Still traveling in the face of the global Coronavirus/COVID-19 outbreak? If you’re flying on Alaska Airlines those trips will now get you even closer to elite status in the carrier’s Mileage Plan frequent flyer program. All flights between 7 March an 11 April 2020 will earn a 50% bonus towards status.
The company announced the program on Friday, following other promotional efforts earlier in the week, including an expansion of its change fee waiver, a giveaway for some tickets to Hawaii and a limited fare sale.
Airlines have only so many ways they can respond to the lack of travelers and the loyalty programs can play a key effort on this front. Mark Ross-Smith of New World Loyalty recently wrote about the potential for elite status deals to help keep the loyal passengers part of the family as the travel downturn unfolds. There are many considerations, but a major factor is targeting the correct customers with an offer:
Choosing the wrong approach based on the program structure type can be costly. Or put more bluntly – gifting or to extend elite status to the wrong customer at the wrong time will have disastrous consequences for airlines on forward bookings and future ticket revenue.
In this context, a blanket promotion to attract passengers comes across as a desperation play rather than a coherent move to secure the company’s best customers. It is a short-term revenue focus, much like slashing fares on near-term bookings, rather than a long-term solution.
Counter this approach with the comments made by some other carriers in the face of similar demand downturns. Michael O’Leary of Ryanair acknowledged that forward bookings are brutal right now, with a 25% hit in some markets. But he also suggested earlier this week that the carrier would “take the hit [on bookings] rather than slash fares.” He could also argue that his fares can’t sustain much more slashing, but that’s not always the case.
There is no guarantee that one approach is right and the other is wrong. Inducing demand to keep planes full helps offset fixed costs while grounding aircraft and slashing capacity trims the operating costs. Airlines must evaluate both factors, as well as the longer-term customer impact, when making these decisions.
For now, however, the loyalty program promo effort is in play and some Mileage Plan members (that likely were flying anyways) are about to gain MVP Status more easily.