Frequent flyer subscriptions are typically a terrible value for consumers (see below). JetBlue aims to change that story with the launch this week of its TrueBlue Subscriptions “Points on Repeat” product. Members will have access to three different package options, with benefits beyond just the points.
With Points On Repeat and the ability to use points for extras, we’re giving our customers more control, more flexibility and more ways to make every trip their own while earning and saving along the way.
– Ed Pouthier, vice president of loyalty and personalization, JetBlue
The trio of packages – Points Traveler, Points Adventurer, and Points Trailblazer – all offer bonus points posted to the member account each month. As the price increases the points do, too, and additional program benefits are added. Unlike most points purchasing programs, however, these are more expensive the more you buy. It is unlikely the increased benefits will offset the higher costs for most travelers.
A trio of subscription tiers for TrueBlue members, with varying benefits and values
The Points Traveler tier credits passengers with 1,000 points per month and is priced at $144/year. Given the typical redemption value of TrueBlue points (~1.3-1.5 cents/point) that one is about break-even, though you’re betting on redemption value not changing. That’s risky in any scenario and some signals from JetBlue show a shift towards lower values, depending on the redemption.
At the Points Adventurer tier members get 2,000 points per month for $360/year. This tier also earns an extra 2 points per dollar on base airfare purchases, stacked with any other bonuses (Mosaic status, fare type, credit card). To make up the missing value on the higher points price a traveler will need to earn about 4,000 bonus points via that kicker, which means spending about $2,000 in base fares during the year. If you’re earning Mosaic 1 naturally through flying then this one also approaches break-even.
The Points Trailblazer tier costs $750/year to purchase 2,500 points/month. That valuation leaves buyers about $350 short of break-even. But the tier also comes with 3 points/dollar bonus on paid tickets and a 10% rebate on all award travel. Like the bonus points, the award rebate is stackable if you also have the right co-brand credit card. Making up the difference would be about $9,000 in spend (27k bonus points worth ~$350-400) or 270,000 points redeemed during a year. And both benefits apply, so a bit from column A and a bit from column B would work.
That’s a serious commitment to get value from the program, and it is easy to see why JetBlue likes this approach. Customers who buy in for a year are more likely to spend money with the carrier trying to get that value back.
Adding Redemption for Ancillary Products
JetBlue also announced that points can now be redeemed for several ancillary fee items, including:
Seat assignments, including EvenMore, Core Preferred and Extra Legroom upgrades
First and second checked bags (which the airline just raised prices on)
Points are worth just a penny when applied to a seat or pet fee, less than they typically are worth for travel bookings
Given that the lower valuation has been around a while it is not clear that JetBlue will shift its default flight rewards towards the lower rate. But there is something of a precedent for such. And should that happen during the subscription period travelers will have no real recourse.
The Enduring Value of Subscriptions
Airline subscriptions are not new. Whether it is the Frontier Airlines Discount Den or Spirit Airlines Saver$ Club or the short-lived Delta SkyMiles Select or United’s Economy Plus subscription or Alaska Access or others, airlines love these programs. They deliver up-front revenue, plus potential for incremental additional bookings as consumers follow their “sunk cost” to make sure they can take advantage of the “investment” they made in the program.
But most travelers also have insufficient visibility into the future year of travel to ensure the annual commitment is a smart spend. Given that airlines have full control over the programs and how consumers might be able to extract that value, it is challenging to justify on a strict fiscal basis.
But these are loyalty programs, and they depend on consumers acting irrationally. So I suspect Points on Repeat will sell just fine.
*The Cash + Points redemption also changed significantly in recent weeks. It is still available, but only if passengers have fewer points than the total booking requires. They cannot choose to mix-and-match if they have sufficient points for the full booking.
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Seth Miller has over a decade of experience covering the airline industry. With a strong focus on passenger experience, Seth also has deep knowledge of inflight connectivity and loyalty programs. He is widely respected as an unbiased commentator on the aviation industry.
He is frequently consulted on innovations in passenger experience by airlines and technology providers.
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