flight bonuses. The gamble was that most of their more resilient, and thus loyal frequent flyers, would come for the fares and stay for the upgrades.

Not only have competitors been swamped with “elite matches,” but their alliance partners (United and soon-to-be Continental) have circled wagons elsewhere by reinstating the 500-mile minimum flight benefit for their elite members and are continuing with their elite bonus programs, all while having competitive upgrade policies. US Airways seems to think that over 27 years, frequent flyer programs have gotten too generous and that they will lead the industry to a more rational approach in managing their best customers. Truth is, no one else got that email and Dividend Miles is now forced to hitchhike that lonely road.

And a preview of the next deja dumb: Can you imagine an airline trying out a program to charge more for your ticket if you are earning frequent flyer miles? That is the ultimate pay-as-you-fly a la carte enhancement.

Now that I’ve done Dumb and Dumber, let’s move on to more positive news and advice. I can’t stress strongly enough that each and every reader of InsideFlyer should carefully read my following words because for the first time ever, not following my advice to the letter will mean a financial hardship for you in 2009 and beyond. It seems a given that the airline industry is smitten with the new pay-for-what-you-use pricing programs. This most certainly comes home to roost when you travel with any checked luggage. Sure, 75 percent of my time traveling I do a nice job of carrying-as-I-go, and as a result, have bypassed any surcharges for my checked luggage. And thanks no doubt to my passion for staying elite for elite’s sake, the other 25 percent of the time I still don’t pay to check my bag. As you are aware, the ever ranging fees that airlines have decided on as a revenue strategy mainly bypass elite frequent flyer program members. You already know the drill–do not pass Dec. 31 without first passing an elite level. If you don’t, expect a near disaster with the economic blues affecting your travel. But, if you do nothing else by the end of this year, please make sure by hook or crook (more on that later) that you qualify for some sort of elite status so you are not subject to most if not all of the airline industry’s new travel pricing strategy.

Credit cards and mileage runs come to mind immediately but be on the lookout for offers similar to those in the past; elite qualifying miles for partner activity (no flying required) as well as opportunities to actually purchase needed elite miles without flying–yep, I think some airlines will see the wisdom in convincing you to not take a mileage run. Now, as for the crook–many senior elite levels allow members to “nominate” someone for an elite status and these nominations are starting to float around the Internet for purchase. Levels such as this are up for grabs from other travelers and do include the ability to avoid any fees for checked luggage; see www.insideflyer.com/link/?1316. United and US Airways, among others, are programs that allow members to nominate others. I’m not that wild about these nominations being sold, but I’m not the market maker.

And to everyone, let’s remember we’ve weathered storms before and even though 2008 may be remembered as one year we’d like to forget, as always, thanks for your business. And here’s to the best of holidays for you and yours.

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