Frustrations grow with frequent-flier programs 2/13/2008 1:38:00 PM Link 0 comments | Add comment Do you have problems using your frequent flyer miles? If so you are not alone. Read this writeup from USA Today.
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That's the assessment of Crain's Chicago Business, which writes "there are now too many frequent-flier miles chasing too few seats" as U.S. airlines reduce domestic capacity while boosting restrictions on seats put up for award travel. "Basically your miles are worth half as much," frustrated frequent-flier Ryan Rassin, a director at an Illinois private-equity firm, tells the publication. He complains that frequent-flier miles are "just impossible to use when you want to go. For pleasure, for upgrades, they're harder to use than they used to be."
Some suggest that the frustration voiced by some frequent-flier programs is overblown. Advance-planning and realistic expectations can go a long way toward making mileage plans more rewarding, those folks say. Still, the chorus of complaints regarding loyalty programs seems to be growing louder, with complaints ranging from unavailable seats to new fees to an upward creep in mileage thresholds for free travel. And if fliers' frustrations do grow over the programs, that could prove problematic for the airlines. Crain's writes U.S. carriers risk having their loyalty programs lose "value in the eyes of customers at a time when airlines are seeking to capitalize on the programs as never before."
Several big carriers have discusses the possibility of raising cash by spinning off their frequent-flier programs. The estimated value of those programs could also come into play during airline merger talks. But could the value of those programs suffer as fliers' complaints mount? "If I was an investor in a spinoff of a frequent-flier program, I'd be awfully nervous that it's at the maximum value it's ever going to get," FareCompare.com CEO Rick Seaney tells Crain's.
The number of miles going into frequent-flier accounts also could continue to surge, even as airlines keeping trimming domestic capacity. Take credit cards companies, which have especially been drawn toward using airline miles as a way to lure customers. While credit-card promotions offered as little as 2,500 bonus miles in their early days, now "there are some offers out there at almost 40,000 miles," says frequent-flier guru Randy Petersen, publisher of InsideFlyer. But padding accounts with those miles without good options to use them may simply alienate customers. "When you have the miles and can't use them, it's like having cash that you can't spend," Chicago frequent-flier Jennifer Hayob says to Crain's.
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