Nine trillion miles is a very long distance. That's trillion with a "t." For those who don’t have a ruler handy, that's more than twice the distance between New York City and Cleveland, OH.
It is also the number of frequent flier miles held by airline travelers, according to New York Times business travel columnist Joe Sharkey, who asserts that figure represents a lot more miles than the airlines are comfortably able to redeem. For fliers trying to turn them in for reservations, this is not a surprise. The carriers have been throwing up barriers, such as limiting the number of seats. Eventually, travelers may well lose faith in their ability to redeem miles, and these miles will devalue as a currency, Sharkey claims.
Sharkey advocates that fliers should redeem their miles before the airlines pull the plugs on their programs. As Sharkey is someone who writes for consumers, his cut-your-losses perspective is appropriate if he fears the system is going to collapse.
But from a business point of view, this is a symptom of poor customer relationship management. The message "Get it now before we jerk it away from you" does not play well with folks who have done a lot of business with a single carrier just to get those miles.
With a little creative thinking, the airlines could call back some of these miles while simultaneously offering unique experiences by charging a 50% premium above the usual miles required for seats aboard theme flights.
Consider smokers, for whom a trans-continental flight without a Pall Mall is agony. What if the Federal Aviation Administration were to waive the no-smoking ban on a few flights? Don't kid yourself, a lot more has been done in the name of airline solvency. Any bets on how long it would take frequent fliers to fill that plane?
For customers who want to treat themselves and some loved ones to travel, why not set up "junket" flights to popular destinations - Orlando, Las Vegas, New York City - and offer goodie bags filled with incentives from local merchants.
Create a flight crew with extra staff, all of whom are skilled in dealing with children and send them aboard planes on child-popular routes. Have kid-friendly meals and entertainment aboard, and let parents know that for a premium of miles, they won't have to worry about businessfolk scowling at them during the entire trip.
The loss the airlines will take on these no-revenue flights can be offset by the sponsored incentives each flight could offer. Imagine being able to put a marketer's message in front of a captive audience of wealthy-enough-to-earn free-trips travelers. Now that's a viable prospect universe!
There would be a market research benefit as well: The customized flight experiences will permit valuable customers to effectively vote for the types of amenities and services they desire most. And, of course, the flights would enable the airlines to get the points liabilities off their books faster.
Once the number of outstanding miles is down to a manageable level, it might be time to take a cold, hard look at the programs. Because a rewards system that can't deliver on the rewards isn't doing anyone, whether flier or carrier, any favors.
