The airline industry has been gradually reducing fees and weeding out overpriced premium seating. Some airlines will do just about anything to acquire your business. Yet the perks are still flying high. This might surprise you: Among frequent-flier programs, miles are tied with prestige more than price tag. But hey, who am I kidding? The fact is that the easiest way to rack up the points is to spend with the best airline, carrier, and credit card — even if it costs a few bucks more than if you were to spend with that carrier’s partner.
It does however take a bit of hassle to shift. Who has the time to sit down and compare hours spent on a plane with hours spent on an ergonomic hamster wheel (is that “hockey sticks” looking like that, or is that a pigeon?!)? “Once you’ve experienced first-hand how jet lag wears on you when you’re trying to catch an international flight or land a domestic flight, you won’t want to try it again,” Gary Leff, an airline industry expert, told me. This is also where a bit of planning — checking seat assignments, weather forecasts, airport times, and other information — can be helpful.
Such planning has also led to the emergence of an industry term: blackout dates. The United MileagePlus program, for example, has strict rules about when it will grant customers access to exclusive amenities. In February, the Delta Dream Flier program introduced blackout dates related to immunizations, while Air France-KLM introduced a clause that bars participants from getting around for a certain period of time. Some cards have recently tweaked their own mileage availability as well. Gold Delta, for example, recently did away with its earning slots for flights between New York and Newark, a key area of interest for visitors from the Gulf and Asia.
Airlines still value their programs because they are the most effective way to market and communicate brands. As American Airlines tested the waters last week by offering members of its MileagePlus program one free upgrade if they paid an additional $29 each way on the MileagePlus Platinum and Gold elite member programs, the New York Times reported that passengers who rushed to purchase the upgrades flew on American to earn miles and rebook on American’s mainline flights. Apparently, it doesn’t take long for customers to develop brand loyalty.
But if the pressure is starting to come on, a handful of carriers are working on adding card perks to ensure they retain the business travelers of tomorrow.
Citi got in on the fun earlier this year when it launched the Citi/AAdvantage Bonus Miles Card, which initially gave away bonuses of 50,000 bonus miles to members enrolled in its AAdvantage program, for a fee of $125 per year. The bonus miles remained available to cardmembers who did not yet enroll in the program. When the new AAdvantage base member requirements for the 2016 bonus weren’t enough to incentivize existing members, Citi expanded its bonus miles offer. So rather than just expanding existing dollar-value bonus miles to new members, Citi now offers cardmembers the possibility of 100,000 bonus miles per year.
In February, American announced a similar program for its MileagePlus members, the American Airlines Aspire Card. American is also partnering with Capital One to market its existing AA Venture Card. Although Americans have generally favored the upside of a card with low annual fees and high yields, Capital One’s Venture Card, which was designed for a market that doesn’t need a lot of cash, is facing some stiff competition from the low-cost and solid-rating credit card companies, which want to take over as the industry standard. Cardholders of Capital One’s Venture card can earn double the miles with American’s programs, the same as by purchasing an AAdvantage ticket on an AAdvantage-program carrier. That same month, Chase followed suit with its own comparable card: the Chase Ultimate Rewards card.
Even scarier for Chase’s competitors is the fact that Chase offers its cardmembers 10,000 Chase Ultimate Rewards points per dollar on top of the 10,000 points per dollar that is offered on American’s programs. The card seems to lock the customer into a tough deal. But it also earns Chase customers both a generous card fare and miles that stand to give them an edge over competitors who need just one cardholder in order to mitigate their travel expenses. Chase will do anything to keep its customers away from its competitors.
This article originally appeared in Bloomberg.