COVID-19

Airlines are tweaking frequent-flyer programs to keep customers loyal after lockdown

Jack Stewart May 5, 2020
Heard on: Marketplace Morning Report
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Airlines haven't had to pay much attention to loyalty programs in recent years because demand for flying has been high. That's going to change. Justin Sullivan/Getty Images
COVID-19

Airlines are tweaking frequent-flyer programs to keep customers loyal after lockdown

Jack Stewart May 5, 2020
Airlines haven't had to pay much attention to loyalty programs in recent years because demand for flying has been high. That's going to change. Justin Sullivan/Getty Images
HTML EMBED:
COPY

There’s news United Airlines will cut 30% of management jobs in October, and a report from Reuters says about 30% of United pilots maybe “displaced.”

At a time that few are flying, the airlines are still trying to find ways to keep their most lucrative customers engaged. It’s about frequent-flyer programs.

Customers like Jasmine Mazyck are the reason why airlines have frequent-flyer programs.

“I am extremely loyal to American Airlines,” Mazyck said.

Her typical travel for her job, as an entertainment publicist, is enough to earn her high enough status to get perks — free checked bags, early boarding and lounge access. She took eight flights in the first couple of months of this year, before movement restrictions around COVID-19 kicked in.

Now, she’s worried she might lose her status.

“Every year you start over, and you have to reaccumulate your points, so it is extremely difficult this year because a lot of us are on hold from traveling,” Mazyck said.

These programs are important to business travelers, who are, in turn, crucial to airlines as they pay for those profitable business class seats, says Samuel Engel with the aviation group at consultancy ICF.

“You could be looking at a group of people who are 2% of the airlines flyers, and over 15% or even 20% of their revenue,” Engel said.

The last thing airlines want is to give travelers any excuse to rethink their favorites. American, United, Alaska, Southwest and Delta say they’ll extend elite status until, at least, into 2021, and make it easier to qualify this year.

Airlines haven’t had to pay much attention to their loyalty programs over the last few years, because they haven’t had to fill empty seats. Demand, and profits, have been high.

Gary Leff of the View from the Wing, which covers frequent travel, says that could change now, if travelers are slow to come back.

“It’s going to be a rejuvenation of frequent-flyer programs, because fundamentally they’re the primary marketing vehicle that travel providers have, and marketing’s going to be a lot more important in the coming environment,” Leff said.

Airlines and passengers will have to wait to see what air travel looks like as movement restrictions are lifted.

COVID-19 Economy FAQs

How are Americans feeling about their finances?

Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.

Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.

Are people still waiting for unemployment payments?

Yes. There is no way to know exactly how many people have been waiting for months and are still not getting unemployment, because states do not have a good system in place for tracking that kind of data, according to Andrew Stettner of The Century Foundation. But by his own calculations, only about 60% of people who have applied for benefits are currently receiving them. That means there are millions still waiting. Read more here on what they are doing about it.

What’s going to happen to retailers, especially with the holiday shopping season approaching?

A report out Tuesday from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.

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