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Sunday, March 19, 2006

Frequent flyers frequently disappoint

Frequent Flyer programs are a waste of money. There, I said it.

For those of you who like Frequent Flyers, I promise there’s a useful comparison up ahead, so keep reading. For those who loathe Frequent Flyers, just sit back, enjoy the rant and an oxygen mask will drop down if there is an interruption to the air supply.

I’m sorry, but anything for which you have to pay fees, that restricts your choice of flights and seats to whatever late-night, low-season tickets that it suits the airline to offer you, just isn’t worth it.

Why pay a fee to get the crumbs off the table? And then pay again just to get a flight that actually suits you?

If this is how airlines treat their most loyal customers, heaven help the rest of us.

In 10 years as a semi-regular flyer, I’ve never joined a program – I’ve always just gone with the cheapest fare I could get at a time that suited me. In 10 years, I’ve saved $2500 just by choosing the cheapest available fare instead of one connected with a Frequent Flyer. And I’ve done it all without flying Aeroflot.

I’ve never been stuck with flying an airline who’s service has gone downhill just because I’m in their program. When I look at the timetabling contortions my friends have put up with, the annual fees they’ve paid and the all the bizarre things they’ve bought at overpriced supermarkets just to get Fly Buys, I can tell you, I’m way ahead.

But fortunately, there’s now a frequent flyer in Australia that costs you nothing and lets you choose any seat you like, on any flight. So The Bargain Queen has persuaded me to take another look at Virgin’s Velocity program.

But first, which sounds like the better deal to you? Get 17% off your next airfare, or earn 6 frequent flyer points for every dollar you spend? Believe it or not, there’s no difference!

How do we know? I simply logged into Velocity with The Bargain Queen’s code and checked how many points it cost for the cheapest seat on a Sydney – Melbourne flight. Then I logged into Virgin’s non-Velocity web page to check the dollar cost of the cheapest seat on the exact same flight. The lowest-cost in points was 7,000 ; the fare was worth $105.00 . So, you’d have to spend $630.00 with Virgin to claim that $105.00 seat. It’s a straight 6-to-1 deal, or roughly 17% off.

Now, if you went into a retail shop and they offered you 17% off, you’d be pretty happy, right? But if they told you that they’ll only give you the 17% discount after you’ve bought 6 things in the shop, you’d tell them to go to hell, wouldn’t you?

So why do people accept deals from airlines that they wouldn’t accept from anyone else? Beats me.

Let me put it this way. Frequent Flyers were invented for the benefit of the airline, not you, the flyer. It was a way to get the airline to fill its unused seats. That’s why all those other programs restrict the seats available to only the ones they can’t otherwise sell. All that warm-and-fluffy stuff about how much they wanted to reward you for your loyalty was so much marketing guff. All they ever wanted was to foist their unpopular seats onto you while making you feel good. Sorry, but that's the truth, and I've heard it from senior marketing executives in 3 different and very prestigeous airlines.

Of course, it worked a treat, in the early days, the airline with the best Frequent Flyer programs attracted lots of new customers.

But ironically, now that all the airlines have programs, there’s really no difference. OK, it’s great that Virgin will let you choose any seat on any flight, but it’s only a matter of time before Qantas follows suit.

If an airline really wanted to attract new customers now, the best thing they could do is scrap their Frequent Flyer program. The way Velocity is priced, it suggests that they could make all their airfares 17% cheaper overnight, just by getting rid of the Frequent Flyer.

Makes you think, doesn’t it?

PS - The opinions expressed in this post are not those of The Bargain Queen, they are Mr Bargain Queen speaking in a private capacity. From cattle class. In the centre seat.

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1 Comments:

  • At 9:47 am, Blogger kt said…

    If you fly for work it is an ENTIRELY different story. Someone else pays for the flights, you get the points.

    By the way, have a look at my slowly being recreated site, lost.net.au. Any comments or feedback would be appreciated :)

     

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