US airlines are missing a crucial opportunity to engage with loyal flyers
Airline loyalty programs are massive businesses in and of themselves. Just look at how much money airlines were able to raise from banks by pre-selling millions of points.
In light of the coronavirus pandemic, travel's been halted and airlines are bleeding cash. With much of the world at home, the major U.S. carriers have extended elite status and validity periods for many other perks. And that's about all they've done with their loyalty programs, except for some stealthy changes over the past two weeks (looking at you, American and United).
While these sweeping extensions certainly bought some short-term goodwill with frequent flyers, airlines are missing out on a really big opportunity.
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What's the opportunity?
While it’s great that the big 3 extended elite status, they generally haven’t done much thinking outside the box to build loyalty while we're on our couches.
Loyalty programs are all about rewards and recognition — the former referring to earning and burning miles and the latter about how you're treated as a valued passenger. Since the outset of the pandemic, the U.S. carriers have basically solely focused on the recognition component.
Related: Airlines and hotels, pay attention to Starbucks' loyalty strategy during the pandemic
And even so, elite status extensions only help those who were loyal last year. What about using the allure of elite status to garner incremental business from non-elites who can't travel right now?
To be fair, American and United launched promotions as part of their status extension announcements, including the ability to earn Million Miler status through cobranded credit card spend and a fast-track to Premier status from cobranded spend. But these limited promotions are only scratching the surface of what the airlines should be doing.
Related: Spend on American cards for Million Miler status
In fact, while JetBlue was the first airline to begin waiving change and cancellation fees when the coronavirus came stateside, we haven't heard a peep from the carrier about extending Mosaic status or any other TrueBlue promotions while we're at home.
Loyalty programs foster engagement and stimulate business. With planes and passengers grounded for the foreseeable future, carriers should stay relevant by launching exceptional promotions, designing challenges and initiating shortcuts to elite status.
How can airlines stay relevant?
Airlines should think about reward and recognition as they set out to stimulate incremental business while we're under stay-at-home or shelter-in-place orders.
Though now's not the time to travel, there's nothing stopping people from planning for future trips. Since demand most likely won't recover quickly, airlines should be loading tons of saver award availability and launching limited-time sales for premium cabins now. This way, customers can use their miles to score great redemptions, further building the value proposition of earning miles with a given program.
Carriers should also get as creative as possible. What if American came out with a multi-continent, Oneworld partner explorer award or some other inventive opportunity to use your points? The amount of coverage and interest alone would likely be a short term win for 2020. And if it was good enough, it'd even garner business.
Related: The 6 best airline award chart sweet spots
Speaking of earning miles, why aren't we now seeing more discounts on purchased miles? It's a great way to raise cash, while also rewarding customers. Similarly, as travel slowly picks up again, airlines should work with the transferable points currencies to offer transfer bonuses. It'll help stimulate business and get people thinking about redeeming their points again.
In terms of recognition, everyone loves the allure of elite status. Who doesn't want free upgrades and extra-legroom seating? Aside from just extending elite status and making it easier to earn elite status in 2020 through flying, carriers should make it easier to earn status while you're sitting on your couch.
That can take multiple forms: whether it's a cobranded credit card promotion or simply the ability to earn status through transferring points into a given frequent flyer program, the appeal of elite status will most likely generate more business. Although United is already offering a similar promotion, it doesn't include top-tier Premier 1K. Now's the perfect time to lift that cap.
Another great way to recognize elites is by allowing current elites to gift status to friends and family. American Airlines once offered this promotion whereby its invite-only, ConciergeKey members could nominate someone for Executive Platinum status. This year, if elites end up requalifying for status, they shouldn't just be given an additional set of upgrades. In addition, carriers should consider adding the ability for elites to gift status to loved ones.
Example from another airline doing it well
As mentioned American and United have already launched some lucrative promotions, but there's more to be done.
U.S. carriers should look to our neighbor up north, Air Canada, as a case study. Throughout the pandemic, Air Canada has added promotions every few weeks, all under its "travel at home" campaign. I've heard from countless readers that this program is really buying their loyalty.
Related: Why I’m more excited than ever about Air Canada’s new loyalty program
It all started on April 6, when the Montreal-based carrier announced sweeping elite status extensions. As part of the offer, elites who requalify for elite status in 2020 can share elite status with a friend or family member for free.
In the announcement, the carrier also unveiled a promotion where it awarded one elite qualifying mile for every five Aeroplan miles that a member donated to select charities by April 30, 2020.
Then the airline launched a program where you can earn or boost your status from home without flying. And finally, the carrier sold miles at a rate that makes it actually worthwhile to buy now and save for later.
Bottom line
Loyalty programs are all about reward and recognition. Though most of the world is grounded, that doesn't mean airlines can't use the time to stay relevant in the minds of their loyal members.
U.S. carriers have a ways to go in driving engagement while people are home. Sure, it’s great that they extended status and bought a ton of goodwill in the process, but there's lots more to do.
Here's to hoping that we see many more promotions and challenges throughout the rest of the year.
All photos by the author.
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| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
| 2X | Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
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Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
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Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.
Rewards Rate
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
| 2X | Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Intro Offer
You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
$325Recommended Credit
Credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.Excellent to Good
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.