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