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.