Do seductive frequent flier programs hurt competition?

If you’ve ever done something for the miles, like Rick Brown has, you probably know the dilemma.

Should you shrug off a higher fare, a less convenient routing or consistently bad service for the promise of a “free” flight?

Brown, who runs a trading company in New York, has done all that — sticking with his preferred carrier, United Airlines, even when the airline struggled. He’s spent hundreds of thousands of dollars on airfares for himself and his family during his career, “more than on any other airline,” he says.

Research suggests many consumers are similarly seduced, and that the siren song of loyalty programs can lure them into booking a substandard product. The debate is particularly intense now, with United’s’ controversial loyalty program changes taking effect this month. It becomes the latest airline to reward customers based on money spent instead of miles flown.
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After loyalty program changes, airlines brace for Million Miler march

vapor trailIf you don’t like some of the recent changes to your airline loyalty program, talk to Mike Croswell. He’s a United Airlines “Million Miler” who assumed that his three decades of devotion to the airline would be reciprocated after he stopped being a frequent flier.

He assumed wrong.

“The money I spent chasing Million Mile status is without a doubt the poorest investment of my career,” says Croswell, who lives in Aspen, Colo., and joined United’s frequent-flier program, MileagePlus, in 1983. “I have zero benefits that were promised to me.”
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Frequent flier program changes you can root for

If you’ve ever asked what the fuss over frequent-flier programs is about, then you know that the answer can be complicated.

Airlines love them because they’re worth billions of dollars in business. They also mean the world to many passengers, because at a time when airline amenities are evaporating faster than jet fuel spilled on a hot tarmac, perks such as upgrades and preferential treatment are just about the only things that make air travel tolerable.

So when two major airlines recently decided to upgrade their loyalty programs, they caught this skeptic’s attention.

Delta Air Lines has eliminated the expirations on its frequent-flier miles. And Southwest Airlines has completely revamped its legendary Rapid Rewards, adopting many of the features of competing incentive programs.

The response from customers offers fresh insights into the volatile relationship between air travelers and airlines, but it also presents us with new opportunities to fly smarter.
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