It certainly seems that when they devalue miles, peoplge get 'excited'-- although not in a good way. http://www.flyertalk.com/forum/smile.gif

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Da DOK

Partner miles not posting, no awards ever available on CO, and lack of overall knowledge by employees.

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No thanks, I'm just lurking. Call me the Lurker!

Thanks for all the input. One thing is still a bit hazy. There seems to be a loose use of the word "devalued" without clear examples of such and the interpretation is different from member to member. Could any of you that used this word please add to the input? Thanks. Note, if an award level is raised, is that devaluation of the entire program vs. additional benefits such as expanded alliances, etc. which might tend to balance things out. Is there any sense of 'added value' to these programs or so you always view things as being devalued? Curious questions to round out the research. Again, thanks.

The primary devaluation we see is rapid inflation of the # of points required to get an award. U plan and save and save and then the airline or hotel chain moves the target.

I think the "devaluation" king for 2003 is Hilton.

50% increase in points to score a GLON. 50%!!!!
Delta/United/and Continental drop out of points exchange.
To top it off, bonus programs have been far and few between.

Building up enough points to stay a week at an average hotel takes a mountain of paid stays. point exchange and last year's bonus programs got me some great stays. The points I will earn this year as as Diamond won't even come close.

I think it's time the Programs paid "interest" on balances to make up for the inflation.

It seems the straight-on devaluations, like Goldpoints/Radisson going from 4:1 to 8:1 conversion, are in the minority though still a real pill to swallow (and something to destroy future confidence in a new program). But at least they lay their cards on the table, even with no notice.

Far more insidious and ire-inspiring is a situation like Continental, which not only devalues but also says things that are suspect. The elimination of 20K off-peak awards was supposedly due to "low demand" for the award, though I would seriously doubt that and don't think anyone who was offered a trip that fit for 20K would refuse it just because they wanted a "standard" award. And low demand didn't deter CO from recently creating a separate Asia to Australia category just to keep people from being able to fly through NRT to CNS for 25K, which hardly anyone was able to do anyway.

The bigger devaluation problem at CO, though, is extremely low availability and all the EasyPass-or-don't-fly situations it creates. It's a stealth devaluation of 50%, and in the future we could see repeated 5K devaluations on the standard tier (heavily defended in press releases) "automatically" ripple into 10K ones with EasyPass. As Sen. John McCain says, "The fix is in."

Making it more unpalatable is the lack of transparency. CO and other airlines don't want to divulge enough info to give an accurate picture, which just adds to suspicion. With airlines trying to invent fees right and left and gouge on some with no relation to their own costs, there's unfortunately a lot of mistrust.

My biggest bug-bear is that FF programs were designed to promote loyalty to the airline and now (look at all the postings on this thread), they are singularly failing to do so.

I've lost count of the number of flights BA have classed as "ineligible" (no points and no miles) - that included a return from London to Singapore.

I've lost count of the lost miles on KLM because they (used to) drop off after a period of time and I ccould never get enough to get an award before that happened.

I've lost count of the issues with using AA miles on European routes - for example they charge (a lot) more miles than the partner airline that they are sub-contracting the actual flight to.

With so many corporations seeking value fares now, the airlines are doing themselves no favours by alienating the very individuals they claim to be wanting i.e. us the frequent travelers.

Loyalty programs - lol.



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Travel well and arrive home safely,

Jon David
http://www.simplyjond.com

For all my kvetching about United, the introduction of Star Alliance awards was big boon to members.

Used to be that if you wanted to fly on a partner it was a partner award, period. Now you can mix and match carriers and you cna do so in the same class of service.

I remember in my pre-Flyertalk days calling United and asking about C flights to SYD. I had a choice of UA or NZ. If I chose NZ, I had to fly in coach on UA to LAX (from IAD) and UA described their giving me that flight as "a courtesy".

Now just look: folks flying SQ, TG, ANA, and UA all on the same award and all in a premium class of service (and believe it or not, there HAVE been a few documented examples of redeeming a premium SQ flight).

Alliance awards ARE a big enhancement. And alliances more generally are too ... the ability to accrue status miles on more carriers.. the extension of benefits (lounges, checkin and boarding privileges) too. The really great alliance benefit which is all too limited now is partner upgrades. UA FFers can upgrade on LH (though this benefit is limited). DL FFers can upgrade on AF (limited to transatlantic flights). There's some reciprocal upgrade benefits on CO/NW with KLM.

So Randy, you're question is a good one, there are enhancements and sometimes those may balance out.

I'd love to know what balances out British Airways massive increase in redemption prices, though... And I think that AA's price increases coupled with increased partner award flexibility is something of a mixed bag.

I guess I'd love to hear the perspective of program executives on this. Do they see the two things (increased point requrements, increased award possibilities) as linked? And if so, what's the profile of flyer they have in mind to benefit, and do they have a sense of the profile of flyer that loses out?

In these changes some people gain and others lose. And whether something is an enhancement or a devaluation all depends on the preferences of the FFer. But some enhancements are more equal than others...

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View from the Wing: A blog about Free Miles and Free Markets

One thing that the airlines do quite successfully is to make several changes at once to their program so that they can cite some good feature and say that they are "enhancing" their program.

As an example, Northwest did not have a Saturday night stay requirement with their FF tickets. Then they had an alliance with Continental and introduced a Saturday night stay requirement. At that time they also expanded the off peak ticket timeframe for their 20K ticket. Having three changes (alliance with CO, Sat night stay, expanded 20K tickets) makes it very hard to say whether or not this was a devaluation - and NW no doubt labeled it as an enhancement. Now the 20K off peak tickets have been eliminated by NW, and in my opinion the disadvantage of having a Sat night stay is not offset by the CO alliance. So in this case NW has devalued their program IMO.

