It occurs to me that if you don’t read what I have to say regularly, you might conclude that I’m a little giddy over the idea of “revenue based” mileage programs. The truth is that I’m mostly indifferent to the idea, but happen to think that the way airlines market and price flights now make spend a better way to measure customer value than distance flown. That’s about it. My friend DeltaPoints and I were going “round and round” about this via Google Chat last night, and about halfway through the conversation it occurred to me that he thinks that I believe that no one is going to leave Delta because of SkyMiles 2015. In fact, nothing could be further from the truth. I expect that Delta has already lost some customers, and they’ll probably lose some more next year. However, when some customers walk, usually, a few more line up behind them.
I don’t know what I thought United would ultimately do, but I suppose it isn’t that surprising that they basically rolled with Delta’s idea of a revenue based MileagePlus. Honestly, I feel a little sorry for United sometimes. From this ex-airline guy’s perspective, with some pruning and hedging, they should have the finest route network in the industry, and should be the most profitable. Instead, they are what they are. In the end, they copied Delta, and now we have two of the big three with basically the same loyalty structure come next year.
The outlier in this is, of course, American AAdvantage. I’ve posted on this enough for most to know that I think AAdvantage could follow a different path towards better rewarding spend, but just because they could, does not mean they will. My sense is that US Airways had a revenue based program ready to go, and then they were presented with an opportunity in the Chapter 11 filing of American Airlines. Having bigger fish to fry, like putting together two large airlines, could prove to be a feather in American’s cap when it comes to rewarding loyalty. In other words, they have time to see what happens with Delta and United. While I think change is coming to AAdvantage, it could be different than a carbon copy of the Delta and United programs. Focusing on other things while monitoring what happens in 2015 might allow them them opportunity to do something better. Or it may prove that Delta was right all along.
But the what ifs taunt me a little. What if AAdvantage doesn’t change much at all. Perhaps a revenue requirement for elite status here, an award chart adjustment there. In a system with 85 percent load factors, meaning your most popular flights are actually close to full, is there room for that much market share shift anymore? Just pondering things on a Friday night.
-MJ, June 20, 2014