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Frequent flyer programmes need an upgrade

Air miles: airlines should be more transparent with their frequent flyer programmes, Carla Seely argues (Image by Kornienko Alexandr/Adobe)

I don’t know about you, but I am becoming increasingly annoyed with the constant changes in frequent flyer programmes, and I have really started to wonder whether they offer any true perks.

I can’t count the number of times I have checked my British Airways Avios or American Airlines AAdvantage miles to see whether I can book a ticket, only to discover there is no availability or that it is triple the number of points to redeem.

Seriously, what’s the point (pardon the pun) of paying annual fees for an airline-associated credit card, or even signing up for the programme, when it seems you can rarely use them?

Let’s face it, frequent flyer programmes have become a staple of the airline industry, designed to reward loyal customers with a variety of benefits, including free flights, upgrades, priority seating or lounge access.

Frequent flyer programmes were initially designed as a tool to foster customer loyalty and increase brand affinity. These programmes have grown substantially over the past 20 years, becoming complex and layered systems that are difficult to understand and nearly impossible to navigate.

As a result, many once-loyal passengers are now exploring their options within the industry due to rising travel costs, constant changes in frequent flyer programmes and new airlines entering the market.

Here are some of the biggest issues with frequent flyer programmes:

1, Complexity and lack of transparency

One of the primary issues with frequent flyer programmes is their complexity. Each airline has its own unique system, with different earning rates, redemption options and membership tiers.

For the average traveller, navigating through the intricacies of these programmes can be extremely confusing. The earning and redemption processes often involve rules and restrictions that are not clearly communicated, leaving many consumers feeling frustrated.

And then there are the frequent changes to the terms of their programmes – whether through the devaluation of miles, changes in tier qualification requirements or modification of redemption options.

This lack of transparency can create distrust among consumers, who may feel that they are being lured into a system that is not designed with their best interests in mind.

2, Devaluation of points and miles

A significant concern for frequent flyers is the devaluation of points or miles, which has become a trend among many airlines. Over the years, airlines have gradually reduced the value of their loyalty currencies, often by introducing requirements like a minimum number of flights per year and tier status credits that must be collected in addition to standard miles or points.

Additionally, what once might have been enough for a round-trip ticket now barely covers a one-way trip, especially on popular routes. This devaluation often occurs without adequate warning or justification, leaving loyal customers feeling cheated.

Many airlines also use dynamic pricing models that adjust the number of points needed for a flight based on demand and other factors. This can make it exceedingly difficult for loyalty programme members to accurately forecast how many points they will need for travel, undermining the primary incentive of the programme.

3, Complicated redemption processes

While accumulating points is usually straightforward, redeeming them is often a cumbersome and exasperating experience. Many frequent flyer programmes have blackout dates during peak travel seasons, limiting availability for redeemable flights.

Additionally, award seats may be scarce, and finding a flight that allows for the use of points can become a daunting task.

The inconvenience of redeeming points can extend beyond the airline itself. Many travellers find that loyalty programme partners, such as hotels and rental car companies, also impose restrictions that limit the potential benefits of memberships.

This maze of restrictions often leads to dissatisfaction among users who feel that their hard-earned rewards are difficult to redeem when they’re ready to use them.

4, Differentiation in tier levels

Another issue with frequent flyer programmes is the increased differentiation in tier levels. While the aim is to reward the most loyal customers, this system can create a stark disparity between casual travellers and frequent flyers.

Those who fly often may attain elite status privileges, such as priority boarding, free checked bags and access to lounges, while occasional travellers receive minimal benefits.

This creates a two-tier system that can alienate less frequent flyers, who may feel their loyalty is not recognised or valued by airlines. Rather than creating a sense of belonging for all customers, this approach can drive a wedge between different segments of the consumer base, harming overall brand loyalty.

5, Consumer behaviour and the loyalty trap

Frequent flyer programmes may also contribute to an unhealthy loyalty trap for consumers. Travellers often find themselves compelled to book flights with a specific airline to maximise their points, even when other airlines offer better fares, schedules or services. This can lead to a form of consumer irrationality, where the promise of points distorts economic decision-making.

This loyalty trap can perpetuate existing biases in the travel industry, where frequent flyers are prioritised over other customers. This can result in disparities in service levels and customer experience, further alienating the broader customer base.

The reality is that frequent flyer programmes, while designed to reward and engage customers, are facing myriad challenges that undermine the entire concept. Spending 190,000 Avios points and $800 for a round-trip ticket to Europe from Bermuda seems ridiculous to begin with, but it becomes even more frustrating when it turns out the only available flight has a highly inconvenient Wednesday departure – who wants to travel midweek as opposed to the weekend? Seriously, how is that rewarding a frequent flyer?

As the travel landscape continues to evolve, I believe airlines must focus on customer-focused innovations in their loyalty offerings, creating value that benefits both the airline and its customers.

Carla Seely has 24 years of experience in the financial services, wealth management and insurance industries. Over the course of her career, she has obtained several investment licences through the Canadian Securities Institute. She holds ACSI certification through the Chartered Institute for Securities and Investments, UK; QAFP through FP Canada; and AINS through the Institutes. She also has a master’s degree in business and management

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Published November 09, 2024 at 8:00 am (Updated November 12, 2024 at 8:48 am)

Frequent flyer programmes need an upgrade

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