The tyrannical world of airline frequent flyer programs

The tyrannical world of airline frequent flyer programs

If the world of frequent flyers was a world of its own – a place where points were the currency of the realm, the rules of airline reward schemes were the laws of the land, and each loyalty program was its own country with the airline CEOs as leader of that nation (think of the island-continent of 'Qantas' instead of Australia, for example) – well, it'd be a pretty bleak place to live!

This imaginative article from FlightFox staffer Grace McClure brings fresh focus onto the ever-diminishing value of frequent flyer programs by recasting them as sovereign countries in a world tagged Loyaltania.

Airlines are getting out of control. They're devaluing their loyalty programs at the same rate meth addicts devalue their teeth enamel.

It can now take almost twice as many frequent flyer miles to redeem the same flight.

This is becoming more and more common, so it's time to investigate.

Enter the world of Loyaltania

In thinking about the problems surrounding airline loyalty programs, I was instantly reminded of Argentina's unstable black market economy.

The parallels between loyalty programs and the economic instability in Argentina sparked the idea to approach this article in a unique way. What if these loyalty programs were considered as sovereign countries?

To rephrase, what if each loyalty program represented a different country?

What if when considered together, these "countries" formed an alternate world called, say, "Loyaltania"?

What would Loyaltania look like? Would it's countries be even more flawed than those on planet earth?

In keeping with this sci-fi approach, we would consider the following:

Frequent flyer miles = Currencies

Loyalty program "terms and conditions" = Laws

Airline CEOs = Presidents

...and so forth.

Anti-democratic governments

The political systems of most countries in Loyaltania deny citizens any participatory power. These citizens have little say when it comes to the proposal and creation of governing laws.

Similar to a totalitarian regime, those in power of Delta (and most others nations such as American, United and Qantas), have complete authority to upheave their laws at anytime:

"Delta and its program partners reserve the right to change program rules, benefits, regulations, travel awards, fees, mileage award levels, and special offers at any time without notice."

Lufthansa also maintains its right to amend its laws and, "if a member rejects the programme changes, membership may be duly terminated".

Even more boldly, United reserves "the right to terminate the program… in whole or in part, at any time, with or without notice".

Wait, terminatedWithout notice?

What if Delta's President, Richard Anderson, becomes particularly moody? What if Jeff Smisek, the President of United, doesn't like Mondays? Or, what if Prime Minister Franz of Lufthansa has a bad hair day?

The ultimate betrayal

When the sovereign nation of United merged with that of Continental, it became obvious the citizens had little say.

With the merger, United's most loyal citizens, the Million-Milers (a particularly loyal classification of United frequent flyers), lost nearly all of their lifetime benefits and had no means to get them back. Lifetime regional upgrades were taken away, bonus miles were slashed, and boarding priority was dropped.

The majority of these citizens spent decades exclusively flying the United flag in order to arrive at their Promised Land of lifetime rewards. But in one fell swoop those in power completely changed the rules.

Talk about the ultimate betrayal! If hard-earned status is rendered meaningless overnight and citizens have no say in the decision, there's no denying that the nation of United is a tyrannical dictatorship.

Out-of-this-world inflation rates

The United government also recently announced massive inflation to MileagePlus redemption rates, which affects all members, not just Million-Milers.

The mayhem is set to begin on February 1, 2014. These changes mean a massive devaluation of miles via an increase in the amount required to redeem award flights.

Instead of just increasing the cost of most United award flights, the country has also increased the cost of partner rewards. As of doomsday, the number of miles required to redeem with Star Alliance partners will go up as much as 90%.

Let's look at a round-trip United Airlines MileagePlus First Class award flight from the USA to the Middle East.

In 2013, with either United or a Star Alliance partner airline, this costs 150,000 miles.

But from 2014, taking the same flight on United jumps to 180,000 miles – an increase of 20% – while on any Star Alliance partner is skyrockets to 280,000 miles, or a staggering 87% more.

This devaluation is effectively the same as an unstable country's high inflation rate.

In fact, let's consider the real nation of Argentina, which is renowned for having a high inflation rate. In some cases, United's inflation is about 900% worse!

You thought you were safe living in the US, UK or Australia? Well, think again.

If you're a United MileagePlus member, you'd be much better with Argentine pesos under the mattress.

Elitism and capitalism rules

The elitism that sweeps throughout the nations of Loyaltania is at an all-time high. Not only do select individuals control its economy and political power, but few citizens are able to benefit from the system itself.

Similar to corporate capitalism where the rich get richer, only the elite profit from the current systems that dominate the lands of Loyaltania.

To properly navigate the various nations of Loyaltania, it requires PhD-levels of study. Laws are ambiguous and require extensive research.

Without this research, citizens only get a fraction of the value of their miles. Essentially these airline nations are mandating gigantic taxes on the time-poor.

Those few who have invested the time in researching and experimenting the best use of miles are the airline loyalty elite; they are often referred to as "flight hackers" or even only by their street names, such as The Pudding Guy.

These elite are the only citizens consistently getting great value living in Loyaltania. The rest spend more money, redeeming blindly, passively awaiting their big break.

As an example, with Air Canada's Aeroplan program, an Around the World trip costs a whopping 400,000 miles in first class.

But, a citizen of the elite could construct the same for just 175,000 miles. It's the same way that massive corporations in our real world use their expertise and political clout to structure their businesses in tax havens and pay a fraction in taxes that average citizens do.

Life in Loyaltania looks bleak

The most premium airline loyalty programs are as unstable as the least developed countries on earth. These programs are plagued with economic uncertainty, their political systems are unjust, and they're particularly elitist.

