Mileage Plus
The management teams of United Airlines and Continental Airlines have never seen eye to eye when it comes to customer loyalty, and that seems to be causing trouble during their merger preparations. My inside sources tell me that Continental executives don’t quite understand United’s big emphasis on loyalty in recent years.
It also appears that Jeff Foland, who last week was named head of the combined carrier’s frequent-flier program, Mileage Plus, will have a tough job selling United’s current philosophy to his new bosses in the Continental team, which will run the company once the merger is completed, most likely around year’s end.
Even though Foland, who has been United’s senior vice president for worldwide sales and marketing since 2006, didn’t have a direct formal role in Mileage Plus’ decision-making, he is said to be greatly influenced by the way his current superiors and colleagues do business. After all, his entire short career in the airline industry has been spent at United.
In addition, all United call centers, including the only remaining Mileage Plus center in Rapid City, SD, reported to Foland, so he is no stranger to the recent drive to turn the program into a profitable business.
Foland will succeed Graham Atkinson, the current Mileage Plus president, who used to have Foland’s present job. As I wrote in February, Atkinson is responsible for changing United’s overall approach to loyalty by proving that what’s good for customers doesn’t necessarily have to be bad for the company.
Most of the changes he made in less than two years on the job have been welcomed as major improvements by Mileage Plus members, including the introduction of one-way awards and eliminating so-called close-in fees, charged when an award ticket is issued less than three weeks before a trip. The attention Atkinson has paid to customer feedback and the degree to which he has acted on that feedback are extremely rare, if not unprecedented, in any customer-service-driven industry.
The bottom line for the company is that, by making and keeping its most loyal customers happy, Atkinson turned Mileage Plus into a money-making business. The bottom line for customers is that Mileage Plus today is probably the best program in the industry, with the notable exception of StarNet blocking. Hopefully, the practice of massively blocking award seats otherwise made available for mileage redemption by United’s partners in the global Star Alliance will soon be on its way out.
It’s no secret that Continental’s priorities have lied elsewhere under Jeff Smisek, its chairman, president and CEO, who will be CEO of the combined airline. Smisek has won much praise for his management style, which has helped the company’s finances during a tough period and significantly improved both its hard and soft products. Continental has chosen to lure passengers in its premium cabins by lowering business-class fares, while United has kept those fares high, resulting in more upgrades for elite customers.
Although that choice has its merits, Continental’s OnePass is hardly a leading loyalty program. There is nothing wrong with trying to attract more paying business-class passengers, but in the current environment, a strong upgrade product would go a long way to securing long-term customers.
United has that product, and so does American Airlines, United’s main competitor. Even though Mileage Plus and OnePass have aligned some of their features, they remain apart in many respects — and most importantly, in their business philosophies. Hopefully, the unpleasant prospect of losing customers to American will prevent the merged carrier’s management from curtailing the more significant benefits in Mileage Plus compared to OnePass.
Related stories:
Flying new United route — rare occurrence
United’s ‘award’ blocking an issue in Continental merger
United executive breaks old barriers
Customers gain sway over airlines
Continental shows new transparency
Continue reading about United, Continental execs at odds over loyalty program
Just as many loyal United Airlines customers hoped that its expected merger with Continental Airlines would put an end to United’s massive blocking of “award” seats made available for mileage redemption by its partners in the global Star Alliance, the carrier made a government filing that raised new questions about its filtering policy.
With all the complex issues United and Continental have to resolve before completing their merger, which would create the world’s largest airline, the “award” blocking is hardly a top agenda item. In fact, I’d be surprised if it has come up at all in their negotiations so far.
However, it’s an important matter for many elite members of United’s Mileage Plus program, as shown by the overwhelming response to my original column exposing the previously secret practice in September 2008. A thread on FlyerTalk.com, the largest online travel community, that was started at the time has had more than 100,000 views and over 2,000 responses to date…
Continue reading about United’s award blocking an issue in Continental merger
Do you find that air travel has become a complex game of numerous airline rules, growing restrictions, oversold flights and never-ending fees? Do you feel knowledgeable enough and prepared to navigate that labyrinth before, during and even after a trip?
I often compare booking travel to a science — with so many different booking codes, fares, upgrade requirements, penalties and other conditions for changes and cancellations, it’s almost impossible for fliers to keep track of it all. That makes them heavily dependent on airline agents, and it’s well known that you can hear different answers to the same question.
It’s to be expected that average travelers have no idea in what booking class their tickets were issued — there are about a dozen coach booking classes, which are not the same as service classes — or how upgrades work. But I’ve been surprised by how many frequent fliers have no clue, either, including people who fly more than 100,000 miles a year…
How many times have you been jerked around at an airport and made to wait in several long lines after a flight delay or cancellation forced a change to the rest of your itinerary? Chances are, that happened abroad. For all their faults, U.S. airlines handle irregular operations better than their foreign peers.
I’ve always wondered why airport agents in the United States — whether at check-in counters, gates or even business lounges — can do almost anything a passenger needs, including rebooking, rerouting and reissuing tickets, while agents in other countries are much more specialized, and thus less helpful.
Rather than make sense of that reality, I’ve found a way to work around it: Whenever possible, I make sure that my tickets are issued by a U.S. carrier. That doesn’t mean that I don’t fly on foreign airlines — in the era of code-sharing, global alliances and other partnerships, that limitation is no longer an issue…
Continue reading about U.S. airlines handle disruptions best
Is there an inherent conflict between the desires of loyal customers and a travel company’s interests? For years, executives have been acting as if there is, despite of what they might say in public. One of them, however, has actually shown that what’s good for travelers doesn’t have to be bad for business.
Graham Atkinson has been president of United Airlines’ frequent-flier program, Mileage Plus, for only 16 months, but while some questionable policies remain in place, he has made a big difference for the better. His approach is not simply to please the carrier’s best customers — it’s to listen to them carefully and find ways to benefit the company at the same time.
Mr. Atkinson, who is also United’s executive vice president and was previously chief customer officer, hasn’t sought much credit for his achievements…
