Airlines have seen a lot of changes over the last several years. These changes include both frequent flyer programs and product changes. Some have been positive changes while others (such as the award changes and mileage earnings) have been negative for the majority of us. With these changes, and especially United’s change to their award rules (see this post for a great overview of the negativity of it – and a possible workout), it goes to show us even more who the airlines’ favorite customers really are.
The Airlines’ Favorite Customers Are…
Airlines’ Favorite Customers? – Not Us (the “gamers“)!
Courtesy of Shutterstock
First of all, it should go without saying that airlines’ favorite customers are not the majority of people who read the blogs. They would classify us as “gamers” – customers who work within the rules provided to derive the maximum value from our miles. Hey, that is just being a smart, well-informed customer! In fact, it makes many of us more informed about their own rules than their own reps are! 🙂
But when the airlines went to a revenue-based system, many people were saying that the airlines were simply rewarding their favorite customers – the big spenders. After all, those were the people that were paying for our cheap seats on the airplanes with their last-minute tickets or fully-refundable tickets (those tickets can cost $2,000 on some domestic routes when our tickets might cost $200).
Airlines’ Favorite Customers? – Not Big Spenders
The big-spender is not necessarily the airline’s favorite customer | Courtesy of Shutterstock
It is a fair argument to make that the big-spenders are the airlines’ favorite customers yet they still put caps on the earnings within the new systems for tickets purchased. But, I do not believe that even these big paying customers are the airlines’ favorites. Why?
Award Changes Affect All
One of the reasons is that the award changes (routing rules and price increases) affect the big payers as well as the gamers. Not only that, but the award increases really are making the extra miles awarded to the big payers closer to the way things were just a few years ago.
Watered-down Upgrades
Another example that the US airlines are not rewarding the big payers like they would be if they were the favorite customers is how the US airlines have been handling upgrades. I have been hearing more and more lately about top-tier elite flyers who are missing upgrades – upgrades that were easy just a couple of years ago.
But, the airlines have begun to monetize their business/first class cabins more, especially as they work to make improvements in the products and services. These monetization methods can be seen with upgrade offers to customers upon check-in – some at a pretty low price! Airlines have chosen to do this instead of rewarding some of their big customers with constant upgrades.
Lack of Meaningful Award Space
A random AA search for business class to Europe – no awards
Even with the increase in award costs, award space still tends to be pretty sparse on domestic airlines for many routes. American Airlines is likely the biggest offender – just try to find award space on their own flights in premium cabins around the world. It is so difficult to find that when award space is opened up, it becomes big blog news. Again, if the US airlines wanted to reward their big paying customers, they could do it with extra award space. United offers that to elite customers – but also to credit cardholders.
US Airlines’ Favorite Customer – The Uninformed, Casual Traveler!
So, who do I think the US airlines’ favorite customers are? I think they have shown pretty clearly that it is the uninformed, casual flyer. There are many reasons that I think this is demonstrated.
Award Chart Removal & Changes
One is the removal of award charts (Delta) and the elimination of creative routing strategies on award travel (United) – all in the name of making things more simple for the customer. They hide behind these changes with the argument that it is what their customers are asking for. What customers? Certainly not the “gamers” and likely not the big spenders either.
Blogs like this one have collectively served to educate millions of people over the last several years and there are more people today that understand how to extract maximum value from their airline miles than ever so the old award systems would have been more easy now for customers than ever. Yet, the airlines want to keep the costs down and take more miles in.
Lower Fees for Non-Elites
The new United award fees
With United’s recent award change also came a lower fee structure for non-elites. This is great for people without status on United but does not help the elite customers. Here are examples from the new fee structure:
Before October 6, the timeframe for change fee increases was around the 21 days before the flight. Now, it is 60 days. This mostly affects the travelers who try to take advantage of better award space nearer to departure and also those that value their miles to last-minute tickets. Most casual travelers book travel much further out.
The fee structure has been changed to combine the fees as one for changes and redeposits. I know for me, I highly value the ability to change award tickets at minimal cost since I am used to the ease of that with miles. More casual travelers would likely not make changes unless it was an emergency (certainly not if it was something like an equipment change!).
Platinum elites now have to pay fees to change and redeposit – they never did before. Not only that, but other elites are affected as well. The non-elite customer? If they cancel, it now only costs $75 if they do it more than 61 days from the flight. Before October 6, it would have cost $200! The big winner with this change is definitely the non-elite (which is what the casual traveler would be).
Credit Card Offers
Airlines push the lower credit card offers to casual customers
Finally, look at credit card offers for airlines. The “gamers” know what the issuers’ rules are for various cards and what the best offers are. But, if you walk through US airports, you will find the kiosks all over advertising airline credit cards at the 30,000 mile level as if it gives you some kind of incredible redemption possibility.
Yes, you can use it as a one-way to Europe in coach or a roundtrip in the US but the bonus by itself will not give you anything extra. Yet the airlines treat these offers as if they are great gifts for the travelers. If you doubt this, travel through a US airport near Christmas or Thanksgiving and just look around!
Summary
We know that the airlines get great value out of customers that use their co-branded credit cards and out of their big spenders. Yet, they shower their “kindnesses” more on the uninformed and casual travelers. But, that is ok because the casual traveler is one that does not have any loyalty to an airline or an airline credit card. They will ultimately go for the airline that offers them the best price. Airlines will have to be continue to be competitive to get that customer and that competition will eventually come back around to reward the gamers as well.
Thank you for a well-reasoned and thought through article. The truth is stunning, isn’t it? I am a regular traveler. When I think about what the airlines have done to make flying and arranging for flying such a pain, and make the rules so incredibly non-understandable for even the seasoned traveler, I wonder how much of the flying public flies less as a result thereof.
No. The airlines love their big spending customers…but you just don’t want to accept that or the realities of less competition in the marketplace. The airlines don’t need to upgrade people or provide as generous perks with fewer major airlines competing with them. That has nothing to do with customers and everything to do with the fact that fewer airlines makes the airlines remaining fatter and happier and more profitable.
In this new world, the biggest spenders are the winners…and the customers the airlines reward the most. If you spend more, you get mostly what you want…and get treated better than everyone else. Period. If you spend more, you don’t need award tickets. If you spend more, you don’t need upgrades. If you spend more, you deserve the better service that the airline can provide when it serves its purpose.
Period.
Good points but it still stands that the rewards given to big spenders are not equal to the loyalty those spenders exhibit. Yes, they get a better seat and better service – but their money (especially on the international routes where US airlines are rolling out these products) can buy tickets on international airlines that do everything much better than the US airlines. The part that would lure those customers and their loyalty for that kind of spend would be better award services or better options than what the gamers can get at the same time. For that matter, what basic credit card members can get. Remember, many times these big spenders are not actually the ones flying. The big spenders are corporations and the employees are doing the flying so the rewards are very important, especially if the one flying has a choice when it comes to airlines.
Thank you for documenting what I have been experiencing. I’ve been Exec Plat for 7 years and already requalified for 2017. Yet I feel less love than I did a few years ago for reasons you’ve listed. This is sad as I expect to travel as much for at least the next few years. I hear the same from loyal fliers of other carriers. Maybe I should show less loyalty to one carrier and go with best fare.