Frequent flyers at two of the world’s largest airlines received a reprieve over the weekend. Delta Air Lines and United Airlines announced major changes to their loyalty program, extended previously earned elite status and other benefits. The moves are dramatic, affecting millions of program members.
[A]s coronavirus continues to dramatically impact travel across the globe, you don’t have to worry about your benefits – they’ll be extended so you can enjoy them when you are ready to travel again.– Sandeep Dube, Delta’s Senior Vice President – Customer Engagement and Loyalty
Delta strikes first*
On Sunday morning Delta Air Lines announced that all 2020 SkyMiles Medallion elite status would extend by one year. Qualifications slated to expire on 31 January 2021 would now last throughout 2021 and expire on 31 January 2022. The carrier has essentially written off 2020 as a qualification year, acknowledging that travel will be so depressed that it would completely skew the program demographics. Moreover, all qualifying credits earned in 2020 will roll over to the 2021 balance. Not just those in excess of a qualification tier, but all of them. This represents a potential windfall for anyone that does start traveling again soon for a couple years to come.
The changes extend beyond just the Medallion program. SkyClub memberships will extend by six months. So will Medallion drink vouchers. Upgrade certificates and SkyMiles-linked travel vouchers also get an extra six months of life. The co-brand American Express card members also see expiry extended for lounge passes, credit vouchers and companion certificates.
United Airlines joins the party
Just a few hours later United Airlines announced similar changes to its MileagePlus program. Extending the elite status from 2020 to 2021 matches the Delta move while some of the other changes vary. Rather than rolling over 2020 earning to 2021 United will halve the earning requirements in 2020. This limits the exposure a bit more for United while still recognizing that 2020 travelers need a bit of help on the elite status front.
United’s annual membership programs, like United Club memberships, Economy Plus seating subscriptions or inflight WiFi service all get an automatic six-month extension. PlusPoints upgrade credits are also extended six months.
United’s Electronic Travel Certificates (ETCs) are now valid for 24 months, not just 12. This applies to any previously issued certificate that was still valid as of 1 April 2020 as well as all new certificates issued since then.
The carrier is also waiving all award redeposit fees for travel through 31 May 2020. For the rest of 2020 there are no fees for a redeposit in made 30 days out in advance of the travel.
United also hints of further changes planned for elite qualification in 2021 for the 2022 program year, recognizing “that getting back to travel will occur at a different pace for different members.”
Big moves, but are they the right ones?
Was the time right to make the move? Based on prior communications it is obvious that the airlines have been fielding inquiries on this topic pretty much since the traffic collapse began a month ago. And there’s no doubt that making the announcement now scores some goodwill among members. How could it possible be a bad idea?
With nearly eight months left in the qualification year and massive uncertainty about what the global travel market will look like during that time this could be “either a Genius move or Risky as hell,” according to Mark Ross-Smith, a loyalty program consultant and former head of Malaysia Airlines’ Enrich program.
There is no consumer behavior to change right now, leaving minimal reason to make dramatic moves. A program is not going to lose a member today to another airline (same for hotel programs that are also making similar moves) because there is nowhere for that consumer to go right now. At best this move marginally shifts some cobrand credit card spend right now. And that’s important revenue and an important loyalty metric, but the wallet share shift is likely to be miniscule.
On the flip side, when the time comes to try to induce change from consumers the options are now more limited. The airlines have played one of their biggest moves, reducing the options for a free marketing boost when people are thinking more about a return to travel rather than simply trying to get through another day at home.
It was not a bad choice and almost certainly on the correct level of impact that the programs should be taking. But the timing remains somewhat questionable to me.
*First is, of course, relative. Several airlines in Asia made moves already. Some in Europe did as well. But the US programs are larger and have a broader reach. Also, Delta was the first major program that works on a calendar year basis to adjust in this way. Also worth noting that JetBlue also announced likely changes to earning rules this year but no details yet.
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