Yesterday on Bloomburg TV Brian Kelly, The Points Guy, said he expects what is next will be the “third leg of the triangle” that is the next step of the airlines moving to 100% REV based rewards. That means you would have to, for example, spend 500,000 points to pay for a $5,000 business class ticket to Europe.
Not just Brian, but Gary from View from the Wing here at BoardingArea talks about how bad a choice the airlines are making saying:
“It’s a move away from programs’ roots, rather than a return to them. MileagePlus and Skymiles are getting out of the airline business, even if they don’t admit it.”
I agree with both of these respected travel experts. I agree that the airlines are so focused on this course that over the next few – YEARS – we will see Delta, and others, make the jump to a simple program of a 1 cent per mile redemption model. Then, you will have to pay full retail price to fly business whatever that price happens to be. I also agree that the major airlines’ bean counters don’t fully understand what this choice will cost them (Southwest does not count – they are a Greyhound bus in the sky).
Why will it cost them? For years people, I mean the masses not us points enthusiasts, have put EVERYTHING on their points cards – say a Delta AMEX card (any of the three “Airline Travel Cards“). They will not care that they can get an extra point or two from another card but will just buy buy buy to save up for that great business class seat to Europe. It may have taken them YEARS, but for that one trip it will be worth it. I mean when the coach flying experience is the same as a visit to the DMV, as CNBC suggests people think, why would ANYONE ever drive spending to their Delta AMEX cards EVER again. This move will be the last straw for the masses.
What will I do that day? My “loyalty” to Delta is over that day. If Delta makes me pay 500,000 points to fly to Sweden to see my mom in business I will NOT pay it. No way no how. I will be freelance at that point. I will still fly business class but I will shop for the cheapest business price ticket on any airline that has a decent seat and then pay with my Barclay’s Arrival card to pay myself back and earn on whatever program I happen to fly on that trip (crediting to the best alliance partner in that program).
I talked about loyalty before and it really is true. The airlines have marketed the dream of first class travel if you can just save enough points – not for much longer!- René
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