Over recent years, more and more frequent flyer programs have ditched award charts in favour of dynamic reward seat pricing. Most of the US frequent flyer programs now do this, as well as the likes of Air New Zealand Airpoints and Air France/KLM Flying Blue.
Even Qantas Frequent Flyer and Velocity have started – to a limited extent, at least for now – to introduce dynamic reward seat pricing. Qantas recently launched dynamically-priced Classic Plus Flight Rewards, and Velocity now offers three tiers of pricing for Virgin Australia domestic Economy reward seats.
Dynamic award pricing means the number of points or miles needed to book a reward seat is not fixed. This means flights in higher demand could be more expensive.
Traditionally, frequent flyer programs have offered reward seats at fixed prices but made the availability dynamic. In other words, not all flights would have redemption seats available. But this is starting to become the opposite as more people collect points and expect – reasonably or otherwise – to be able to redeem them on a flight of their choice.
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Dynamic pricing for partner airline awards
Although it has become more prevalent, dynamic pricing has typically been limited to bookings on the frequent flyer program’s host airline. For example, United MileagePlus award bookings including United Airlines flights would have variable pricing – but itineraries wholly on partner airlines would cost a consistent number of miles. This too is starting to change.
United MileagePlus has started to price reward bookings on selected partners such as Copa Airlines dynamically. In other words, the number of miles it costs to book the same route and cabin class may be different on different dates. This even now applies to itineraries that don’t include any United flights.
Air Canada Aeroplan also uses dynamic pricing for Emirates reward seats. (One key benefit of booking Emirates flights via Aeroplan, however, is that there are no fuel surcharges.)
The latest frequent flyer program to start doing this is Alaska Airlines Mileage Plan.
Recent changes to Alaska Airlines Mileage Plan
Alaska Airlines recently overhauled its loyalty program, Mileage Plan. As part of these changes, Alaska Airlines opened up reward flight bookings on a lot more routes. But it also increased the cost of award bookings on many existing routes.
Another subtle change that Alaska Airlines made to its new partner award charts is to list the mileage amounts as “starting at” a particular level. This is unusual because a published award chart usually lists fixed prices.
Here’s the Asia Pacific award chart, as an example:
In many cases, the number of miles you’ll need for a Mileage Plan partner airline award flight will be as published on the award chart. But not always.
We’ve recently found examples of Alaska Airlines Mileage Plan using dynamic award pricing for partner airlines including Qatar Airways, Air Tahiti Nui and Icelandair.
For example, on the date shown below, the Alaska Airlines website shows a one-way Business Class award seat from Auckland to Papeete on Air Tahiti Nui for 50,000 miles + USD43:
On a different date, the same flight would cost 155,000 miles + USD43 for Business Class. That’s more than triple the number of miles.
This is because there is no “saver” level award availability in Business on the second flight. But instead of offering nothing at all, Mileage Plan is giving members the option to book a seat out of a higher fare bucket at a higher cost.
The trade-off of more availability
On one hand, it’s disappointing to see frequent flyer programs heading in this direction. On the other hand, this change could actually result in more reward availability being released overall.
The thing is, those higher priced reward seats are actually extra seats that aren’t available to book through most other frequent flyer programs at all. The regular award seats are still available to book at the lowest price point – that hasn’t changed. But Qatar Airways, Air Tahiti Nui and Icelandair are making extra seats available to Alaska’s Mileage Plan members on flights where the regular award inventory is exhausted – just at a higher price.
Yes, you could say that it’s a shame those extra reward seats are more expensive. But the alternative is not necessarily that they would be available at the rate shown on the award chart. The more likely scenario is that, if those extra award seats weren’t being offered at the higher price, they probably wouldn’t be there at all.
In that sense, this development could actually give frequent flyers more options to use their points.
Of course, if frequent flyer programs eventually started offering reward seats at higher prices that would have previously been available at the lowest points level, then that wouldn’t be good for members.
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Could this work in Australia?
Many Qantas Frequent Flyer members complain that they can’t find Classic Reward seats on flights when and where they want to travel. The introduction of Classic Plus for Qantas-operated flights has gone a small way towards addressing this. But just imagine if you could access more reward seats on Qantas’ partner airlines – albeit for a higher number of points. Would the trade-off of having to pay more points be worth it?
Such a system would rely on Qantas to negotiate favourable bilateral agreements with its partner airlines. Those partners may or may not be willing to give Qantas Frequent Flyers greater access to its award inventory. But this is probably where many frequent flyer programs are ultimately heading over the coming decade or two.
What do you think of this new trend? Share your thoughts on the Australian Frequent Flyer forum!
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