Richard commented in his blog to my previous post that to make the programs really working they should be more aggressive. Being totally agreed with the point I want to propose a few directions on making practical steps. Since we don’t plan a weighted program but rather brainstorm different ideas I decided to make the cases more extreme and dream about possible directions of the changes.
As Richard pointed out there is a problem of “over-flying” in the business traveling: "I am sure there are lots of people who take extra business trips, with questionable value to the business, in order to win or retain some privileged status with the airline." He claims that a portion of the business travelers takes flights for the sake of miles. Not possessing the numbers and having difficulties to agree on how significant these numbers are I nevertheless have to confess in general with the point. There is a certain conflict of interests between employers (sponsoring the travels) and employees (flying and struggling in the travels). The employers establish travel policies and try to balance between minimizing travel costs and maximizing convenience of travelers. For instance, it’s quite a common practice to allow booking a business flight on international routes longer than 6-7 hours after a few flights flown in coach. The idea behind it is to provide “humane” conditions to frequent fliers and at the same time not to make such an expensive gift to employees flying just a couple of times a year.
The problem is although a big part of “seldom” fliers is filtered by this rule from taking expensive business it doesn’t repel frequent fliers collecting miles from odd flights (especially in business). This is relevant to odd nights in hotel as well. So the conflict is present – ones want to save money others want to gain from struggling for the job.
I think the solution may come from the travel industry. They can together via new offering, new services, new models create a win-win-win situation (a win for them, a win for employees, and a win for travelers). As Richard suggested by decoupling the services, mileage calculation, and actual booking they can stimulate new services and new offering from third-party companies. Let me clarify.
If the airline companies remove most of the standard restrictions for changing, returning, replacing tickets and make the system of requesting, quoting, booking much more open and public (not merely to travel agencies but to the fliers as well) they can beget new services. If my company after I got a ticket (according to its travel policy) allows me to play with my itinerary and change the ticket to save money on it we can split the profit between us. Let’s say instead of taking an international business flight (I’m eligible to take) I’m ready to struggle and fly in a cheaper economy class. A profit of 3000 bucks can be split between me and company. Isn’t it a win-win?
Where is the win of the airline companies you’ll ask? Let’s keep dreaming. An offer for flier of taking a longer connection flight instead of a direct one with money or award miles compensation is a direct gain for airline companies. They already do it today for virtual money at the checking counters. Why not to expose this option farther and involve all the customers in advance? Promote postponed or connection flights to better utilize your fleet and divide the dividends with the fliers. Why not to offer new services for booking, requesting, quoting, holding, and replacing tickets to customers? Create new tools generating more options and making fliers’ life more flexible. Allow them to convert virtual dollars to miles, allow them to convert miles to actual dollars, allow them to transfer and borrow miles for free, and allow them to sell and buy miles and tickets on auctions, allow them to make a mile exchange if you will! Provide mechanisms for fliers to play with THEIR itineraries, create monitoring and tracking systems, and make it safe for the business.
I suggest the airline companies (and it’s true in regards to the hotels as well) to stop trying to earn money on award miles and using miles for fictitious attraction. Make it just a means of your business and offer additional flexibility to make your company really attractive. Like money is used by the banks as a means (to use real money) use the miles as virtual money for the travel ecosystem (to attract customers, increase efficiency of your business, and eventually earn real money). Create new affiliate programs around it but let fliers, agencies and third party companies partake in processes and business flows - you’ll be surprised how they all will be creative in building new offers on top of it.
Unfortunately without exposing a number of new services all of the above is only a dream. The positive side of this misfortune is the first company implementing it can get a significant advantage of “the first in the market”.
As I said the post may seem too extreme and it doesn’t propose a concrete business plan. But at the same time I’m sure there is a plenty of opportunities in generating new money and making a big joint win for the travel industry, companies, their employees, and just private travelers. They simply have to change the rules.
