Flybe, a regional carrier based in the United Kingdom, has announced that they will be removing all destinations in three countries from their award redemption scheme. All destinations in Spain, Portugal and Croatia will be ineligible for award seats in the Rewards4all program effective March 31, 2011. The carrier has made this move citing high demand for said reward seats:
[O]ver the past few months we have become increasingly aware that the heavy demand for flight redemptions on what is actually just a small number of the routes Flybe operates is putting huge pressure on some of our most popular ’sea and sun’ routes such as those to Spain and Portugal….
[A]s our network evolves over the next few years this situation is unlikely to change.
This move comes on top of the regular inventory restrictions that the airline (and most others) places on award seats and it is a rather uncommon move in the industry. While some airlines may have routes or destinations that are inaccessible via award based on regular inventory controls, in this case Flybe is admitting that they simply aren’t going to bother. If you want to fly to one of those destinations you’ll have to pony up the cash.
Announcing such a change significantly devalues the loyalty program. Most customers collect points to redeem on aspriational trips. These are splurge destinations for a holidays trip that otherwise is unlikely to happen. By choosing to remove access to arguably the most desired destinations in this category the airline is essentially telling its customers to not bother working towards building up that balance because the trip will never happen. Definitely a strange move on the part of their loyalty marketing group.
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I know a lot of the people at flyBe’s Sales/Marketing group and while this may seem counter intuitive at first glance, it actually makes sense when one considers their revenue philosophy. Their goal is to generate base revenue to cover costs from “core” business on each route (O&D sales through branded or traditional multi-option channels), and then use “outside the box” channels to generate additional revenue. Their FFP is in place not to generate any customer loyalty (there are no upgrades, etc… available for frequent flyers), but is primarily a revenue generation mechanism to market other loyalty products such as co-branded credit cards, etc..
FFP redemptions only make economic sense when they are being used to cover the incremental cost of filling otherwise distressed inventory. On certain routes, flyBE seems to have concluded that they are incapable of doing so consistently. They are not afraid to redefine their business model. Sometimes it works and sometimes it doesn’t.
I see where you’re coming from (or where the marketing folks are coming from), Sean, but I still disagree with the approach. Even only giving away one or two of those seats per month is a better marketing move for the organization than outright denying that the seats will ever be available.
Just seems like a bad marketing decision to me. If the loyalty program doesn’t have any notable upside then why bother?
In my experience there was never any award availability in any case. I even wrote to them in April 10 to complain to them that I had searched for award seats from April 10 to September 10 on all of their routes to these countries ex UK and found nothing. To this day I have not had a reply. The public announcement just confirms what many have known for a while. There never was, never has been and never will be any availability for these routes.