Originally Posted by
RealDLInsider
Something to Ponder: Consolidation is all over the media, on the minds of airline investors, and in turn, discussions are likely being had with various airlines. Just to be clear, I’m not aware of discussions nor am I a part of any that may or may not be happening. However, as I think through what could happen in 2008, I wonder how two airlines might design any type of consolidated loyalty program. Specifically, with rumors of United and Delta, or scenarios that could put Northwest and Delta, or Continental and Delta together, what might be the good and bad that you keep in a consolidated program. For example, in a world of United/Delta, do you charge or not charge for upgrades? It’s easy to say that you would not want to from a customer perspective, but what about the number of elites and the ability to additional revenue off of discounted fares? Do you have three tiers (one at 75K or one at 100K), or do you have four tiers? Or better yet, do you have a tier at 150K, since a larger airline with a bigger network could make it easier to earn miles. What co-brand card offering is the best? Would you prefer to have two co-brand card options – an AMEX and a VISA/MC option? In a Delta-Northwest or Delta-Continental program, with the loyalty programs already fairly similar, do you keep them the same or do you adjust them? In what ways? Is UA, DL, NW and CO currency equivalent and would you simply just consolidate them into a 1:1 point transfer?
Again – not something that we’ll for sure have to deal with in 2008, but in the event we do, initial feedback would be great. Sorry so open ended, but just a few things I ponder while out on holiday.
Jeff
In terms of consolidation, I believe that in the past, the surviving airline recognized the absorbed airline's FF program at a 1:1 basis. As far as whether the newly merged program would need adjusting, I am puzzled by the fact that you have posed this as a question to us! You guys are always adjusting the program anyway, so why would we ever assume that there would not be some more "adjustments" after a merger of two (or more) carriers?
As far as how many tiers, you already have info that we can only guess about... how many PMs there are, how many GMs there are and so forth. And even more important, what is the proportion of your revenue derived from PMs as a group, GMs as a group etc.
This may sound crazy, but I believe that some effort should be made to identify "source" medallions, and definition of which would be medallions who not only direct their own travel, but those of their family members or associates as well. For example, I have booked as many as 5 family members at a time on an paid international BE itinerary... now each got the mileage credited to their own accounts, but in the realm of things, there should or ought to be some recognition of the "source" of the booking. Keeping the "sources" happy is important in this day where we can earn MQMs on so many other carriers.