July 1, 2004 -- So you're a small, low-fare airline who wants to compete for business travelers against the big boys. You come up with your own frequent-flyer program, but it doesn't solve the problem that United Airlines frequent fliers can go to Tokyo or Shanghai, but your guys can only get as far as Atlanta or LA. What's the solution?
Offer to buy your customers tickets on other airlines.
Low-fare veteran AirTran announced a radical new step for its Frequent Flier Program last week. Earn 32 "credits" (at 2 or 3 credits per roundtrip) and they'll go out and buy you a domestic roundtrip on any other airline. Earn 100 credits, and they'll buy you a ticket anywhere in the world, on a carrier of your choice.
Of course, these tickets are restricted, but so are all frequent-flier rewards. The "lowest advance purchase excursion fare" must be available, so forget about flying over holidays (and potentially over weekends), and make sure to ask for your tickets well in advance. You must also stay over a Saturday night, and no more than 30 days, on your reward ticket.
But alas, there's a much bigger catch that will prevent leisure travelers, and all but the most peripatetic business travelers, from taking advantage of this deal.
Okay, So Here's The Catch
Here's the catch: AirTran's flight credits vanish after a year. Major airlines' miles can last forever, as long as you keep them refreshed with some sort of activity every three years or so.
So to get your global ticket, you must fly 50 AirTran coach roundtrips or 33 AirTran business class roundtrips in one year. That's a business class roundtrip every 11 days.
There are a few ways to soften the blow, but it's still a high hurdle. Let's say you sign up for an AirTran credit card and charge $3,000 of AirTran tickets and $5,000 of other expenses on it. You'd get 4 credits for signing up, 6 for your ticket purchases and 5 for the other spending -- that's 15 credits. Let's also say you rent a car from Hertz on 10 of your many AirTran trips -- that's 5 credits. Okay, now you only need to fly a business-class roundtrip every two weeks.
Sound almost impossible? Yeah, sounds like that to us, too.
Southwest's (www.southwest.com), Independence Air's (www.flyi.com), and JetBlue's (www.jetblue.com) frequent-flier programs all work the same way. The difference is because major airlines use their frequent flier programs to draw in leisure travelers as well as business travelers. If you only fly once or twice a year, the idea of raking in a lot of miles down the road might just tip you over into flying Delta (www.delta.com) or American (www.aa.com).
But the low-fare carriers already have the leisure travelers. Their weak spot is competing for business travelers against big airlines with plush first-class cabins, worldwide networks and airport lounges. So they designed frequent-flier programs that only really work if you fly frequently.
Fortunately, the lower-level rewards in AirTran's program are much easier to get. You only need to fly four coach class roundtrips per year to get a free one-way ticket on AirTran. For a Business Class upgrade on AirTran, you only need to fly two roundtrips. When all the dust settles over the flashy other-airline awards, those are the awards you're probably going to end up taking.
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