Airline’s Shift to Revenue Models May Have Unintentionally Made FFP's More Socially Responsible
We are nearly two months into a new year and the season of Mileage Runs is behind us. It’s a good moment to pause and take a fresh look at this peculiar behavior and the role the airlines play in encouraging and facilitating the habit. Most importantly, it’s time to take a look at the future of Frequent Flyer Programs (FFP) and the social standing of those frequent travelers who invest in achieving elite status levels with the airlines.
To make sure we share understand the topic, a mileage run is a flight (or combination of flights) that is taken solely for the purpose of earning frequent flyer miles or elite status with an airline. There’s no implied intent to get to a specific destination or explore a new place. In fact, you may never exit the destination airport before you turn around and board the same plane to go home.
I’ve been a regular business traveler for way too long and have been among many of my peers who have chased elite status at the airlines we use most often. Why do it? No matter what your friends and family may think, business travel is not as glamorous as you might expect. The experience can take you to all corners of the globe and create great memories, but one could argue you’d get that same result from joining any branch of the military! The truth is that the business travel experience can be miserable at times, with flight delays, crowded airplanes and increasingly unpredictable and unruly behaviors in the cabin during flights. If you are going to submit to the pain, you might as well to try and earn a few perks along the way.
Should You Go on a Mileage Run?
Being thoughtful about which airline you choose to fly and the airline cobrand credit card you use are table-stakes to achieving elite status. But when you reach the end of a calendar year and realize you are just a bit short of the tier status you hope to achieve, you have a decision to make. For decades, the way to skin the cat was to book flights that don’t have any other purpose than to earn you the miles you need to reach the next tier – the Mileage Run.
There are a few dynamics at work here to make this happen. You must have the time, money, and willpower to book flights and complete the trip. Then you can consider alternatives. Should you pay to travel and waste a precious few days of your time – or even one day – or should you purchase miles from the airline to close the gap? Generally, I have found the price to purchase miles from the major airlines is much higher than just purchasing the ticket and earning the same number of miles. However, you’ve got to be convinced that the savings of earning miles by flying versus purchasing them online and tuning into Netflix is worth your time. What could you do with 24 hours?
The final step in your decision making might be to examine your conscience. What do I say? Well, consider that research published by UK-based climate charity Possible found that a small percentage of Frequent Flyers are driving obscene levels of global emissions. Another report found that about 1% of the world population is responsible for 50% of emissions from all air travel. The Possible report put forth the idea that FFP’s encourage more carbon emissions by “rewarding flyers disproportionately more for long, complex flights” in other words the type of flights that are the essence of the Mileage Run. More research exists on the topic and you can read it here.
With more awareness given to these research findings, calls are being made to stop the sale of private jets and to cease advertising for flights. If this continues, buying an airline ticket will soon be in the same category as buying a pack of cigarettes or a handle of Tito’s. Each item will come with a disclaimer that we are harming both ourselves and the environment.
How can FFP’s Become More Socially Responsible?
According to BlueSkyModel, the amount of greenhouse gases, including carbon dioxide (CO2), that a plane puts off per flight can vary greatly by the type of plane, its route, weather conditions, and more. Taking an average of the carbon impact of all air travel, they found that a commercial flight emits 53.3 pounds of carbon dioxide (CO2) per mile. This means that a 2,500-mile cross-country flight from New York to Los Angeles would emit 133,250 pounds of CO2 emissions. According to Climate Accelerator, if you choose to fly business class, you might be producing 3 times more CO2 emissions per passenger than flying on economy class. Flying first class produces 9 times more.
Frequent flyers can offset their carbon emissions by purchasing carbon offset credits and over 30 IATA member airlines offer options to purchase carbon credits. A carbon offset is typically priced per ton and the cost can range greatly from less than $1 per ton to over $50 per ton. For example, the cost of offsetting 2,001 to 4,000 miles of air travel might cost $16, while a long-haul flight of 10,001 to 12,000 miles would set you back $48.
The cost of flying with a totally clear conscience can get expensive and factors into why Mileage Runs are becoming obsolete. For marketing executives at the airlines and Loyalty Marketing professionals overall, we should be giving thought to the perceived environmental damage created by allowing, even encouraging, Mileage Runs and seek to offset this threat, real or perceived, through updates to the FFP’s we design, operate, and support.
How to Create More Sustainable Loyalty Programs
Brian Almeida, CEO Strategic Caravan & CLMP™, urges that airlines and in fact all brands proactively address these issues to improve loyalty program attractiveness for younger generations. In a recent interview, he said “In today's world of climate consciousness and environment protection, the customer who consumes too much is seen as doing damage to the environment and is anathema to the socially conscious next generation. Loyalty programs and in particular FFPs need to recognize this emerging trend and design to ensure its top tier (by value) still remains the aspiration for their best customers and not seen as a group of inconsiderate consumerists.”
Brian offers practical suggestions to address the issue, saying “simple design tweaks can change behaviour and be the trend setter for programs, this can be both on the earnings as well as redemption side. Members can be incentivized for traveling lite, paperless travel, low carbon routing, opt for plastic free consumption, exchanging old products, as well as offered options to redeem points or miles to donate to local charities and support environmental issues, plant a tree, promote plastic free consumption, or uplift a lesser privileged child. It’s time to re-position platinum and black tiers as human friendly tiers of concerned humans rather than be seen as consumerists depleting our ozone layers.”
Could Credit Cards Save the Planet?
Over recent years, major airlines around the world have been shifting to a revenue based frequent flyer model from one that assigns value by miles flown. The revenue model means that airlines are rewarding customers based on the amount of spend they put through their cobrand credit card as an alternative to simply racking up miles flown.
The changes made by the airlines have introduced a serendipitous solution to the social hangover created by the Mileage Run. In fact, anyone who in the future posts online and brags about their cagey Mileage Run that earned them an elite tier status may be greeted with derision from their followers and friends. Gaming FFP rules to achieve elite status in the future will happen through more environmentally friendly means. We will see people delaying, for example, a major household purchase until December, just in case that added spend on the cobrand card could vault them over the threshold to an elite tier.
The airlines have made changes to their FFP structures recently that have been met with heavy criticism from their traveling customers. Maybe it is time to spin the story that a revenue-based model is more environmentally friendly than one based on buying a seat and burning fuel.
Whether you agree with forecasts of climate change or not, the issue will remain in the public eye for the foreseeable future, and it is wise for retail brands of all types to consider how they will manage their business to contribute to a solution. Loyalty programs are the home of trusted communication with frequent customers. Shouldn’t brands communicate their concerns and propose solutions through the medium of the Loyalty Program and continue to cement brand “fandom” in the process.
That seems like a sustainable strategy to me.
