Tough love is a really relevant application to the loyalty of frequent flyer miles. There are just times when one has to reward the love with a tough statement or action. Certainly most frequent flyer programs get defensive when they see a critical review of something they have instituted, but there is hope — OK, very slight hope — that they will see it as tough love.

The tough love? I started it with this editorial from InsideFlyer magazine:

The 2008 Dumb Decision Award goes to American AAdvantage. What were they thinking in adding a $5 online award booking fee for their program back on June 21? While this gem was quietly rescinded in early October, it nonetheless stands out for a few reasons. First of all, AAdvantage became the only loyalty program I know of in the world to require some sort of fee to redeem any award. There was no opportunity to redeem an award, no matter how simple or no matter the outlet, without paying at least $5. American suggested that the fee would help them offset the technology investment the airline has been making to its Web site. Correct me if I am wrong, but isn’t the Web site paid for by those members who don’t like to book online and still to this day call a service center and are charged $20? And correct me if I am wrong, but I can’t remember AAdvantage recently introducing anything specifically to their Web site that wasn’t an offshoot from the airlines’ normal reservations Web site. The award calendar? It was launched back in March of 2007. A little late to begin paying for that wouldn’t you think? And all the AAdvantage enhancements were offshoots of price-and-scheduling tools developed for the aa.com Web site. Did this 13-week period really pay for the technology investments? It could be argued that AAdvantage redeemed nearly 850,000 awards during this period. Assuming that 73 percent of these awards were redeemed online at $5 a redemption, minus the exception for their EXP members, that would mean roughly $3 million in special fees. I’m just not getting this decision–absolutely no way to redeem a single AAdvantage award without paying for the privilege. Sorry AAdvantage, love you, but hate seeing you act this dumb.

There are two other programs that can share in this award, but as the industry leader over the years, I place more responsibility for this dumb move in the hands of AAdvantage. But, as we have seen, they did wake up and rescinded that fee for online award redemption.

Today, I’m glad to say that peer pressure and tough love is alive and congrats to Frontier EarlyReturns. They have now seen the light and yesterday announced this:

To better serve our loyal flyers Frontier is eliminating the $25 redemption fee and $75 expedite fee for award redemptions booked on or after December 15, 2008.

So, we are now down to only a single frequent flyer program here in the U.S. that still has a Dumb and Dumber type fee to redeem from your mileage account. And to clarify, I’m not talking about redeeming by contacting the service center — this is about online redemption. The reaming holdout? Glad you asked and it is none other than US Airways Dividend Miles. Here is their last holdout policy:

Online Award Processing fee – $25 continental U.S./Alaska/Canada, $35 Latin America/Caribbean, $50 Hawaii/international

Considering where we were just a month or so ago, life for the frequent flyer is better (I didn’t say best!) but as long as US Airways tries to hold down the best interest of the frequent flyer, we’ll unfortunately have to judge the industry by its dumbest competitor. So what’s it going to be Dividend Miles, Scrooge or lose?

So far much of the work that Delta and Northwest has put into the merger of the two distinct frequent flyer programs has been well above board and in fact rather excellent with the communication and the ensuing details. They have jumped to early reciprocal benefits for the two elite programs and now comes crunch time – the start of the real merger of two databases of members and miles and miles to go.

I’m predicting that early February will be when we see the start of their database merger with both programs allowing members to convert miles from one program to the other — without a transfer fee. This full mileage transferability is not as easy as it looks since to squeeze the pennies, Delta has opted to do the technology work in-house.

Basically, members will be able to move miles from WorldPerks to SkyMiles or SkyMiles to WorldPerks as often as they want, as many miles as they want until later in 2009 when the two programs are actually merged.

Now this may help some members with their mileage accrual as it will allow them to combine the two types of miles should they need them for award redemption in 2009. As well, it will perhaps help those who are wondering which is the right way to work on their elite-level status in 2009 and perhaps even more importantly, it allows members to control the merger of accounts. 

Back in 2001 when the merger of AAdvantage and Aviators (American and TWA) were going on, that program relied heavily on merging accounts by database and as a result, some members were never credited with their correct miles since some accounts were dormant and/or contained differing address matches. With this self-select method that Delta will introduce, readers of this blog will get a head start on actually making sure that all your miles end up in the correct account of your choosing. So I strongly suggest you follow along when the time comes. For instance, I have two WorldPerks accounts, one with BizPerks going strong and a regular account that came from my elite status. I have retained the two independently since i got enrollment bonuses for each account and did not want that “double” to be discovered. With this new Delta system to move miles, I think I’ll be able to do it from both accounts into SkyMiles without discovery. BUT, wait a second. The other unique advantage of this new system or pre-merger just might be if you have miles two different ways is to move them to the award chart that will best benefit you before the merger. Yes, things aren’t always the same and those SkyMiles members who have more miles than their neighbors just might find that a “false” transfer to WorldPerks might allow you a chance to save some miles come redemption time.  And of course vice-versa.

Examples: Northwest members who want to opt out of the Saturday night stay over requirement for the 25,000 mile award might transfer those to Delta where there is no Saturday night stay requirement. SkyMiles members – why pay 40,000 miles to Hawaii when you can transfer those SkyMiles to WorldPerks and go to Hawaii for only 35,000 miles. As well, why pay 60,000 miles to Europe when you can transfer those miles to northwest for the same award only paying 50,000 miles.

Get the idea? I’m on this and will be your guide to the varying differences of this merger of the miles.