{"id":5203,"date":"2024-12-12T16:33:35","date_gmt":"2024-12-12T16:33:35","guid":{"rendered":"https:\/\/alfanouscar.com\/blog\/?p=5203"},"modified":"2024-12-12T16:33:35","modified_gmt":"2024-12-12T16:33:35","slug":"rephrase-the-same-backlash-against-airlines-most-valuable-asset-in-a-different-way-no-more-than-118-characters-as-if-you-were-a-native-american-speaker-as-expert-on-content-creation-and-don","status":"publish","type":"post","link":"https:\/\/alfanouscar.com\/blog\/rephrase-the-same-backlash-against-airlines-most-valuable-asset-in-a-different-way-no-more-than-118-characters-as-if-you-were-a-native-american-speaker-as-expert-on-content-creation-and-don\/","title":{"rendered":"Rephrase the same Backlash Against Airlines\u2019 Most Valuable Asset in a different way no more than 118 characters, as if you were a native American speaker as expert on content creation and dont talk about yourself or your experience"},"content":{"rendered":"
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Loyalty is big business for airlines. In 2023, American Airlines raked in around $6.5 billion from AAdvantage alone \u2014 that included revenue earned from mileage redemptions with credit cards and marketing the program. Delta Air Lines reported deferred revenues of $8.4 billion from its SkyMiles program, and United Airlines had about $7.1 billion in deferred revenue from MileagePlus.\u00a0<\/p>\n

Besides revenue from tickets \u2014 actually flying people places \u2014 loyalty programs are one of the most significant revenue streams for an airline. These programs are so critical that some executives refer to them as a \u201cnorth star.\u201d United calls MileagePlus its \u201ccrown jewel.\u201d At American\u2019s investor day in March, CEO Robert Isom said around 65% of its revenue was driven by AAdvantage members.\u00a0<\/p>\n

<\/figure>\n

But now these cash cows have been under attack from all corners.\u00a0<\/p>\n

As airlines raise spending requirements to earn status, some passengers have begun to question if these programs are worth it.\u00a0<\/p>\n

\u201cFor a person who is interested in this, who enjoys the game, it can be a good deal,\u201d said Ben Edelman, a frequent flyer based in Seattle who tracks consumer complaints in the airline industry and recently filed one with the Department of Transportation. \u201cBut for regular people, my own sense is it\u2019s kind of stopped being a good deal.\u201d<\/p>\n

Edelman has noticed that it\u2019s become more difficult to get redemptions for business class flights, and that for most people, loyalty programs require too much spending to reach status.\u00a0<\/p>\n

\u201cThe fundamental deal, how much you have to spend, how many flights you have to take to get how much benefit, that deal really isn\u2019t being honored anymore,\u201d Edelman said. \u201cAnd a lot of people are kind of frustrated.\u201d<\/p>\n

The federal government had also been circling prior to the recent U.S. election. The DOT, the Justice Department and the Consumer Financial Protection Bureau all have inquiries into the loyalty programs for the four largest airlines. There are also two bills in Congress that seek to put more regulations on credit cards and points and miles.\u00a0<\/p>\n

Recently, the Senate declined<\/a> to put the Credit Card Competition Act to a vote, with some senators believing that the bill would not pass Congress.\u00a0<\/p>\n

It\u2019s likely that these initiatives will die down once President-elect Donald Trump takes office in January. The discontent among travelers will remain.\u00a0<\/p>\n

A Frustrating Experience<\/h2>\n

Edelman tried to use his AAdvantage miles to book business class flights from Washington, D.C. to Sydney for three relatives. He managed to find three award flights valued at 140,000 miles, plus taxes and fees of $112.20 per person.\u00a0<\/p>\n

However, American said those award flights would be delayed for three hours and then three hours became 27 hours. Eventually, Edelman\u2019s relatives were downgraded from business class to economy.\u00a0<\/p>\n

\u201cThey say, \u2018Wait, that\u2019s not what we signed on for,\u2019\u201d Edelman said.<\/p>\n

