After things go bad, a big burst of loyalty generosity is an easy way for a travel provider to say "we're sorry."
Editor’s Note: Skift’s Business Traveler newsletter is now the Business of Loyalty newsletter.
In this weekly missive, we’ll bring you the same insight into what matters most to the people who travel for a living, but now with an added focus on how airlines, hotels, and credit card programs battle for their attention and their business — a points geek with a Ph.D. of sorts.
While we are still looking at how these moves impact the consumer, the focus is on what the industry is doing to win their loyalty. The newsletter is being written by Grant Martin, who you’ve come to know as the author of our Business Traveler newsletter over the last three years. He’ll be able to take advantage of contributions from Skift editors including Brian Sumers (airlines) and Deanna Ting (hotels) in order to better explain what’s happening with loyalty right now. We hope you’ll stick with it, and we promise to never devalue your reading experience.
It’s been a bad few weeks for British Airways. Over Memorial Day weekend, the airline experienced an unprecedented failure of its IT system, leading to the cancellation of thousands of flights out of London Heathrow and Gatwick — and thousands of cascading disruptions across the British and Oneworld network.
It took days for the airline to get fully back up to speed and over 75,000 passengers were affected, leaving a wake of grumpy passengers and a raft of critical British media.
To make up for the fiasco, British initially offered to rebook passengers and then eventually started refunding entire itineraries. Now, in addition, it appears that the airline is extending its apology to its Executive Club loyalty program and giving free extended elite status to affected members.
In an email to Executive Club members affected by the outage, James Hillier, Consumer Loyalty Programmes Manager at British Airways, said, “As someone who flies with us so often, I want you to know that we always strive to offer you the highest level of service, and make your journey as comfortable as possible.” Referring to the series of cancellations after the IT meltdown, he continued “we clearly fell far short of this commitment last weekend.”
Hiller’s email was shared on Flyertalk and widely applauded by members of the Executive Club.
Typically, elite status in the Executive Club is earned by flying a fixed volume of miles and racking up revenue-based “tier points” each year. Reaching top-tier status can often involve spending tens of thousands of dollars with the airline each year, so the move to give away free status is both generous and costly.
Going over-the-top to please loyal customers, however, may be exactly what British needs. Since the appointment of Alex Cruz as CEO, British has cut benefits to passengers significantly, reducing seat pitch on many flights and adding fees across the spectrum. And while saving the carrier money, that campaign also hasn’t earned the airline a lot of friends.
Placating loyalty program members may thus be the smartest thing that the airline can do to keep at least some passengers on its side. And judging by the response on the Flyertalk thread, it seems to be working.
Back at BA headquarters, what really happened to cause the IT fiasco is still under investigation, but sources now suggest that it wasn’t a force of nature; rather it was human error. A contractor apparently flipped the power switch on a main server.
Skift Stories and More Expert Insight
Travel Tech CEO Series: Points International Aims to Upgrade Airline and Hotel Loyalty Programs: Points is trying to diversify beyond being the world’s largest reseller of airlines and hotels points. But this loyalty tech company needs a little more mojo if it wants to produce truly game-changing products.
Wyndham Partners With Caesars on Loyalty Programs: Yet again, Wyndham Rewards isn’t missing out on any chance to capitalize on the opportunities opening up in the pending integration of SPG with Marriott Rewards.
American Express Beats Out Citigroup as Hilton’s Exclusive Loyalty Credit Card Provider: American Express will become the exclusive credit card issuer for Hilton Hotels, the company said Thursday, a major success for a business that has been facing increased competition.
Leveraging Loyalty to Drive Direct Bookings: Deeming online travel agency fees too high, hotels turn to loyalty programs to push direct bookings.
United Brings Back Hot Food on Some Routes — But Only in Economy Plus: Months after Delta Air Lines and American Airlines said they would feed economy class customers on some lucrative coast-to-coast routes, United Airlines made a similar announcement, but with a twist. Unlike its competitors, United will only provide free food to passengers seated in its extra legroom economy class section called Economy Plus.
Laptop Ban on European Flights Might Not Happen, Report Says: This has a hot topic for several weeks, with U.S. Department of Homeland Security Secretary John Kelly saying repeatedly he was considering a restriction because of terrorism concerns. At first, Kelly suggested a ban might only apply to flights from Europe, but in recent days he has said it might be implemented on more flights.
Travel Skills: Watch for big changes in TSA screening procedures: Just in time for summer, the Transportation Security Agency is launching new requirements for some checkpoint screening procedures.
The Points Guy: British Airways Cabin Crew to Strike for Four Days This Month: Fresh off of an IT fiasco, BA’s cabin crew couldn’t have picked a worse time to stage a strike. Perhaps that’s the point.
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Photo credit: World Traveller Plus on the British Airways A380. Nick Morrish / British Airways