“No Fly, No Buy United” Day is Today — and the First Thursday of Every Month Thereafter
T o protest the changes recently announced to the United Airlines MileagePlus frequent flier loyalty program expected to be in effect as of March 1, 2015, today — Thursday, December 4, 2014 — is “No Fly, No Buy United” Day, according to this Internet web site known as untied.com…
…and the first Thursday of every month thereafter will also be proclaimed “No Fly, No Buy United” Day.
The following is an open letter to the senior executives of United Airlines:
An open letter to:
Jeff Smisek, President and Chief Executive Officer
Thomas O’Toole, Senior Vice President, Marketing and Loyalty, and President, MileagePlus
James Compton, Vice Chairman and Chief Revenue Officer
Jimmy Samartzis, Senior Vice President, Customer Experience
Re “No Fly, No Buy United”, Thursday, December 4 and first Thursday of every month
A substantial number of long-term MileagePlus members adamantly oppose your recent decision to limit the ability of the majority of passengers to earn frequent-flier rewards.
After years of an established formula in which passengers earn credit based on actual miles flown, the change to a ticket-price-based rewards system is tantamount to a bait-and-switch of the MileagePlus loyalty program. As you are surely aware, while this encourages business travellers to purchase more expensive tickets, the change makes it harder to earn rewards, not just for budget-conscious passengers, but even for Premier members. Did you think we wouldn’t notice?
Following other clawbacks of benefits from your frequent fliers, such as reduced baggage allowance, this is yet another example of your greed taking precedence over building passenger loyalty and improving sadly needed customer service across the board.
We understand the importance of short-term profit and stock value, but coming on the heels of your $1.1B third-quarter profit, is this the way you thank those whose loyalty made your profitability possible? Rather than shamelessly copy-paste the Delta model, you might consider following the example of another of your major competitors, American Airlines, which recently announced that it will continue with its miles-based loyalty program when it merges with US Airways. We expect, and demand, the same from United.Since you apparently see us as dollar signs rather than customers, we have decided on a protest action. Starting December 4, we’re designating the first Thursday of every month a “no-fly, no-buy United” day. We’re calling on MileagePlus members to participate by not flying with United or purchasing any United services on this day.
We’re doing this in the hopes that you will listen, either by reversing your planned changes, or giving passengers the choice between the existing MileagePlus program and the new revenue-based one. Let us know when you’re ready to treat your passengers with a little more respect and we’ll be happy to return.
Your dissatisfied customers
I say good luck with that one — and here are some of the reasons why:
- There are no “likes” at the official Facebook Internet web site of this protest movement — at least, not at the time this article was posted — which was launched back on Saturday, November 8, 2014, indicating that there is no support
- Earlier this week, a press release announced that United Airlines was named 2014 Airline of the Year by Global Traveler magazine
- Most importantly, United Airlines reported on Thursday, October 23, 2014 its highest-ever quarterly profit for the third-quarter of 2014 with a net income of $1.1 billion — or $2.75 per diluted share, excluding $151 million of special items — and an increase of 99 percent year-over-year; but when including special items, United Airlines reported third-quarter 2014 net income of $924 million, or $2.37 per diluted share
Members of the MileagePlus frequent flier loyalty program can earn anywhere from five to as many as eleven MileagePlus miles per United States dollar paid for the base airfare and surcharges imposed by the airline — similar changes occurred with the SkyMiles frequent flier loyalty program by Delta Air Lines as announced on February 26, 2014 — depending on your Premier elite status level:
|MileagePlus Program Medallion Elite Status Level
||MileagePlus Miles Per United States Dollar Earned
||MileagePlus Miles Earned Per Dollar With Credit Card on United Spend
||Total MileagePlus Miles Per United States Dollar Earned
|General Member||Five MileagePlus Miles||Plus Two MileagePlus Miles
||Seven MileagePlus Miles
|Premier Silver||Seven MileagePlus Miles||Plus Two MileagePlus Miles||Nine MileagePlus Miles|
|Premier Gold||Eight MileagePlus Miles||Plus Two MileagePlus Miles
||Ten MileagePlus Miles
|Premier Platinum||Nine MileagePlus Miles||Plus Two MileagePlus Miles||Eleven MileagePlus Miles|
|Premier 1K||Eleven MileagePlus Miles||Plus Two MileagePlus Miles
||Thirteen MileagePlus Miles
Does anyone really believe that any protest movement would actually be effective? Members of Milepoint do not believe so — and neither do I. In this article posted on April 12, 2013, I listed the reasons why a protest movement such as SaveSkyMiles — which was launched in 2000 by four FlyerTalk members and gained significant momentum approximately three years later — would not be successful this time around, in no particular order:
- Delta Air Lines is financially stronger today than it was in 2003. Delta Air Lines pre-tax income for the September 2014 quarter was $1.6 billion excluding special items — and ancillary fees are part of the reason why Delta Air Lines and competitors are performing better financially than they did almost 12 years ago. In fact, in April of 2003, Delta Air Lines was so financially strapped that it was asking its pilots to reduce their pay by approximately 33 percent while its executives were securing their pensions and increasing compensation as the airline was reportedly struggling to survive.
