It’s no surprise that United announced that it’s changing to a revenue-based frequent flyer program starting in March of 2015.
What is surprising, though, is how closely it mimics Delta SkyMiles’ proposed changes that go into effect in January 15. Jokes about it are flying around on social media sites (like the altered image above). Then there are tweets like the one from fellow travel columnist Joe Brancatelli, “Proof positive that everyone in United C-suite wears W.W.D.D. (What Would Delta Do) bracelets.”
How similar can they be? Well, just look at the helpful new mileage calculator that United posted on its website today, and compare it to the one Delta posted in February.
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Many of my readers may not want to hear me say this, but I think what United and Delta (and Virgin America, Southwest, JetBlue) did makes a lot of sense and will improve the loyalty experience for true frequent business travelers in coming years. There’s little doubt in my mind that once the dust around the American and US Airways merger settles, it will adopt similar, if not identical, policies.
It never made good business sense for airlines to base programs on miles flown instead of dollars spent. That’s because airline fares are not based on distance flown; they are driven by market forces. This is why it can cost three times as much to fly from, say Atlanta to Nashville (215 miles), than it does to fly from Atlanta to New York (750 miles). As painful as this announcement is, it makes business sense for airlines to better reward their customers who spend the most…not those who fly the farthest.
To me, the airlines made a mistake when they started distributing applications for “frequent flyer” programs to everyone—even those who fly once or twice a year. That diluted the loyalty experience for the airlines’ best customers…the ones who pay the most (not those who flew the farthest). It opened the door to a wily generation of “gamers” who figured out how to snag more miles at very low fares by manipulating an admittedly imperfect system. With new, similarly mimicked spending tiers attached to elite status, those gamers can still earn mountains of miles and travel “for free” but over time I’m betting they won’t get those upgrades, shorter lines and other bennies bestowed on those who spend a lot.
The move to revenue-based programs realigns the system back to its initial premise: to reward truly frequent business travelers, those who fly 10+ times per year on non-discounted fares. I’m talking about the guy or gal whose company pays $6,000 for a business class ticket to London, or a $550 last minute fare between Portland and San Francisco. If that’s not you, then sorry. If that is you, then get ready for things to get better. But it will take a while.
I’d love to hear your thoughts, feelings, comments and feedback about this massive change…. please leave them below!
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