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Loyalty Programs Change, Evolve With Mergers

Loyalty programsLoyalty programs keep travelers coming back, granting more perks and benefits the more they use a service provider. But what happens as the world of travel evolves and companies merge to gain efficiency and price advantage or just to stay in business? In some cases, the customer comes out ahead.

Southwest Airlines' merger with the AirTran Airways subsidiary is well underway. Though not yet complete, the company is bringing the benefits of each carrier's frequent flier program to the members of both.

Air travelers who are members of both Southwest's Rapid Rewards program and AirTran's A+ Rewards plan can shift program credits between the two in order to redeem award travel on either airline.

The move gives Southwest Rapid Rewards members some new vacation options. AirTran flies to destinations Southwest doesn't serve in Mexico and the Caribbean. Still, only credit transfers between accounts are allowed, as the two loyalty programs remain separate.

"Rapid Rewards members can transfer 1,200 program points or one Rapids Rewards credit into one A+ Rewards credit. AirTran frequent flyers can switch one A+ credit into one Rapid Rewards credit. The A+ program requires 16 credits for one round-trip coach ticket on AirTran, and Southwest's program requires 16 credits for one Standard Award ticket. Thirty-two A+ Rewards credits are worth one Freedom Award in the Southwest program," said an article in Executive Travel Magazine.

Thinking of other frequent flier programs, a common question is raised: What might happen to accumulated points if a proposed merger of American Airlines and US Airways occurs?

Experts agree: probably not much.

"All things being equal, I would expect a merged American-US Airways frequent flier program to be somewhat less generous than the two airlines' programs today," said Seth Kaplan, managing partner of Airline Weekly in a Reuters report. "Maybe you'll need more miles for free tickets to certain regions, or maybe award seats will be more scarce, or maybe it'll be harder for elite fliers to get first-class upgrades."

Kaplan offers the following advice:

  • Start using up your miles, particularly if you're interested in flying on a carrier in an alliance that might not be available to you when the deal is done.
  • Shop around to see whether another airline would meet your needs. But make sure the carrier flies the routes you most travel. This way when one of them starts dangling offers to lure you, you'll know if it's a smart move to shift your loyalties.
  • Take advantage of deals still being offered in the current programs, such as free upgrades.

The notion that travelers are "married to their frequent traveler programs" may not be a stretch. In a survey conducted in January by Starwood Preferred Guest, 73 percent of participants chose their loyalty program benefits over a spouse if they could take just one on the road.

Frequent Flyer Diet

[Flickr photo by Thomas Hawk]

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