I would say that in most cases (with rare exceptions), the award level raises are not compensated by the other changes (like alliances), so it is a net negative for frequent fliers when award levels are raised.

Another clear example of devaluation is when BA raised their award levels this year.

If I recall correctly, NW introduced their Saturday night stay requirement about a month after United introduced one... United took all the heat and rolled theirs back. Northwest's more or less crept in under the radar.

Did NW do a better job 'getting away with' the Saturday night stay because all the focus was on United, or because they also introduced enhancements at the same time?

Re: Randy's question on "devaluation" -- there are two kinds. Overt and covert.

Overt is what BA did this spring. They blithely, if openly, raised redemption levels for all premium-cabin awards (F to Europe went from 100k miles to 150k, and other award levels more than doubled). This devalues existing account balances dramatically, and sets back people "saving" for a particular award. On discount tickets, they also reduced mileage-earning rates to 25 percent of actual miles flown. Result: the BA Executive Club's value proposition is diluted so badly, it no longer matters very much to very many people.

Then there's covert devaluation. Continental is the prime example here. The rules and redemption levels look attractive, but when you actually try to work the program you find the program doesn't actually work as advertised -- you virtually have to buy EasyPass awards. Over time you realize the 100% mileage "bonus" you're earning as a Gold, for example, is no bonus at all, because you have to redeem 2X the standard miles for most awards.

Covert devaluation provokes less short-term outrage than a BA-like overt move, but more long-term anger and cynicism. It's like when a car dealer advertises a $15,000 models in the paper with the tiny-print caption, "One at this price," but when you visit the dealer all the models actually cost $26,000 and up.

The one thing overt and covert devaluation have in common is: they challenge and degrade loyalty rather than building it. Members are always open to competing programs; the grass is always greener. I think devaluation has become so common now, customer exhaustion and anger are finally bigger drivers than customer inertia and blind loyalty.

In closing -- what amazes me most of all is this: in the post-September 11 world, with air travel more stressful and scary and more if not most people thinking twice about taking that extra trip... most airlines have acted not to shore up vital customer relationships but test/stress them. A smart service provider uses a period like this to deepen ties to its most vital (present and future) clients. A dumb one cuts benefits, adds costs and fees, and invites steady customers to audition alternatives. Why can't more airlines be smart?

[This message has been edited by BearX220 (edited 09-09-2003).]

[This message has been edited by BearX220 (edited 09-09-2003).]

I do not know the timing of the United proposed change, but the NW change was as a result of the 1999 alliance with Continental and it was was debated in FT - it did not "fly under the radar". While some people were not happy with the change, many accepted it because NW added other positive changes - the main positive change being the expansion of the 20K award. Other changes introduced at that time included removing the mileage expiration.

Using NW miles on KLM is getting extremely difficult. KLM makes very few seats available, and they open the transatlantic seats a month earlier than the intra-Europe flights that you need to go anywhere beyond Amsterdam. And you don't even have the option to rulebust on the KLM flights!

NW won't let you book part of the itinerary and wait for the rest to open (DL did this for me on AF flights this year... kudos to DL!) NW requires you to ticket immediately with whatever seats are available, then charges you $50 to change anything at all.

Maybe I'll get lucky and NW will replace KLM with AF. I really like to fly KLM but the ordeal of getting summer seats even 11 months ahead is a deal-breaker.

I sure wish Goldpoints hadn't pulled that 50% devaluation and forced me to convert to miles immediately. It would have been great to be able to put the miles into whatever program is working best at any given time. And they would have deferred incurring the cost of buying the miles. What jerks.

To those griping about Hilton's VIP devaluation: get over it. The old award levels were ridiculously generous, and unsustainable. We had a much longer ride than we deserved.

Oh, and one other thing. Southwest Airlines rules! Check that board for a secret 15% off sale that started today, and book your mileage (credit) run now!

Not terribly creative but:
1)Standard Award availability
2)Program devaluation
3)Employees who don't know the program's rules, but think they do.
4)Code shares don't count as flights of your chosen airline, particularly for upgrade purposes (so, for example, a UA freq flyer can use miles or system upgrade coupons to Australia on UA flight, but an AAdvantage flyer can't upgrade on AA coded flight to the same place).

The total disregard of the customer by many carriers.

Devaluation of points and miles

Changes that make it impossible to continue with a program... ie DL's massive screwing of SkyMiles members

1. Seat and upgrade availability, particularly when award inventory often opens up a week or two before the flight, compounded by...

2. how airlines charge "expedite" fees for the extreme hardships they face issuing electronic award tickets less than 21 (or 14) days before departure (AA are you listening?). Can someone please explain to me why issuing a ticket 20 days before a flight is more trouble than issuing one 22 days prior? If anything, airlines should be providing an incentive to fill a seat at the last minute that might otherwise go unused.

3. Devaluation of miles earned, both by increasing miles needed for awards (especially business and first seats) and by flooding the system with people earning miles without flying (but competing for the same inventory).

4. Lack of notification about important changes to programs (usually discovered after the fact because when the airlines do devalue their programs, they bury the announcements), compounded by...

5. Lack of printed membership rules - in the last 2 years most (all?) airlines have stopped publishing the pamphlets that made it easier to understand the intricacies of the programs. It is unreasonable to expect that, any time I want to earn or burn miles I should have to wallow through an airline's web site to find out whether I can use the program the same way that I did last year. By eliminating the rules pamphlets, the airlines can now change anything they want at the drop of a hat (and do) and can regularly default to "that information is contained on the web site" (even when they often can't tell me where to find it).