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Loyalty programs are useless for most travelers

Originally, frequent flyer programs aimed at fostering customer loyalty. However, for most programs this is no longer true. Airlines are now obsessed by short term profits rather than long term customer loyalty.

As a result, quite a few carriers have turned their loyalty programs into profit centers. Some have even transformed their frequent flyer programs into a separate subsidiary.

This development has led to a major change of those programs from distance-based to spending-based. It implies that the price of your ticket determines how many miles you earn by flying, while to a lesser extent your elite status also affects the number of miles you earn.

Many flyers do no longer participate in airline loyalty programs anymore. They do not care which carrier they will fly and whether they will earn miles. Recently, Skift asked more than 1,200 US adults: "When you travel, do you participate in an airline loyalty program?"

Almost 17% of respondents say they always collect miles or points when they fly, whereas 33% say they never collect miles. Some 13% say they sometimes, but not always collect miles when they fly. In younger age groups there are even fewer loyal flyers. Just over 14% of respondents aged 18-44 say they always collect miles when they fly, compared to almost 20% of travelers ages 45 and older.

Because loyalty programs are now profit centers they do not always yield the best deals for travelers. Moreover, those programs can be confusing, while they are constantly changing. Basically, they aim at seducing flyers to pay higher fares.

Lufthansa A380For example, Lufthansa's lowest fare for a roundtrip Frankfurt-Manila in November 2017 amounts to €848 ($989), while travelers will earn 25% of the miles flown.

The next lowest fare is €1,019 ($1,188) that will still earn you only 25% of the miles. The next fare amounts to €1,269 ($1,480) and will earn you 50% of the miles flown. Thus, for earning more miles you will need to buy considerably more expensive tickets.

More and more passengers are now aware that loyalty programs are useless and aim at letting them pay dearly for earning somewhat more miles, making those miles extremely expensive. Therefore, they do not care anymore about loyalty programs, miles and airlines. They just go for the best deal.

 

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