In his complaint with the DOT, Edelman, who has held Executive Platinum status with AAdvantage, cited inconsistent communication from American about the delay and availability of alternative award flights. Edelman said American \u201cimposed a variety of restrictions\u201d on alternative bookings.\u00a0<\/p>\n

\u201cAs a passenger redeeming frequent flyer miles, my relatives were redeeming my miles for business class,\u201d he told Skift. \u201cYou\u2019re kind of stuck with whatever the airline gives you. If they tell you you have to wait 25 hours or downgrade to coach, you kind of have to do that.\u201d<\/p>\n

Scores of travelers have taken to platforms like Reddit and Facebook to complain about these programs and have questioned if it\u2019s worth pursuing status.\u00a0<\/p>\n

Some airlines are also betting they\u2019ll see greater returns on tickets bought with cash rather than miles or upgrades, given the strong appetite for premium seating. During its investor day in November, Delta president Glen Hauenstein said the carrier\u2019s first class cabin was once one of its \u201cbiggest loss leaders\u201d because it was mostly available through upgrades.<\/p>\n

Over 15 years ago, only around 12% of Delta\u2019s first class seats were paid for \u2014 the rest of the cabin was filled by upgrades. Now, that number has flipped. First-class upgrades make up around 12% of Delta\u2019s front cabin, and the rest of those seats are fully paid for.\u00a0<\/p>\n

Yet for all the scrutiny these programs have received from customers and Washington, they\u2019re doing better than ever. Each quarter, the four biggest airlines have continued to report record revenues from their frequent flyer programs.\u00a0<\/p>\n

Inside the Loyalty Ecosystem<\/h2>\n

The first-ever loyalty program can be traced all the way back to the 18th century, when a merchant in Sudbury, New Hampshire offered customers tokens that could be redeemed for merchandise, according to a New York Times article<\/a> from 1971.\u00a0<\/p>\n

But the concept of loyalty has become closely associated with the airline industry. Texas International Airlines \u2014\u00a0which soon merged with Continental Airlines \u2014 rolled out the first mileage-based frequent flyer program in 1979, according to The Points Guy<\/a>.\u00a0<\/p>\n

Then, in 1981, American launched AAdvantage, and soon enough, United Airlines and Delta Air Lines followed suit.\u00a0\u00a0<\/p>\n

Airlines may not be known to make much money, but their loyalty programs do. As carriers forge deals with credit card companies, they\u2019ve been able to rake in even more revenue from the programs.\u00a0<\/p>\n

United MileagePlus has been valued at $22 billion, and AAdvantage is worth around $24 billion, according to the Harvard Business Review<\/a>. Delta received $1.8 billion in the third quarter from its partnership with American Express, which includes a co-branded credit card that allows customers to earn miles without spending on airfare.\u00a0<\/p>\n

These programs have spawned a subculture of people obsessed with earning miles \u2014\u00a0ranging from business travelers to hobbyists. They have developed such a cult following that some points and miles pros book \u201cmileage runs\u201d for the sake of earning the next tier of status and sign up for all the right credit cards.\u00a0<\/p>\n

But as the programs have grown over the decades, airlines have made adjustments to their models. One of the biggest trends in the loyalty space has been the shift from mileage-based points to a spend-based model.\u00a0<\/p>\n

That spend-based model became a source of frustration in September 2023, when Delta released controversial changes to its SkyMiles program that made it much harder to earn status.<\/p>\n

Experts say the shift to reward miles based on spending makes sense, when considering that airlines know how much revenue they are generating from each customer.\u00a0<\/p>\n

Jay Sorensen, an analyst at consulting company IdeaWorks, said in the 80s and 90s a mileage-based model worked because airlines didn\u2019t necessarily know how much travelers spent on airfare since travel agents sold the majority of tickets.\u00a0<\/p>\n

\u201cWe didn\u2019t know how much you paid,\u201d Sorensen said. \u201cAnd so miles were a sensible measurement. But as time progressed, the technological issue went away where airlines now know what revenue was produced by a customer immediately.\u201d\u00a0<\/p>\n

