To call Ron Giancoli a loyal US Airways customer might be something of an understatement. A sales manager from West Chester, Pa., he’s flown on the airline — which recently merged with American Airlines — almost exclusively for the last three decades.
“I flew US Airways even when it wasn’t the lowest price,” he says. “I flew US Airways even when it was a less convenient schedule.”
Giancoli says he’s been an elite-level customer for 27 out of the last 30 years. He stuck with US Airways through good times and bad, through bankruptcies, reorganizations and customer service meltdowns. In exchange for his loyalty, US Airways offered him upgrades into more comfortable seats and award tickets.
And then one day, it didn’t.
Giancoli contacted me recently to say he’d been betrayed by US Airways. He came to that realization as he was trying to book an award seat from Philadelphia to Tampa for next August.
“Virtually every single US Airways flights shows ‘not available’,” for their 25,000-mile level,” he says. The only ones he can get are at 60,000 miles, which most airlines count as a revenue ticket.
Giancoli called it a “scam.”
He’s right about that. The bubble that is travel loyalty programs is imploding and in response, airlines are spurning customers like Giancoli.
Question is, what can we do about it?
The immediate answer, at least to Giancoli’s question, is nothing. An airline like US Airways/American holds all the cards. It can set its award ticket redemption levels at whatever the market will bear and it’s completely legal. So if it wants to create a new 120,000-mile ticket for domestic economy class, it’s free to do that. Maybe it’ll throw in a “free” checked bag.
Wouldn’t that be generous?
After I wrote about the demise of the airline industry, suggesting it would be more accurate to call it the loyalty industry, a well-known loyalty program expert contacted me privately. Not one of those loyalty program bloggers who makes a six-figure salary selling credit card referral links — I’m talking about a real expert who knows his stuff.
He said I’m right, that the recent program changes were “evil,” and that my critique of loyalty programs was warranted. Then he rattled off a long list of numbers from one airline’s 2012 earnings report that, frankly, I couldn’t understand. It was as if someone had switched from English to Mandarin.
My point is, the financials of the loyalty-industrial complex are opaque and incomprehensible to all but a few insiders. In order to understand the rules, you must devote yourself to studying the programs full-time. Who has the time for that?
Airlines are going to do what they’re going to do. Few will understand why, but many will be affected by the recent loyalty program revisions. To them, airlines are unlikely to offer any apologies except perhaps a form letter here and there; they will allow its small army of loyalty program bloggers to defend their indefensible actions.
A tough decision
As a consumer advocate, I’m fortunate that I only have to worry about one thing: What’s best for passengers like Giancoli? I will let others worry about maximizing an airline’s revenues or explaining its nonsensical “loyalty” program.
And the answer to that question? Obviously, giving all of your business to US Airways/American is a terrible idea.
Airlines review their loyalty programs in real time, running sophisticated cost-benefit analyses that are designed to keep their most valuable customers in the fold. Not so long ago, that algorithm determined that Giancoli was no longer a valuable customer. It didn’t even bother sending him a break-up note.
A lot of air travelers are in a similar position right now. For all but a few highflying business travelers, loyalty programs are a zero-sum game. The program apologists will plead with you to stay and learn their rules for “hacking” the system, but they know the truth. They know that as you sign up for that credit card they recommend, and for which they’ll be handsomely compensated, you’re just collecting more worthless points. They’ll laugh all way to the bank, and so will the credit card and the airline.
But you lose.
You have to make up your own mind about loyalty programs. If you’re among the one percent of business travelers, you have my blessing to participate in a loyalty program. But the rest of you — and you know who you are — should listen to unhappy passengers like Giancoli.
Ask yourself: Have you given your airline your blind loyalty? What do you expect in return for your allegiance? Is it obligated to give you that?
“My repeat business meant nothing,” Giancoli told me.
Do you think you’re any different?