4 easy ways airlines can improve loyalty programs in a post-pandemic 2021
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There’s no doubt that airlines have had a rough 2020. Between coronavirus wreaking havoc on travel demand and business travel changing forever, airlines are in a tough spot when it comes to retaining loyal travelers. Some travelers may not need to get back in the sky as often, while others will have a delay in resuming travel.
Airlines aren’t doing themselves any favors when it comes to loyalty either.
We’ve also seen airline elite status be devalued across the board. Airlines are making travel more flexible by permanently (for now) waiving change, award redeposit and standby fees for all travelers. It’s great to see airfare become more flexible, but airlines need to improve elite status at the same time to keep elite status worthwhile.
Leisure travelers are feeling the burn too. For reasons beyond me, airlines decided that a global pandemic was the time to start devaluing airline miles — looking at you, Delta and United. And beyond waiving change fees, many global airlines haven’t done much to help the leisure traveler that’s looking to get back in the sky.
All this said, airlines need to start improving loyalty programs for both frequent flyers and occasional travelers. Otherwise, customers will disengage with their airline of choice and either switch to another airline or — in the case of leisure travelers — stop caring about airline loyalty altogether.
Let’s look at how airlines can improve loyalty programs to retain current customers and bring new ones onboard.
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Introduce more lucrative earning promotions
Here’s an easy way to get stir up demand: offer more promotions.
Hotels have done a great job of this. For example, Hyatt credit cardmembers now earn bonus points on all their stays. Marriott Bonvoy members can earn 2,000 bonus points per Courtyard stay. Likewise, Hilton offers double points on all paid stays through the end of the year — an excellent bonus for those on the road.
Airlines, however, haven’t offered many worthwhile bonuses thus far. American gave all members a “gift” earlier in December, but it was either a negligible amount of miles or another hard-to-use benefit. Further, United is offering bonus Premier Qualifying Points to all members on their first three flights of 2021, but this doesn’t do much for the leisure traveler who wouldn’t earn status regardless.
I’d like to see airlines start to offer similar promos that incentivize travel; think double miles on paid tickets and reduced mileage awards that are actually useful. This encourages people to book travel with a single airline instead of just booking with whoever’s cheapest, stirring up demand and creating more engaged travelers.
I think this is very likely to happen in 2021 — especially once the coronavirus vaccine rolls out. People will be eager to get back on the road, and competition will be high. Offering lucrative promotions keeps travelers wanting to book with a single airline to earn their next big award ticket.
Stop devaluing airline miles
Is this really too much to ask?
Delta and United both massively devalued their miles in 2020, which was a huge blow to their loyal travelers. Now these members are not only stuck at home, but they’re left with less valuable miles when travel resumes.
This is not a good look, airlines — and it’s not good for your bottom line either.
After all, when miles become worth so little that it takes an exorbitant amount of miles to use them for anything, people stop caring about them. This means less spending on cobranded credit cards, fewer transfers from transferable credit cards and fewer people crediting flights to your airline.
Loyalty programs have become an increasingly important revenue stream for airlines over the past few years. This is especially important when there’s low travel demand — like right now — since the supplemental income isn’t necessarily dependent on people traveling. For example, people don’t stop spending on credit cards because they’re not able to fly.
On the other hand, I understand why these devaluations are happening. Airlines need to reduce liabilities, and airline miles are indeed a huge liability. They eventually need to be paid out in the form of a mostly-free flight.
However, most travelers aren’t using their miles right now, so I don’t see the point in devaluing miles. Travelers will likely go back to redeeming miles once travel demand picks back up and airlines are in a better financial place. So beyond keeping shareholders happy, it doesn’t make sense to me.
I’d like to see airlines stop their constant devaluations for the time being and — instead — focus on making miles more valuable.
For customers, this keeps their hard-earned miles valuable and ready for redemption in a post-pandemic world. For airlines, this keeps those customers engaged and focused on earning miles with their favorite loyalty program. Airlines will badly need these customers and their loyalty going forward.
Make it easier to earn miles when not traveling
While waiting for travel to resume, airlines should focus on making it easier to earn miles from home.
One interesting way of doing this could be with cross-brand partnerships.
Say, United and Strava — a popular workout-tracking app — partnered. Under this partnership, you’d earn a United mile for every mile you ran or biked with Strava. This creates an engaging experience that reminds Strava users that, yes, their airline miles still exist. Likewise, it gets points and miles people on their bikes — a win-win for both brands.
On the other hand, an airline could partner with a coffee chain like Dunkin Donuts or Starbucks. With this partnership, a traveler would earn miles for every cup of coffee purchased. Again, this brings the airline program into the limelight, helps customers earn miles and brings more business to the coffee chain.
These types of promotions are great for customer acquisition too. The airline’s loyalty program gets a ton of publicity and drives signups. There are plenty of travelers who don’t earn miles, but they probably drink coffee. Everyday promotions like this could get people engaged with the program.
In the future, these people will be more likely to fly with the airline in question or apply for a cobranded credit card.
That said, the examples here are only, well, examples. I’d love to see airlines have fun with this and create innovative new mileage earning promotions that don’t require traveling or a credit card. It’d open the points and miles world up to a huge new audience and help existing points and miles fans earn extra miles.
Create a better travel experience for elites
Elite members are getting the short end of the stick in 2021.
Airlines have effectively devalued airline status across the board when making travel more flexible for all travelers. Likewise, premium airfare is cheaper and award space is plentiful, so the benefit of a free upgrade is less valuable than it was pre-pandemic.
Airlines should compensate elites for these lost and devalued benefits when travel returns. Some airlines have started doing this already — for example, American recently beefed up benefits for Platinum Pro and Executive Platinum members. At the same time, however, we haven’t seen this become an industry trend.
I wrote an article dedicated to how airlines can improve elite status programs in 2021 earlier in the year. Some of the ideas listed there include increasing confirmed upgrade certificates, bettering partnerships with hotel and rental car companies and rolling over 2020 elite qualifying miles.
That said, I’ve started to see this through a different lens. Instead of adding luxurious benefits to elite status, I think airlines can gain a lot from offering their most loyal travelers a consistently better travel experience, even if their first class upgrade doesn’t clear.
Doing this is simple. Give elites domestic lounge access, extra legroom seating, free premium beverages, complimentary in-flight Wi-Fi and the ability to move flights more than 24 hours without paying a fare difference.
This consistent experience makes elites want to fly with their airline of choice. I’d actually pay a premium to have access to these benefits, especially since I’d otherwise have to pay for them on another airline. And while preferred seating is already included with most status tiers, adding drinks, Wi-Fi and lounge access makes it far more intriguing.
I’d love to see airlines run with this and dream up other interesting additions that enhance the airport and in-flight experience.
2021 will be an interesting year for airline loyalty. Airlines will need to adapt their programs for lower travel demand while also making them more attractive when travel does resume. Not doing this could lead to disengagement, which would be detrimental as loyalty programs become a more important revenue stream for airliners.
I think that making incremental improvements to mileage currencies, adding more at-home earning methods and giving elite new benefits will be a great way to keep travelers engaged. In turn, these travelers will be more likely to return to the airline once the pandemic subsides and travel resumes in full force.
Regardless of what happens, I’m excited to see each airline’s approach to a post-pandemic loyalty world.
Feature photo by Philip Pilosian/Shutterstock
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