It is nearly a given in the world of loyalty programs that things can only get worse. Every change that a travel company or a retailer refers to as an enhancement, it seems, will actually mean that you earn fewer points, need more of them to earn rewards, or have less flexibility in redeeming them.
So let us pause to consider an unheralded effort at a few of the smaller airlines that helps customers earn free seats many times faster than they used to, and without charging them for the privilege.
Known variously as pooling or sharing, the programs allow customers of Hawaiian Airlines, Sun Country Airlines and JetBlue Airways to give their frequent flier miles to others or team up with a group to get a free ticket faster. Families, for instance, can combine all their miles so that a foursome can earn a single free ticket much more quickly. And children who might take five or 10 years to earn a free trip on their own through once-a-year flights can contribute to a joint account that helps the family save money sooner.
American, Delta, Southwest and United offer nothing of the sort for the moment. To figure out why — and if it might ever change — consider the details of the smaller carriers’ offerings.
Hawaiian Airlines’ ShareMiles program came first, in 2001. While participants can give as many miles as they want to anyone they would like, the recipient has to have a Hawaiian co-branded credit or debit card and be the primary cardholder.
In 2013, Sun Country started offering point pools. The airline, which has many scheduled flights between Minneapolis-St. Paul and warm-weather locations, allows up to 10 people to form a pool and contribute some or all of their points.
Larry Chestler, executive vice president for business development at the airline, has worked for bigger carriers and contrasted his operation with those at companies that fawn over frequent business travelers. “We are a very leisure-oriented airline,” he said. “Our intention in creating pooling was to recognize that a lot of leisure travel involves family, and sometimes it’s not very frequent. It’s acknowledging a different kind of loyalty.”
JetBlue, the biggest of the three carriers that favor free sharing, also does big business in warm-weather leisure markets. Its family pooling service allows up to two adults and five children to pool, though the airline said it might expand the number of adults at some point.
When JetBlue began allowing pools three years ago, it was also quite explicit in telling customers that they could define “family” however they wanted. Significant others, best friends — anyone was welcome. “We didn’t want to be prescriptive,” said Scott Resnick, the airline’s director of loyalty marketing. “Who are we to know? I can’t presume to know what your family looks like.”
Scheming parents may see the pools as a terrific way to confiscate their children’s miles, bring in relatives to babysit and fly off free on their own. Nothing wrong with that. The carriers report other common uses, too: grandparents and grandchildren teaming up, or parents using pooled points to fly college kids to school and back.
It all seems so nice, and as a JetBlue family pooler myself, I can confirm that there don’t seem to be any big catches as long as you stay on speaking terms with your “family” member. So what is the case for mile-hoarding selfishness among the bigger carriers?
Tim Winship, an American who worked in the travel industry before chronicling it, which he now does for smartertravel.com, believes there is a cultural element at work. Pooling miles, he noted, is more common among airlines based outside the United States. “We’re not as focused on the family unit and adding value to that status in the same way that countries in Europe and Asia seem to,” he said.
The no-free-sharing policy also relates to the balancing act that has long bedeviled loyalty marketing executives. On one hand, any company with a rewards program needs to give away enough freebies to keep customers coming back (and, in the airlines’ case, to make sure that the credit card companies keep forking over billions each year to buy miles to give out to their own customers who sign up for their co-branded cards). But the programs also need to make good financial sense, and no company wants to be any more generous than it absolutely has to be.
When people without a lot of miles give up on collecting or tracking them or trying to cash them in, it can be a highly profitable event for an airline. After all, if it sold some of those miles to a third party that then awarded them to its own customer, the airline would never have to redeem anything and would keep the payment for the miles even if that customer gave up on the loyalty program. Any pooling program has the potential to reduce the abandonment of loyalty points, since sharing makes them easier to redeem.
JetBlue and Sun Country, however, said they hadn’t seen much change in this “breakage,” as it’s known in the industry. This might be because only a small number of people are finding their way to the pooling programs, or they may be the sort of people who never would have abandoned their miles in any event.
Delta does allow elite members of its frequent flier program to share in other ways, by upgrading a travel companion when space is available and by letting top-tier customers grant a year’s worth of elite status to one person each year. And many airlines allow people to donate random lots of miles to charity or spend them on subscriptions. For just 3,200 American miles, you can get 304 issues of The Wall Street Journal, for instance. That’s $32 if you value each mile at a penny, a fraction of what the newspaper costs on its own website.
So there are plenty of easy ways to get at least a little value out of your miles and points and no need to throw up your hands and orphan them. But infrequent travelers who want the standard free trip will continue to have a tough time earning one just by flying the major airlines.
Or, perhaps, we could all take note of what is happening here and vote with our dollars. While JetBlue is removing an inch or two of legroom from its coach cabins, its seat-back screens and in-flight snacks do make the miles fly by a tad quicker. And when my family of four drops four figures on flights to Florida, pooling definitively tips the decision in JetBlue’s favor and away from Delta.
If enough other customers start making similar decisions, perhaps the major carriers will make it easier for us to be more generous with one another. Until then, please pass the purple potato chips.
This post was excerpted from nytimes.com. Full attribution and a link to this article follow directly.
Published by nytimes.com
August 19, 2016
Written by Ron Lieber – Your Money
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