Are Airlines Leveraging Loyalty Programs To Change Corporate Buyers Behaviour?

Recently, United announced a change to its frequent flyer program, which they called United Plus. The concept of the change is simple, travellers now will be rewarded miles based on the dollar value of their tickets, rather than the distance they travel. This comes on the heels of a similar announcement by Delta. Other airlines are expected to join the band wagon soon.

This change signals a new round of friction between corporate buyers and the airlines. In a love - hate relationship between the two sides, the dust hasn't yet settled from the fuel surcharges, baggage fees, air fare increases, and many other contentious subjects, here comes a new element that could cause change in the behaviour of corporate buyers. 

The corporate buyer, who is buying the tickets, has had no incentive to buy more expensive tickets, until now, as the more expensive the ticket, the more miles the buyer will obtain. Surely, the buyer will personally gain from the increase in the amount of miles they are accruing, and so do the airlines as they will benefit from the increase in revenue. 

The only outsider to this win-win situation is the travel or procurement manager at the corporation paying for the travel. They are faced with an invisible hand influencing the behaviour of their buyers when they are making buy decisions, which could undermine their efforts to optimize their travel programs, and achieve their savings goals.

Both airlines and travel managers need to discuss the shift transparently. It is in the airlines best interest to educate and explain to travel managers the value of the change, and the implications it will have with respect to their travel programs. Travel managers should be part of the win-win situation. They need to understand how this shift will help them with their optimization goals, and if not, how to use tools at their disposal to strategically combat any buying behaviour shift, without putting their partnerships with airlines, their corporate program goals, and their own travellers's satisfaction at risk. 

This loyalty program change will prove to be a major shift in the industry, and corporate travel programs must adapt accordingly.