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Frequently flummoxed flyers

Vijay Verghese, Editor, Smart Travel AsiaFor air travellers, FFP loyalty means higher fares and usurious fuel surcharges that ensure nothing is actually 'free'.


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by Vijay Verghese/ Editor

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Frequent flyer programs may punish loyalty in pursuit of higher fares

This frequent flyer is also fiction, alas

FREQUENT flyers are the darlings of the airlines. Or so travellers  are told. Thus they assiduously acquire and squirrel away miles to graduate from cattle class cowpokes to the rarefied ranks of silver soarers and then gold card godfathers with all the attendant benefits of cooing stewardesses who mispronounce their name, airport lounges, and priority bookings.

As your mother will have warned you, it is always wise to "marry the one who loves you, and not the one you love." Frequent traveller devotion to mileage accrual has been repaid increasingly by arrogance and frustrating rip-offs. Frequent flyer programs (FFP) are predicated on the "loyalty" of a passenger or the "frequency" of flying on any particular airline. Or so you might think.

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That assumption has rudely changed. Travellers are mollycoddled not for their "loyalty" but for the amount they have paid. A one-time first class passenger is therefore far more valuable than a frequent travelling economy class drudge. Think of a typical frequent traveller as a labouring swain knocking on his sweetheart's door every evening, with a single flower in hand, plucked along the way. Compare him with the man in the suit who visits just once, rolling up in a Cadillac bearing a dozen Columbian roses. Who gets the girl?

Nowadays with the bewildering array of fares available you might just as likely be offered a choice by your travel agent of a higher price with full airline miles, a lower fare with 25 percent miles and an even cheaper option with no miles, all on the same airline. Okay, you book the cheapest fare. And you book this fare several times, with the same airline. You are a loyal passenger. Right? Wrong. You are a dope. Airlines will not grant you the "sectors" flown either, ensuring there is absolutely no benefit accrued. On Hong Kong carrier Cathay Pacific for example a traveller needs 20 sectors to make the grade for silver status and 40 for gold. You can fly as much as you wish but if you are not paying the right fare you get neither the miles nor the sector. As the airline puts it, "The higher the fare class, the more Club miles and Club sectors you will be awarded." This makes a mockery of both "sector" and "loyalty".

A "free" mileage redemption ticket is neither free nor easily redeemable. A premium economy HK-Delhi roundtrip on Cathay will attract a fuel surcharge of around HK$2,400. On a Sydney-London flight the base fare, say on Qantas, may account for just 40 percent of the ticket price, the rest being fuel surcharge and taxes.

{Smacking frequent flyers on the teeth is not a winning strategy, especially at a time when pilliwinks are tightening in consumer pockets...

It's often cheaper to find another fare on a competing airline than to travel "free" in this manner.  The same goes for "free" companion fares. That ubiquitous fuel surcharge is always in the small print waiting to make a pig's breakfast of things.

To protect themselves, airline's hedge on fuel by betting on future prices and buying in bulk at a rate they consider appropriate. If fuel prices climb against that rate the airline is laughing all the way to the bank. But when an airline's fuel hedging strategy goes bust, the customer picks up the tab. Not the airline. For travellers, it's like being married to a gambler and paying a steep price every time the throw of the dice goes awry. Fuel prices have come down on several occasions but fuel surcharges have not.

Smacking frequent flyers on the teeth is not a winning strategy. Especially at a time when pilliwinks are tightening in consumer pockets and companies are cutting back on premium travel. Enter the low cost carriers.

Customers are usually willing to pay a premium for quality, based on the assumption that Product A is superior to Product B. Yet, when it comes to airlines, the product, be it a full service player or a low cost carrier (LCC), is hard to distinguish. The hardware is identical. The main factor then in pricing is the broader "service product" – booking, check-in, flight punctuality, cabin service, in-flight meals, entertainment, lounge access and so on.

Low cost does not mean low quality. The profusion of budget airlines in Asia is testament to that. Full service carriers have only themselves to blame for the mushrooming value carriers and a marked loss of passenger loyalty, especially on short-haul and medium-range routes. For budget airlines, the only ceiling to growth is the availability of landing slots at busy airports – passengers are aplenty. They have feisty crew, engaging promotions, often better food (as customers are paying for it), and a playful brand presence.

Travel agents who might have aided full service airlines in their recovery were long ago alienated with the push to eliminate the middleman. Airlines forgot the agent provides a service to the customer – and a human face. The agent is accountable. In the impersonal internet age, this is hardly small beer. Over the past three decades, travel agents of one stripe or another (including online travel agents or OTAs) have accounted for up to 70 percent of airline ticketing. The Web has not changed this math.

When airlines cut agency commissions they lost their most valuable distribution asset and freed agents to serve customers – who now pay their service fees. This key change in focus means an agent will hunt for the best fares to suit his client and offer insurance, and other add-ons in one neat package. With the travel agent now a partner in crime with customers in search of the best value, higher fares are instantly imperilled. National carriers have responded by dropping prices, greatly disadvantaging themselves in the bargain. While airlines consider new cost-saving options – even as they continue to gouge front-end travellers – the real winner is the passenger. But only if he abandons his misplaced loyalty and follows the sensible urgings of his wallet.

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