Where’s the loyalty to frequent fliers?

Alisa Roth Aug 8, 2008

Where’s the loyalty to frequent fliers?

Alisa Roth Aug 8, 2008


KAI RYSSDAL: Airline stocks got a shot in the arm today from falling oil prices. But the companies behind those shares need more than a momentary boost. High labor costs and high fuel prices have US Airways charging for drinks, even water. JetBlue is charging for pillows. This week American announced it’s tacking fees onto frequent-flier miles. If you’ve tried to redeem those “free” miles lately you know there’s no such thing as a free trip. But the whole idea behind frequent flier programs was to build customer loyalty. So how long can the fees continue before the loyalty starts to disappear? Marketplace’s Alisa Roth reports.

ALISA ROTH: Herb Kuehl is one of those customers airlines should be bending over backwards to woo.

Herb Kuehl: Last year I was out of town 44 weeks.

Kuehl’s carrier of choice is Northwest, even if they cost a little more, because he can usually get a direct flight. And he likes the frequent-flier miles, which he mostly uses for upgrades.

Kuehl says so far he hasn’t had any trouble redeeming miles.

But Michael Boyd says any putting any restrictions on frequent fliers is a dumb idea. He’s an airline consultant in Colorado.

Michael Boyd: Frequent-flier customers are your most loyal. If you tell them, like one airline’s done, “Oh, if you’re a gold, exalted, titanium-level frequent flier, you don’t get any bonus miles if you fly with us. It’s almost like airlines are so panicked over fuel prices, they’re turning on the customer.

Who’s already more interested in getting a bargain than in brand loyalty.

He says changes to frequent-flier programs are typical of other changes in the industry.

BOYD: Overall, we’re looking at a situation where it’s take away and charge for it rather than give people more.

He says don’t count on any big payouts from the airlines to make up for your lost miles, or new ways to use the ones you already have stashed away.

But then, Herb Kuehl points out the airlines are in a pretty good position when it comes to people like himself, who really do have get from point A to point b.

Kuehl: You know, I think it’s getting less and less attractive to fly. But if I’m going from Minneapolis to Los Angeles, the chances of me taking the bus are pretty slim.

Well, Greyhound does have a frequent-riders program.

In New York, I’m Alisa Roth for Marketplace.

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