- Delta Air Lines has different management. Richard Anderson — the current chief executive officer of Delta Air Lines — has almost 30 years of experience in commercial aviation, which includes executive-level positions at Continental Airlines and Northwest Airlines, where he eventually became its chief executive officer. Compare that to Leo Mullin — the chief executive officer of Delta Air Lines from August of 1997 to January 1, 2004 — who had virtually no experience in commercial aviation other than serving as chairman of the International Air Transport Association, as the bulk of his experience and background was in banking and finance. The very mention of his name is still reviled to this day by both passengers and employees of Delta Air Lines, as many say he drove Delta Air Lines towards bankruptcy and had no business being involved in commercial aviation — let alone be chief executive officer of a major airline.
- Too many customers chasing too few benefits. Genuinely high-value customers are expecting to enjoy more benefits as “the herds thin out” in terms of elite status as a result of the implementation of all of the announced “enhancements.” Those high-value customers tend to believe that they are being denied the benefits which they truly deserve, as the demand for those benefits greatly outweigh the supply due to a number of factors — seemingly more so today than in 2003. The simple concept of supply and demand dictates that if there is too much demand for too little supply, the company can introduce and raise prices with little attrition in terms of customer base. Think about it: when was the last time prices for products or services were reduced as demand significantly exceeded supply? This, of course, is part of the impetus which leads to…
- Monetized benefits and ancillary fees. If you are not a high-value customer and want to enjoy a benefit, Delta Air Lines is betting that you will pay for it — and experience suggests that the airline is correct. Delta Air Lines earned 814 million dollars in revenue from ancillary fees alone in the third quarter of 2011. As much as passengers may not like the benefits and amenities split out — or diminished or even eliminated altogether — from what used to be included in the price of the airfare back in 2003, Delta Air Lines would be foolish to stop now. In fact, the airline appears to be continuing to find new ways to profit from ancillary revenue. However, I would tend to agree with you if you believe that Delta Air Lines could improve how it implements these “enhancements.”
- Affinity credit cards. If you cannot earn and enjoy your benefits and amenities the traditional way — by flying many thousands of miles — you might be more tempted to apply for an affinity credit card. Just pay an annual fee of $450.00 for one of those affinity cards — this one in particular did not exist in 2003 — and earn yourself 10,000 Medallion Qualification Miles after your first purchase and earn up to 30,000 Medallion Qualification Miles and 30,000 bonus SkyMiles each calendar year. You can earn elite status before you know it — and without ever stepping aboard an airplane. Affinity credit cards are another revenue generator for Delta Air Lines.
- Diversification of business. In addition to its cargo business, did you know that Delta Air Lines also owns an employment agency, a credit union, and a vacation provider service, amongst businesses other than passenger service as a commercial airline? Moreover, the Technical Operations Center is world renowned in that it services and repairs the aircraft of other airlines and the United States federal government in addition to the ones owned by Delta Air Lines — and let us not forget about the investment by Delta Air Lines in an oil refinery in Pennsylvania, which was purchased in 2012 to save money on fuel. Whether or not these businesses significantly contribute to the bottom line, diversification helps to not be as dependent on your main business for revenue — leading to having more control over what policies you decide to implement, even if that increased control is only marginal.
- There are fewer competitors in domestic commercial aviation in the United States. Airlines which were operational businesses in 2003 but no longer exist today include Continental Airlines, Northwest Airlines, America West Airlines, American Trans Air, Midway Airlines, Aloha Airlines, AirTran Airways — and eventually, US Airways. Fewer airlines means less of a reason to be as competitive today as in 2003.
