redemption Archives | Nicholas Kralev

Why airline alliances are good for fliers

The Star Alliance’s 15th birthday this month reminds me that a global airline alliance is one of the most fascinating concepts in the history of commercial aviation. It’s also an example of the airline industry’s creative thinking aimed at increasing revenues. However, unlike some of the questionable practices I described in “Decoding Air Travel,” this one has dramatically improved the customer experience.

It’s fascinating for me personally, because it combines my two passions and areas of expertise, international affairs and air travel. In fact, what alliance executive teams do every day is nothing short of diplomacy. International negotiations and dispute resolution are two of their specialties, and a big part of their duties is selecting new members, not unlike NATO and the European Union.

When Star was formed in 1997, the idea was not only to represent its members’ best interests — that’s primarily the job of trade associations — but to boost business by feeding passengers from one carrier to another in the smoothest possible way. Soon, airline diplomacy began in earnest — first among alliance members, which after all are rivals in a fiercely competitive industry, and then with airports, transportation authorities and governments around the world. The other two global alliances are Oneworld and SkyTeam…

The benefits of non-airline credit cards

You may have seen TV commercials featuring American Express or Capital One credit cards that promise points or miles with the clout to get you any seat on any airline without blackout dates. Those financial services companies try to distinguish their own loyalty schemes from airline programs, which restrict access to award seats.

Non-airline programs are not affected by award seat limits, because they don’t need award availability to book you on a flight. Instead, they sell you a regular revenue ticket, charge the ticket price on your credit card, then credit the cash amount back to your card and take miles or points out of your account, whose number is based on a standard formula…

‘Tweaking’ airlines’ yield management

Have you been accused by airline agents of trying to “game the system” by asking if they could open up for mileage redemption seats they obviously won’t sell for cash? Now a top airline executive is encouraging fliers to alert agents when the system fails in its predictability, so it can be “tweaked.”

Before you do that, however, make sure you know what you are talking about — learn all booking codes used by the respective carrier, if you haven’t already, and be able to access and understand its inventory data. Just because there are dozens of open business-class seats months before a flight doesn’t mean you are entitled to an upgrade or an “award” ticket…

United executive breaks old barriers

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…

Hotels offer flexibility to earn loyalty

What makes a hotel loyalty program most competitive? Is it the elite benefits it grants its best customers or the variety of options it offers for redeeming earned points? Does it matter who’s asking: a program executive or a traveler?

It turns out, it does. As a customer, if I decide to be loyal to a hotel chain, the first thing I do is look up the requirements for achieving top elite status, and then the benefits that status would give me. Only after that do I consider the value of the program’s points. However, Steven S. Sickel, senior vice president for distribution and relationship marketing at the InterContinental Hotels Group, who oversees the chain’s loyalty scheme, Priority Club, has a different perspective…

Airlines try to unload frequent-flier miles

Is the airline industry having a change of heart about the way it lets you spend your frequent-flier miles? After years of making mileage redemption difficult by limiting seats and adding steep fees for “free” tickets, the first signs are now emerging of some carriers’ realization that those policies may be backfiring.

Not only have they alienated customers, but they appear to have weighed heavily on the airlines’ books, in which unused miles are a major liability. United Airlines, in particular, seems to really want you to burn your miles. After discounting domestic and European mileage tickets this year, it became the first major carrier last week to eliminate “close-in fees” of up to $100 for booking an “award” less than 21 days before travel…

United risks customer loyalty over award blocking

United Airlines seems to be playing a dangerous game. It has implemented an “award” redemption policy that saves the carrier a lot of money but has been denounced by loyal customers as deceitful. In frustration, some of those passengers are turning their backs on United, depriving it of valuable revenue.

The customers want the airline to stop blocking “award” seats on flights operated by United’s partners in the global Star Alliance, which those carriers have made available for mileage tickets. United, however, is balking. Apparently, it saves more money by not having to pay its partners for those seats than it loses by driving some passengers away. It’s likely to continue to balk until the balance shifts. But how long will it take?…