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Frequent Fliers' Wings Are Clipped
Travelers, such as those walking through the terminal at Reagan National Airport, are being hurt by fuel costs.
(By Brendan Smialowski -- Getty Images)
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Each program has specific rules and award levels designed to satisfy loyal customers. Airlines use a combination of variables to determine the availability of frequent flier seats, including season and popularity of destinations.
Rick Seaney, chief executive of FareCompare.com, an airline ticket research site, said airlines run the risk of angering their best customers with the loyalty program changes.
"I don't understand why the airlines think they need to do this," he said. "They are basically watering down the points by changing the programs. I consider it to be like Russian currency in the early '90s when it lost its value."
There's likely to be little improvement. Seaney predicts that there will be a total of 70 million fewer seats available on airlines next year following the route and frequency cuts they have announced this year. He said that means that planes are going to be packed, giving the airlines even less reason to give away seats.
He and other travel analysts are recommending that travelers book tickets as soon as possible to try to escape some of the fees that haven't hit yet. Effective Sept. 3, Continental will make it harder for customers on the low-end of its frequent flier program to get seats on high-demand flights. On Oct. 1, American Airlines will impose a nonrefundable "co-payment" of $50 for one-way upgrades for frequent flier customers who buy economy tickets for U.S. destinations. The fee rises to $350 on some international routes.
Earlier this week, Continental imposed a $75 booking fee for customers who don't book tickets three weeks in advance. As of last week, Delta frequent flier customers have to pay a $25 fuel surcharge to redeem tickets for travel within the United States and Canada and $50 on international routes. American Airlines is charging a $5 online booking fee, which went into effect June 21.
Although oil prices have fallen from a peak of $145 per barrel to $115, Billy Sanez, an American Airlines spokesman, says it's too early to expect a reduction in the fees. Analysts say fuel costs account for 40 percent of operating expenses, up from 15 percent a few years ago.
"It's still exorbitantly more than it was last year or two years ago," Sanez said. "As the market changes, we'll reevaluate."
Southwest, which has 70 percent of its fuel costs locked in at $51 a barrel, remains the exception to the program changes. Southwest charges nothing to redeem a frequent flier ticket over the phone and doesn't have any added fuel fees. Southwest also hasn't joined rivals in charging for the first or second bags, sodas or snacks.
"We feel like it's what you see is what you get, and we're not going to slap on a bunch of fees," said spokesman Chris Mainz.
The one silver lining to the program changes: Airlines have made it easier to learn online which flights don't have available seats.
"At least you don't have to waste your time finding out you can't find a seat," Seaney said.