Washington Examines Airline Consumer Practices<\/h2>\n

In September, the DOT officially launched an inquiry into the four largest U.S. loyalty programs \u2014 Delta SkyMiles, AAdvantage, United MileagePlus and Southwest Rapid Rewards.\u00a0\u00a0<\/p>\n

\u201cOur goal with this inquiry is to ensure that customer rewards are protected from any practices that would diminish their value, benefit, or availability,\u201d Transportation Secretary Pete Buttigieg wrote in a letter dated September 5 to the four major U.S. carriers.<\/p>\n

CFPB director Rohit Chopra said in May that the agency had found initial evidence of airlines and credit card companies devaluing miles. He said that airlines and credit card companies can \u201cquickly and dramatically\u201d devalue points by making them more difficult to redeem or limiting what items can be purchased with points.\u00a0<\/p>\n

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Devaluation of points and miles is routine in the industry. John Grant, a chief analyst at data firm OAG, said airlines tend to devalue miles as a way to remove some of the liabilities off their balance sheet.<\/p>\n

\u201cIt\u2019s a fine art,\u201d Grant said. \u201cYou want people to travel and spend and then obviously the airline rewards them with points, but they don\u2019t want all of those points to just sit there and then suddenly everyone calls on them in one month or one week.\u201d\u00a0<\/p>\n

There has also been concern that loyalty programs have become so big that they crush competition, especially as American, Delta, United and Southwest dominate around 80% of the U.S. market.\u00a0<\/p>\n

In October, just weeks before the 2024 presidential election, the DOJ announced it was launching a \u201cbroad public inquiry\u201d into the state of competition in air travel, and loyalty programs were also a part of that inquiry. In a 14-page questionnaire, the DOJ asked airlines how loyalty programs impact the ability of new carriers to enter the industry, if they create a monopoly, and how consolidation has impacted these programs.\u00a0<\/p>\n

Matt Klein, Spirit\u2019s chief commercial officer, told the CFPB and DOT in May that loyalty programs were part of a \u201cthree-legged stool\u201d that the four largest carriers use to hamper further competition.\u00a0<\/p>\n

\u201cThe larger airlines here in America now make it extremely difficult for low-fare airlines like Spirit to enter new markets, sustain long-term success when competing to and from the largest airports in this country, and provide better value to customers seeking alternative or lower cost options,\u201d Klein said.\u00a0<\/p>\n

Airlines for America, the trade group that represents most major U.S. carriers, has said it believes there is robust competition among carriers, especially with loyalty programs.\u00a0<\/p>\n

\u201cBecause there is fierce competition among airlines for customers, loyalty programs are a way carriers can say \u2018thank you\u2019 to travelers,\u201d A4A said in a statement to Skift. \u201cMillions of people enjoy being a part of various loyalty programs, which allow them to accumulate rewards to apply toward travel or other benefits.\u201d<\/p>\n

\u2018It\u2019s Just Math\u2019<\/h2>\n

For airlines, there\u2019s a rationale to the changes.\u00a0<\/p>\n

Luc Bondar, the chief operating officer of United MileagePlus, told Skift that a major reason why United changes the status requirements for MileagePlus is partly to ensure the program can provide a consistent level of service to those with elite status.\u00a0<\/p>\n

\u201cIt\u2019s on us to make sure that value is consistent,\u201d Bondar said. \u201cAnd by consistent, I don\u2019t mean always the same, but I mean that the customer has a strong sense that the investment of time and effort and money that they make with a brand like United they\u2019re going to see come back to them through their relationship with MileagePlus.\u201d<\/p>\n

Bondar said if the higher status levels have too many members, it becomes more difficult for United to deliver on the perks it promises.\u00a0<\/p>\n

\u201cIf the premier program grows too large and we have capacity\u2013constrained benefits like upgrades and priority boarding and elevated levels of service, then we end up with an imbalance,\u201d Bondar said. \u201cIt makes it harder for us to deliver a great experience to the customer.\u201d<\/p>\n

United recently rolled out changes to its status requirements for MileagePlus in 2025, increasing the spending thresholds<\/a> to reach most of United\u2019s status tiers by 20% to 25%.\u00a0<\/p>\n

