Randy Petersen's Opening Remarks – August, 26 2009

Randy Petersen's Opening Remarks – August, 26 2009

Where do I begin? The whole world is starting to go soft on frequent flyer programs. Even the hot-aired critics have softened their stance citing positive changes by American, United, Delta and even US Airways. And there are even positive reports that awards are available. What is this world coming to? Either the airlines have worn us all down or we’ve been down so long it looks like up to us. We always welcome positive improvements to these programs and given the continuing award sales, more of us have had opportunities to travel (despite the economy) than ever before.

Furthermore, there have been some interesting moves by some programs that provide a glimpse into our frequent flyer future. First, if you didn’t catch the news of the three new credit cards that Chase is offering members of United’s Mileage Plus program, I think you should. United’s “Club Card” is an excellent parry to the existing Continental Presidential Plus MasterCard featuring President’s Club membership and the Delta Reserve American Express card, also featuring airport lounge privileges. With Delta ending their participation in the Priority Pass airport lounge program effective September 1 it makes me wonder if other airlines, sensing their own ability to resell airport lounge access in other ways, will follow Delta in withdrawing from that program? I sincerely hope not and count myself among the many who see the Priority Pass program as a valuable service for the traveler.

Who would have guessed that when Continental introduced their “club card” in November 2006, that they would eventually be viewed as a trendsetter for that particular product? Now all that remains is for someone to get on the BatPhone to Barclays Bank and suggest to them that the US Airways Club needs their own benefit-driven credit card and another call should be placed to Citi to suggest the same for an Admiral’s Club tie-in with American Airlines’ credit cards.

US Airways offers some interesting benefits in their new World MasterCard (5,000-mile award discount), so they should get busy. BTW, if you are wondering why I should care? Simple, credit card tie-ins like this seem to be bringing down the average cost of getting an airport club membership–if you can handle another credit card in your wallet.

But the real story of the three new credit cards from Chase is that all three of them include opportunities to earn bonus EQMs from your credit card spend. Now, we’ve seen that before so it’s not new, and it seems to be growing. Now hold that thought as we move to the following paragraph.

Among recent news was a unique twist for elite-level qualification. Delta, sensing a need to get ahead of the curve for members in the soon-to-be-fully-merged frequent flyer program with Northwest WorldPerks, might have shocked their competitors by announcing an elite benefit that in effect, rolls over EQMs from year to year. While Delta trumps being the first airline to allow members such a privilege, I need to set the record straight for our readers. Actually, US Airways several years ago offered this benefit to members of their Chairman’s Preferred level and opted to end the benefit during their merger with America West. With that out of the way, it’s clear that the idea of rollover miles and points is poised to become the new “must have” benefit for any loyalty program, somewhat copying or trading on the popularity of the practice in the cell phone business–love those rollover minutes commercials from AT&T.

While we think this is a unique twist and does support the decision by Marriott Rewards to offer something similar to their elite members (announced a few short months ago), a wide adoption of this policy, combined with the growing trend of EQMs from credit card spend as noted above, will likely lead to a column from me in about two years time bemoaning the filtering of other benefits we take for granted today. Think that the move by US Airways last year to remove bonus miles from their elite level benefits was a lark? Sorry, it was a real glimpse into the future. While we championed the effort causing US Airways to reconsider that decision, in light of today’s competitive elite-level programs, next time it will be a different frequent flyer program, and others will match it. The price of progress can be expensive over time so enjoy it while you can.

Leave a Reply

Your email address will not be published. Required fields are marked *