If loyalty programs were originally designed to reward the most loyal, why are these latest moves designed to betray their loyalists?

If airlines are permitted to peddle their own currencies, just like sovereign nations, why aren't they similarly held to account for causing great economic upheaval?

Until this happens, life on Loyaltania is only set to get worse. Brace for the apocalypse... 

This article first appeared on FlightFox, a website where frequent flyers and other expert travellers compete to find the best price for your next trip.

Follow Australian Business Traveller on Twitter: we’re @AusBT

David Flynn
David Flynn is the editor of Australian Business Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.
 

10 comments

  • Hugo

    Hugo

    3 Dec, 2013 03:22 pm

    The silly extended metaphor doesn't really help.

    No member give thanks

  • Brent

    bammac

    3 Dec, 2013 04:20 pm

    I wonder if there has been any FF program that HASIN'T had to 'enhance' it's program to the detriment of it's members in the last 10 years.

    It always seems that the members get less than what they had previously.

    No member give thanks

  • TheRealBabushka

    TheRealBabushka

    3 Dec, 2013 06:07 pm

    "Dear Valued Frequent Flyer,

    I am writing to let you know of some changes we have had to make to our frequent flyer programme.

    We really dislike having to do this but the state of competition in our industry has been intense and we know how tired you are of hearing us blame our woes on the price of jet fuel. Fact of the matter is, our shareholders demand we meet our targets so we're very much caught between a rock and hard place.

    But to show you we are not taking this lightly, we are freezing executive pay for the year and will be giving a non-vulgar bonus to our executives.

    You see, at the end of the day our staff choose to work with us because they are passionate about the company and not just out to chase the dollar.

    While we know not everyone will be happy with these frequent flyer changes, we hope you will understand and continue to help us make this a great airline.

    Yours sincerely,

    CEO"

    I know this is wishful thinking but honesty and sincerity goes a long way.

    No member give thanks

  • watson374

    watson374

    3 Dec, 2013 08:30 pm

    If a frequent flyer programme was a state, it would not merely be totalitarian; it would not be unjustifiable to decry the resultant state a brutal theocracy.

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  • PLATY

    PLATY

    3 Dec, 2013 08:46 pm

    It seems strange that AusBT publishes this article, even under the aegis of attribution to a third party. The article is not news, not analysis, etc.

    Does AusBT see its primary goal to disseminate "news", and/or to analyse current issues of issues relevant to business travellers, and/or to provide or not a forum of issues of consumer concern, to provide advice of beneficial benefit to business travellers, etc., etc. 

    This is a genuine question, not a criticism (as no doubt some short sighted readers will be prone to interpret).

    No member give thanks

  • Al Glidden

    AlG

    3 Dec, 2013 09:02 pm

    "It seems strange that AusBT publishes this article, even under the aegis of attribution to a third party. The article is not news, not analysis, etc."

    Very true PLATY but it's interesting all the same I think.

    "Does AusBT see its primary goal to disseminate "news", and/or to analyse current issues of issues relevant to business travellers, and/or to provide or not a forum of issues of consumer concern, to provide advice of beneficial benefit to business travellers, etc., etc."

    I think that's a question which only David can answer but why can't AusBT be all those things? Why does AusBT or any site have to be only news and/or analysys, only a forum, only offer advice or only anything else?

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  • TheRealBabushka

    TheRealBabushka

    3 Dec, 2013 11:37 pm

    PLATY,

    It is what we make it out to be. That's the beauty of it!

    It's fantastic to hear the views of contributors to this site... ALL contributors not just those who write articles.

    The level of sophistication from our contributors is amazing! And it is so refreshing reading the prose. You have no idea how much I wince when reading the meandering and whiney prose of Americans on those Flyer Talk forums! Get to the point! Have you not heard of topic sentence?

    No member give thanks

  • watson374

    watson374

    4 Dec, 2013 12:44 am

    I think this is an interesting and refreshing, if brutally cynical, viewpoint on the frequent flyer world.

    After all, I don't call it a theocracy for nothing. We take it seriously, and believe in it. We make sacrifices to the gods, in return for holy merits (sorry, status credits). When we have served the Empire of the Holy Order sufficiently, we are elevated to a higher status (PS, SG, WP, etc.). For a while.

    I'll stop here, in case (this being the internet) some irate netizen attempts to Zerg rush me with some angry but nonsensical arguments.

    No member give thanks

  • David Flynn

    David

    4 Dec, 2013 08:46 am

    Hi PLATY... true that this article is not 'hard news' as we usually present it, nor is it hard-core analysis ("such-and-such is happening, what's driving it and what are the implications?"). That doesn't stop it from being an interesting read and an interestingly different 'take' on frequent flyer schemes, and that's what makes it a fit for AusBT.

    As a rule, there's an "impact vs interest" metric on all stories we run: how much will it impact readers vs how much will it interest readers. The majority of our stories lean towards the former, but many fall into the later camp (this story is one example, the story on the upstairs crew rest loft on the Boeing 787 is another great but-chosen-at-random example: nil impact but likely a high degree of interest). Of course, a 'high impact' story is also likely to be a 'high interest' story, whereas a high interest story doesn't have to be 'high impact'.

    But is our goal A, B or C..? It's all of them, as best as we can cover (with the time & resources available). Just as a newspaper isn't front-to-back 'news' (it's a mix of hard news and soft news, plus other assorted stuff), AusBT aims for a bit of a mix in reading.

    No member give thanks

  • PLATY

    PLATY

    5 Dec, 2013 06:16 pm

    Thanks, David. Personally I like the diversity, so here's to the AusBT team keeping up the good work!

    No member give thanks

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