\u201cIt\u2019s just math that helps inform where these thresholds should be set to optimize for the demand that we have for our product and our ability to serve a great product,\u201d Bondar said.\u00a0<\/p>\n

The most common ways to reach status are either through the number of flights taken and the amount spent, or just purely through spending, which can be done with a co-branded credit card. However, United, unlike American and Delta, require customers to fly some United flights to qualify for status.\u00a0<\/p>\n

\u201cSome of our competitors have gone further in this space,\u201d Bondar said. \u201cWe first and foremost never forget the importance of the fact that we\u2019re a frequent flyer program and we reward our travelers and we want our customers to get on our planes.\u201d<\/p>\n

Travelers Look Elsewhere for Redemptions<\/h2>\n

One popular trend among some frequent flyers is finding cheaper redemptions on international airlines and applying those to their U.S. partners.\u00a0<\/p>\n

During an October event in Manhattan for Air Canada\u2019s Aeroplan, Clint Henderson, a managing editor at The Points Guy, said he felt as if it\u2019s hard to find good redemptions on U.S. airlines.<\/p>\n

\u201cI\u2019m increasingly looking outside the U.S. market for really good redemptions in business class for under a hundred dollars,\u201d he said. \u201cAnd I\u2019m just not finding that these days with American, generally with Delta, especially. Even United has been tough to find. So I think having other options like a real plan is a great strategy for U.S. consumers.\u201d<\/p>\n

Scott O\u2019Leary, the vice president of loyalty and product for Air Canada, told Skift that the frequent flyer program has seen an uptick in activity and sign-ups from U.S. customers.\u00a0<\/p>\n

\"\"<\/figure>\n

\u201cMany of our U.S.-based members are seeing value in Aeroplan beyond what they\u2019re enjoying in their major U.S. airline programs that they also participate in,\u201d he said. \u201cAnd that\u2019s especially when it comes to international travel plans.\u201d<\/p>\n

Bondar said he believed MileagePlus had certain perks that other international programs couldn\u2019t compete with, adding that points on international programs tend to have expiration dates and some charge change or cancellation fees for award flights.<\/p>\n

So Are Frequent Flyer Programs Worth It?<\/h2>\n

While some may be disillusioned with the state of U.S. loyalty programs, many points and miles experts said they still believed these programs had value for most consumers, even those who don\u2019t fly frequently.\u00a0<\/p>\n

Sally French, a lead travel writer for points and miles website NerdWallet, said earning points through a loyalty program is similar to saving money in a bank account. She noted that airline miles are more valuable today than they have been in recent years.<\/p>\n

\"\"<\/figure>\n

\u201cThe reality is we\u2019ve found that these programs are becoming better over time,\u201d French said. \u201cSure, there have been complaints with them, but we\u2019ve seen a lot of programs self-regulate to reduce those complaints. For example, with points and miles expiring, we\u2019ve seen less and less of that.\u201d<\/p>\n

Tiffany Funk, a co-founder of the startup Point.me, said she believes most customers don\u2019t entirely comprehend the amount of spending that is required to earn status or redeem a flight.\u00a0<\/p>\n

\u201cIf you are trying to incentivize customers to be loyal, you\u2019ve got to give them the carrots that are going to encourage them to be loyal to your program,\u201d Funk said. \u201cAnd if you take that away, it\u2019s like, \u2018Well, I held up my end of the bargain. Why didn\u2019t you?\u2019 I think that that is a big part of where it feels unfair.\u201d\u00a0\u00a0\u00a0<\/p>\n

Funk has also noticed an increase in the number of miles required to redeem award flights.\u00a0<\/p>\n

\u201cExactly 10 years ago, I was living abroad,\u201d she said. \u201cWe lived in Italy and a round-trip business class ticket, if you were good at using miles, was about 80,000 points. That was with Delta SkyMiles. Now I would expect to spend about 110,000, if you\u2019re good at points.\u201d<\/p>\n

Sarah Dye, the founder of a Facebook community called \u201cTravel on Points,\u201d said that she believed status had lost some of its sheen, since so many travelers have it.\u00a0<\/p>\n