- …so to which competitor will you defect? With American Airlines and US Airways merged together as one company — and with United Airlines still experiencing fallout from its less-than-smooth merger with Continental Airlines despite its good fortunes as of late — is there really a better airline to patronize? Perhaps, depending on what its important to you — but what are your other options — Southwest Airlines? jetBlue Airways? Train, bus, boat or car? Not travel at all? Regardless, it seems as though Delta Air Lines is betting that you will not defect to its competitors — direct or indirect. The commercial aviation industry is shaping up to be the classic result of the forces of an oligopoly at work.
For these reasons and more, Delta Air Lines has less of an incentive and would not be under nearly as much pressure to cave into the demands of its customers, no matter how passionate — which is why I do not believe a campaign such as SaveSkyMiles would be as successful today as it was almost 12 years ago. Even the post-bankruptcy stock price per share of Delta Air Lines hit an all-time high of $47.19 this past Friday — and although it settled back to a share price of $44.75 at the close of the stock market yesterday, the stock is still up by 62.9 percent this year.
To exacerbate the conundrum of the frequent flier of today, other major airlines — such as United Airlines — enjoy at least some of the same reasons for their success as Delta Air Lines.
Please do not misunderstand me: just because I do not believe that a campaign similar to SaveSkyMiles — such as “No Fly, No Buy United” Day — will be as effective today as it was almost 12 years ago does not mean that I am suggesting that you forget about it and discourage you by not trying. I am simply arguing that the conditions which exist today — economic and otherwise — are significantly different than they were almost 12 years ago. Delta Air Lines may want your business, but let’s face it — they are not desperate for it these days like they might have been back in 2003; and the same is true for United Airlines…
The letter — which basically asked for your assistance to restore and enforce regulations and limits to “control excessive, largely unchecked market speculation and manipulation” pertaining to oil contracts which supposedly fueled a rise in oil prices per barrel — was signed by the chief executive officers of 12 domestic airlines based in the United States at that time. You were to have contacted the members of Congress who represented you, letting them know that you are joining other Americans and the airlines in a unified front to pull together as a nation “to reform the oil markets and solve this growing problem.”
So — did you do that?!? If so, do you think the airlines remember? Have they returned the favor to you for your support and efforts?
To be fair, airlines offered plenty of incentives for their customers to be loyal back then. Some would argue that the airlines “gave away the store.” Regardless, frequent fliers enjoyed the benefits, perks and amenities at that time — as well as the “mileage runs” — before they were “enhanced” to what they are today where:
- You need to redeem more frequent flier loyalty program miles for an award ticket — sometimes without advanced notice
- Qualifying for elite status is increasingly difficult
- A perception of having premium alcoholic beverages replaced by their lower-grade counterparts in airport lounges despite an increase in membership fees
- Ancillary fees seem to keep adding up — including the increase in existing fees
- Upgrades have become more scarce for a variety of reasons
- Purchasing elite qualification miles — such as announced by Delta Air Lines earlier this week — are ridiculously expensive to the point where no “blogger” here at BoardingArea even dares to recommend purchasing them; and that includes myself
Unfortunately — unless you are a frequent flier who spends a significant amount of money on airfares or an infrequent flier who spends a lot of money on ancillary fees — you most likely have become irrelevant to travel companies. You are much better off concentrating your efforts on losing your elite status, gaining your self-respect and launching your own frequent flier loyalty program than you are in organizing or joining a protest movement……or perhaps it is time to give up on earning miles, points and elite level status altogether.
Then again, I do believe things happen in cycles. Whatever “gravy train” — or airplane, I suppose — on which the commercial aviation industry may be riding will certainly not last forever. Some customers will remember the unfriendly policies implemented by the airlines and not patronize them due to a perceived lack of trust — and lack of trust can be potentially harmful to a company in a significant way.
However — as with any other company in any other industry — if you are not happy with the changes in policy, the product you experience, or the service you receive, then vote with your wallet and do not patronize United Airlines anymore. If revenue from customers is reduced significantly enough, then United Airlines might roll back one or more of the changes in policies; and if not, that means that the changes in policy are working for United Airlines, which means that they made the right decisions — even if only for the short term, but with an unknown effect on the extent of the future detriment of its customer base, if any. It is that simple…
…so which would you rather have: a struggling airline which “gives away the store”, or a strong airline which restricts benefits to all but its highest-value customers?
Whatever your answer may be, one thing is for certain: a protest movement is not the way to go. That would be little more than a waste of time. Voting with your wallet is more effective; and if enough people do so, some changes may be reversed.
2015 will be a very interesting year, as we will find out definitively whether or not the changes which are considered unfriendly to members of frequent flier loyalty programs have actually been successful for the airlines…
Photograph ©2013 by Brian Cohen.