People Get Ready, There’s a Change a Comin’ …

I’m telling you something is coming, and while I may have figured out some of it, I don’t know all of it. And that bothers me. Last month, I attended the US Airways Media Day, which I can say is the best in the industry for access to airline executives and a wonderful tribute to an airline that continues to move the ball forward. No, I’m not writing about the possible American Airlines / US Airways merger, but rather about a very unpredicted moment at that Media Day.

At the end of the event, the various executives face any number of the media, and for accuracy sake, I’ll state that the real media were present–those who I respect and applaud for their professional skills as writers and researchers. Me? I remain a one-trick pony with the skills of a talking head when compared to those who represent The Wall Street Journal, USA Today, etc. Anyway, there were about 30 questions asked of these executives lined up on stools like a shooting gallery. Again, applause for US Airways because as far as I could tell, each executive when asked a question was mostly speaking off-script, and even Doug Parker (who I personally think is one of the leading airline executives these days) was loquacious when asked about the possibility and strategy of a merger with American Airlines.

So, each and every question of the 30 was answered by any number of the executives … except for one. While many of the attending media will once in a while write something about the world of frequent flyer programs, they tend to let it lie aside to the likes of Mr. Talking Head–me. So, I raise my hand and with purpose, ask my single question: “Given the changes in the industry to the concept of revenue-based frequent flyer programs, et al., the change at Southwest Airlines, and the fact that US Airways’ acquisition America West actually invented the world’s first revenue-based frequent flyer program many years ago known as FlightFund–where is US Airways on thinking about this topic?” The reply: “No comment.”

No comment? After everyone answered in some way every question asked by dozens of other media? And the “no comment” did not come with any small chat. The reply was immediate and was put forward so strongly that there was little question I’d have a chance to charm an answer. Why would the executives of US Airways issue an immediate reply such as that? They could have easily danced around it a little and said something like “Yes, we do watch things like this among our competitors such as Southwest, but really haven’t formed any exact thoughts or plans at this time, next question please.” Heck, I would have accepted that. But the immediate and firm “no comment”? While I don’t know anything about Area 54 (the supposed top-secret area popular with UFO conspiracy theorists), I’m pretty sure that something is going on out there. You combine that with rumors coming from the greater ATL area and I’m telling you–people get ready. Are both US Airways and Delta considering changes to their existing frequent flyer programs featuring a conversion to revenue-based programs? With the changes that have already impacted this industry (miles as an industry?), there’s a very strong argument that this is the way of the future.

What also intrigues me is recently at the Travel Executive Summit which I hosted as part of the Freddie Awards, I asked a number of hotel executives about their programs, because while they are all partially revenue-based on accrual, they don’t have the same revenue-based redemption that Southwest Rapid Rewards now features. All said that they didn’t see that as part of their own sector. I’m not saying I disagree, but it can’t be that great a program to constantly change the levels of hotels participating in various “categories”. Seems to me that by floating the award chart to be based on revenue it might alleviate the seemingly annual angst that many frequent travelers currently go through when hotel award categories change.

Understand that I’m not analyzing these possible changes as good or bad since until a major legacy carrier changes to a revenue-based program (Southwest Rapid Rewards changed from a currency that did not have as much outstanding liability as a legacy frequent flyer program would have: 16 credits per award vs. a minimum of 25,000 individual miles), a full analysis can’t be made without knowing an exact exchange rate.

So, listen to me … There’s a Change a Comin’ …