Major airlines on Jan. 1 once again will tweak frequent flyer programs by providing incentives to purchase more expensive tickets, thereby rewarding loyal customers based on their value rather than the number of miles they actually fly. Specifically, Alaska Airlines will give upgrade priority to higher-paying passengers, Continental Airlines will differentiate further elite status qualification based on fare paid and Delta Air Lines will implement a complex upgrade matrix based on elite level and fare paid. United Airlines, meanwhile, quietly rolled out a new perks program for top-tier frequent flyers.
These changes are the latest in a years-long trend toward dollars-for-benefits that not only encourages higher ticket price purchases but, in many cases, concurrently penalizes passengers on discounted tickets and frustrates corporate travel managers.
"The airlines are targeting corporate customers to spend more money," said Yasuo Sonoda, travel manager at Macromedia in San Francisco. "Any time I see announcements like this, I let the airlines know that I am not happy." Other travel managers said they do not object to frequent flyer programs tying rewards to dollars spent, but criticized carriers for disallowing expenditures on certain fare types. "Airlines are convincing—some would say forcing—travelers to buy higher fares for the perception of a higher reward," added Joe Brancatelli, Internet columnist and editor of JoeSentMe.com. "Frequent flyer programs first were about loyalty, then about travel marketing and now it's about revenue management."
At Continental—which, like many other airlines, already ties base mileage and elite mileage accrual to fare paid—the OnePass loyalty program next year also will link elite segment accrual to fare type. For example, travelers on Q, S, T and L fares—the lowest buckets—won't receive any segment points toward elite status qualification and only half of the elite status qualification miles normally provided. Travelers using higher-price fares, ranging from full Y economy up through premium fare buckets, will receive two elite status qualification segment points. All other fare types—H, K, B and V—will garner one elite status qualification segment point.
There is a twist. Continental will continue rewarding passengers on Q, S, T and L fares with 100 percent elite status mileage and a segment point toward elite status provided they book their travel on the airline's Web site.
Many carriers offer more frequent flyer awards for those booking through airline-operated Web sites. ATA Airlines, for example, does not provide frequent flyer credit for bookings that don't go through ATA.com. "Should we extend it to reservations made through Expedia, Travelocity, etc.?" asked CEO George Mikelsons. "By having resisted that so far, we are driving a humongous amount of bookings to ATA.com." Though the logic is simple—Web site bookings are cheaper to process so carriers push travelers to that channel—Brancatelli, for one, opposes airline efforts to "discipline" their loyal customers.
Continental, meanwhile, also raised certain upgrade requirements for travelers flying on select economy fares, including an additional $200 nonrefundable service fee for upgrade-seeking, K fare passengers. The OnePass changes quietly were announced a day after Continental CEO Gordon Bethune publicly unveiled a package of perks available to premium passengers, elite-level frequent flyers and passengers on full Y economy fares
(BTN, Sept. 22).Delta's latest changes primarily impact upgrade rewards, but vary based on the traveler's elite status level and fare paid. According to Delta's Web site, the changes target an equilibrium in the supply and demand of upgrades and "ultimately raises the value you place on an upgrade." As such, Delta is, among other things, reducing upgrade supply by "slowing the rate at which you can earn upgrades."
The plan "is so convoluted that only an airline could come up with this," Brancatelli said. "Delta is saying, in effect, 'On the face, we accept that paying full fare is absurd.' "
Effective Jan. 1, Alaska's top-level frequent flyers who purchase "higher fares" will be given automatic, space-available upgrades to the first class cabin at the time of booking. Elite-level travelers on discounted fares won't have upgrade eligibility until three days prior to departure. Other changes to be implemented by Alaska at the beginning of the year include a higher one-way upgrade redemption level, 10,000 miles from 5,000, and a higher redemption level for first class reward tickets, 60,000 miles to 80,000. Qualifying levels for elite status also will be increased.
Meanwhile, United Airlines in July quietly unveiled Ameniti, a preferred traveler program currently open only to a select group of the carrier's "most valued Mileage Plus business travelers." Despite the demographic of the target group, the program includes companion tickets, cruise specials and other leisure-oriented enticements while excluding corporate discounts from promotions. Members through year-end receive complimentary tickets when booking full fare business or first class tickets for international travel or full fare first, business or economy class tickets in the domestic system. The program has garnered "a high level of response and participation," according to a carrier spokesperson who would not provide specifics. United said the Ameniti Luxury Travel Club officially will launch this fall and will be open to any customer for a $295 annual fee.