My friend, DeltaPoints, predicts the “destruction of SkyMiles” coming January 1. I respectfully disagree. Bloggers, fellow travelers, and pundits that I like a lot, all say something will change….some crisis will happen…and the airlines will turn around too. They’re no doubt correct on the first two points, but I’m not sure mileage programs ever return to what they once were. I doubt we’ve seen the last bonus mile ever, but there’s no denying that airlines are being managed more like normal businesses.
We’ve become so accustomed to the old way of doing things in the airline business that many…too many believe it can’t change. The biggest evolution I see in the airlines is not really a factor of “reduced competition,” it’s the result of a different kind of management focus. The temptation to flood the market with new airframes, new flights, and the quest for market share have been replaced with expense control, capacity control, and something previously foreign in the airline industry, discipline. If something doesn’t pay for itself, it doesn’t get to stick around forever. A new paradigm? Maybe, but I’ll reserve judgement for a few more years and at least one recession before I pronounce the new way of doing business as permanent. However, I am hopeful.
This new focus is reaching into every area of the business, including loyalty programs. I wrote a little piece not too long ago implying that loyalty programs were never meant to be good for you. Obviously, as a program member, there must be something in the program that you feel is good for you….like “free” travel. But the real beneficiary of the program is (and always has been) its owner. All the things going on in the airline mileage space right now are about better aligning revenues and costs, just like their efforts in other parts of the business. Whether the airlines are pushing too far is a question that remains to be answered. With so many miles out there, and comparatively fewer seats available for redemption, it was only a matter of time before something gave. And I don’t believe for a second that the 2015 programs at Delta and United are the last stop in this process.
The airlines have moved on…..they’re doing what they believe is good for them. Maybe we should think about doing the same thing.
-MJ, October 11, 2014
[…] year I stated that the airlines had moved on and maybe we should too. Loyalty should be a two-way street, but it isn’t. Take the one-way loyalty program that […]
More appropriate might be American Dream: “This ain’t the same summer song that you used to know Cause Jack left Diane thirty years ago The world is spinning too fast for you and me So tell me whatever happened to the American dream?” http://genius.com/3160761/Mkto-american-dream/This-aint-the-same-summer-song-that-you-used-to-know-cause-jack-left-diane-thirty-years-ago That said, I worked to make Diamond on Delta this year, and I’m going to fly Delta the entire year and track how it works for me as an elite. I invested this year in SPG, Delta, and Amex for travel purposes. I have elite status and perks from all of them that carryover to both… Read more »
john, “a little diddly about Jack & Diane. Brought to you by John Mellencamp. Hope you make it out of the sky club.
Sitting in a skyclub on a Saturday night, the song that goes “Oh yeah life goes on…long after the thrill of livin’ is gone” seens appropriate. Cheers!
Safe travels, John.
agreed, full heartedly. You nailed it with saying that the future is already here, and change is just part of the business evolution. We may as well enjoy and live it up today and enjoy next phase as much as we can.
Thought provoking,
PedroNY
EJECT EJECT EJECT!
For some years I’ve played various games to generate points, and along the way tailored my efforts to programs with elite status. The net effect of this was sacrificing in some cases points opportunities. Opportunities here I could have used Chase Ink to rack up WAY more points, I was using Delta AmEx to get SkyPesos plus MQM.
Now I will only chase points. If I’m in coach on every single flight and a standard room in every hotel so be it.
And my point is that the mergers that were ostensibly to benefit consumers will primarily benefit airline management and to a lesser degree the shareholders.
Maybe I’m just jaded. 🙂 I suspect you and I never really thought those consumer benefits were the case.
The answer is a business with ridicuolously high wages, benefits and work rules that is suddenly thrustinto a competitive environment as the legacy carriers were in 1978.
Reasonable points, John. IMHO, we are late in the 4th quarter of a game that began in 1978. No one knows what the end game is, but it is going to be different than we’re used to.
I find the competition in the airline industry to be plentiful and very easy to access. Multiple airlines delivering sometimes the same, some very different products to get you from point A to B. Lots of choice and lots of freedom as a consumer to pick the company you feel gives you the best value. Just get on Kayak or your favorite travel website and look at the choices to your favorite destination. Generally speaking change freaks people out – but it is a constant in business and the airline industry. We have no choice but to get use to… Read more »
Managed like a normal business? You are not serious right? What normal business suceeds by continually raising prices (fees) and taking away benefits from its custoners? Not a business in a competitive industry. Airlines didn’t suddenly raise their business IQ, they have been given the gift of industry consolidation. They are making the most of it.
@John,
I could also ask what business consistently prices its product below the cost of delivering it? That’s the airline business most of us have known since 1978.