\u201cI think that status in general has been devalued and there\u2019s way more people that have status than ever before,\u201d Dye said. \u201cI don\u2019t necessarily know what I would want it to look like going forward but I think the way it\u2019s marketed to consumers should be representative of the actual benefit that it bestows.\u201d<\/p>\n

\"\"<\/figure>\n

Bondar said that MileagePlus aims to also create some value for those who don\u2019t travel frequently. The carrier allows customers to purchase fares using a combination of points and cash, for example.\u00a0<\/p>\n

\u201cThe growth that we\u2019ve seen in money plus miles year-over-year is absolutely huge,\u201d he said. \u201cThe growth is off the charts in terms of the customer demand and well over a third of every money plus miles transaction is from members with low balances, members who historically would have looked at what they have and say, \u2018I can\u2019t do anything with this.\u2019\u201d<\/p>\n

Edelman said he believed airlines should add more disclosures to their loyalty program to clarify a customer\u2019s ability to get a solid redemption.<\/p>\n

\u201cI don\u2019t remember that the Department of Transportation\u2019s role or goal is to make it easy, but if the airlines wanted to make it easy, they\u2019ve sure gone in the opposite direction from that,\u201d he said. <\/p>\n<\/p><\/div>\n

Rephrase in a different way as if you were a native American speaker as a content creation expert and do not talk about yourself or your experience in the text and do not show yourself as an artificial intelligence who wrote and fill the bullet point in the topic and speak the heart of the topic itself and dont take date of blog in ther first and dont take text like box of newsliter subscribe on post from content and romove all linke insert in content and and remove all affiliate disclosure phrases on content like this “This post may contain Amazon or other affiliate links that allow us to earn a small commission at no extra cost to you. Please see our Disclosure Policy for more info” and “#” put in its place bullet point, and romove name of the web site or his links we are take a content from our new creation, and don’t publish clone new content more than just one time<\/p>\n","protected":false},"excerpt":{"rendered":"

Loyalty is big business for airlines. In 2023, American Airlines raked in around $6.5 billion from AAdvantage alone \u2014 that included revenue earned from mileage redemptions with credit cards and marketing the program. Delta Air Lines reported deferred revenues of $8.4 billion from its SkyMiles program, and United Airlines had about $7.1 billion in deferred […]<\/p>\n","protected":false},"author":2,"featured_media":5204,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[187],"tags":[971,501,940,1211,4252,193,694,3092,3096,3097,591,1182,234,3095,537,677,3093,3088,3094,3098,649,1997],"class_list":["post-5203","post","type-post","status-publish","format-standard","has-post-thumbnail","category-airlines","tag-air-canada","tag-airlines","tag-american","tag-american-airlines","tag-asset","tag-backlash","tag-business-travel","tag-characters","tag-content","tag-creation","tag-delta-air-lines","tag-dont","tag-experience","tag-expert","tag-jet-stream","tag-loyalty","tag-native","tag-rephrase","tag-speaker","tag-talk","tag-united-airlines","tag-valuable"],"_links":{"self":[{"href":"https:\/\/alfanouscar.com\/blog\/wp-json\/wp\/v2\/posts\/5203","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/alfanouscar.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/alfanouscar.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/alfanouscar.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/alfanouscar.com\/blog\/wp-json\/wp\/v2\/comments?post=5203"}],"version-history":[{"count":1,"href":"https:\/\/alfanouscar.com\/blog\/wp-json\/wp\/v2\/posts\/5203\/revisions"}],"predecessor-version":[{"id":5205,"href":"https:\/\/alfanouscar.com\/blog\/wp-json\/wp\/v2\/posts\/5203\/revisions\/5205"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/alfanouscar.com\/blog\/wp-json\/wp\/v2\/media\/5204"}],"wp:attachment":[{"href":"https:\/\/alfanouscar.com\/blog\/wp-json\/wp\/v2\/media?parent=5203"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/alfanouscar.com\/blog\/wp-json\/wp\/v2\/categories?post=5203"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/alfanouscar.com\/blog\/wp-json\/wp\/v2\/tags?post=5203"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}