I recently had a chance to participate in the launch of the new partnership between American Express Membership Rewards and JetBlue TrueBlue. First point: Each of these “brands” compliments each other. JetBlue TrueBlue is the exciting new airline partner that Membership Rewards can’t seem to get from American, United or Northwest. Membership Rewards, on the other hand, is the “established” loyalty bank that signals “we’ve arrived.” While the airline itself has gathered no moss in collecting the right “buzz,” its frequent flyer program is not often the topic of cocktail parties (the exception is the link below, where TrueBlue was the topic…). This partnership comes at a good time for both programs, with Membership Rewards losing Marriott Rewards as a redemption partner at the end of the year.

The question which I am still asking myself and others: Is this partnership with Membership Rewards a signal that other relationships will emerge, or is this simply something that just happens to be very good for two programs at this time?

Pack For Paradise

November 9, 2004

Delta has decided on a soft launch (read: little to no fanfare) for its latest member benefit, Mileage Transfer. Frankly, why not shout it from the hilltops? It works, and it remains a heck of a good value for SkyMiles members who need ways to manage their miles.

While SkyMiles has in place a successful program that allows members to “buy up” miles into their account for award redemption and other purposes, this mileage transfer offers the twist that the miles you acquire do not have to come from Delta – they can come from another member.

Got family SkyMiles that need to be consolidated, or a friend begging you for help with an award? Now you can transfer miles among other SkyMiles members. Why I love this: Simply, it’s far less expensive than actually buying miles from Delta. Let’s say you needed 8,000 miles. The old-fashioned way of buying miles would cost you $261.50 by the time you buy them, pay the federal excise tax and the $25 processing fee. Acquiring these same miles from another member or family member would only cost you $105. Now you see why I like this? There are a few rules involved, but nothing that can’t be worked around.

The good news for those of you who seek to pull this off right now is that the program is based on a calendar year. The limit is 10,000 miles into any one account in a calendar year. By taking full advantage of this by year’s end, you can then pump another 10,000 miles into another account in the early days of January, effectively working the calendar in your favor if you need to act fast. Use of this program should help when needing miles for upgrades or for friends, since you can add to their account without being bound by being the “travel agent” for award redemption. Use this to consolidate some of your children’s accounts. Use this at all times rather than purchasing miles (sorry, Delta!). Likely it will spawn a new series of posts on the popular flyertalk.com bulletin board for those members needing and wanting to “trade” miles.

Delta
Mileage Transfer

That’s the news; now make it work for you.

Last year I campaigned in InsideFlyer to get clarification about the ramifications of Section 145 of the Aviation and Transportation Security Act (November 19, 2001). My interest was to make sure that “ticketed” included frequent flyer awards. With an estimated 50,000+ passengers traveling daily on frequent flyer awards, I have always felt it necessary to address this issue earlier than when it’s too late. As of yet I have been unable to get any type of answer from the DOT on this issue. I’ll keep trying.

As well, the current bill ends on Nov. 19, 2004 and there is time for the current Congress to extend it for another year. Given the implications of the airline industry, which while private enterprise, operates as public transportation, I hope the seriousness of this issue is acknowledged.

For those of you unfamiliar with the bill, here’s a recap:
DOT Issues Guidance on Airline Requirements To Carry Passengers of Bankrupt Airlines
The U.S. Department of Transportation has issued guidance on the statutory requirement that “to the extent practicable ” airlines carry passengers holding tickets on carriers that cease service due to insolvency or bankruptcy.

In its notice the department said that passengers holding valid paper or electronic tickets from insolvent or bankrupt carriers for a particular route are entitled at minimum to transportation on a space-available basis on any airline currently serving that route. Airlines may recover costs of providing the transportation such as the direct cost of rewriting a ticket and meal costs. The department does not foresee those costs exceeding $25 each way the notice said.

Section 145 of the Aviation and Transportation Security Act signed into law on Nov. 19 2001 requires air carriers to provide service on routes they operate to the extent practicable to passengers who hold tickets for those routes from carriers who have ceased service.

The recent announcement that Choice Hotels (Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion and MainStay Suites hotel brands) has formed a redemption alliance between their Choice Privileges hotel guest program and Preferred Hotels and Resorts will not likely make headlines, nor be the buzz around the industry. But for me, it points out how programs of all levels can add value to their loyalty programs. Yes, the rules have changed, and it looks like Choice Hotels was paying attention when all of these alliance partnerships, such as Hyatt Gold Passport and Hawthorne Suites, became the way programs grow.

What’s unique in this case is the difference there is in hotel properties between Choice Hotels and Preferred Preferred – perhaps an average daily rate multiple of 5. This distance is relative in the new award chart. The average free award night with Choice Privileges is around 10,000 points per free night. For a free night at a Preferred Hotel, the point redemption is between 24-50,000 points per night – a multiple of around 4. This is a very good multiple as compared to other similar free room night “upgrades.” For instance, in the Marriott Rewards program, you can earn at Fairfield Inn and SpringHill Suites and redeem at Ritz-Carlton Hotels. The average free night at these Marriott properties is 7,500-10,000 points per night, while the redemption at Ritz-Carlton is between 45-70,000 points per free night. I’d say that the multiplier advantage goes to Choice Privileges in this situation.

Preferred Hotels is a global brand of independently owned luxury hotels and resorts, and why they would allign themselves with Choice Hotels is a good question. As with any relatiopnship, there is a plus . . . and a minus.

The plus is that there are no blackout dates – if a room is avaialble to sell, you have it (a good program policy). The minus side is that this program requires that awards nights be booked within 30 days of arrival for locations in the U.S. and Canada and within 60 days of arrival for all other locations. Locations you might be familiar with that are part of the Preferred Hotels brand include The Lodge at Vail, Quinta Real Acapulco, The Sanctuary at Kiawah Island and The Carlton Hotel in St. Moritz.

Bottom line – the rules have changed, and it looks like there are several programs paying attention.