How airline Loyalty Schemes are overcharging their loyal senior customers.
When it comes to booking flights online, almost all American senior citizens have their preferred airline. And they would be silly not to. After all those years of travel, frequent flyer programs are finally paying off with speedy boarding, flight amenities, seat upgrades and perhaps even a free flight with the miles they have raked in at their disposal. Loyalty schemes therefore make seniors feel like they have nothing to lose and everything to gain, but is this truly the case?
What many trusting customers do not know is that these airlines are actually overcharging loyal customers. The latest trick of the trade that US airlines are using for profit is a cheeky pricing strategy entwined with their Codeshare agreements. With the most time and money to travel, Baby Boomers, who took an average of four to five leisure trips in 2018, on top of business trips, are the demographic that this strategy is affecting the most.
What is codeshare and how are airlines overcharging?
Codeshare allows an airline to sell seats on partner airlines’ aircrafts as if it were one of theirs. For example, American Airlines might sell a British Airways seat. These seats are still bought on the American Airlines website, and use their signature AA flight numbers.
Airlines are required to identify when they are selling flights operated by one of their partners. However, what they fail to share with their customers is that they sometimes charge significantly more than a partner’s price. In a recent example, a flight operated by British Airways but sold on American Airlines cost more than double the same flight sold on the British Airways site.
In order to take advantage of the benefits offered by airline loyalty and frequent flyer schemes, many travelers, often seniors, will head straight to their favorite airline to book flights. One would hope that an airline they partake in a loyalty scheme with can be trusted to offer the seat at the same rate as the partner airline, but this is far from the case. Airlines are using a pricing structure that bumps up the price of a partner airline’s seat by up to 60%.
And for the more allegiant older citizens who frequently fly Business Class, it’s even worse. Our research found that a Business Class flight from New York to Rome costs $9,200 with Delta, but operated by Alitalia. However, on the Alitalia site it showed that the same flight was going for $2,800. Delta asked $6,400 more for the same Business Class flight. That’s a 250% markup!
Being loyal to a favorite airline, rather than switching teams to book on the partner’s site, can therefore be incredibly expensive for these customers.
How to avoid it
When next booking a flight, loyal customers can of course scan their preferred airline first, which will almost always include codeshare flights. But don’t stop there; once a customer has found the best value flight with their favorite airline they should run the exact same search with each of the codeshare partners directly. Invariably, they will find better value if they compare not only their go-to airline, but each of the codeshare partners as well. It’s really quite simple once customers are aware of the fact that their airline hasn’t always got their best interest at heart, even if they are loyal, frequent flyers.
Seniors can continue on their loyalty scheme, and in exchange receive entry to a swanky lounge before take-off, or accumulate points that knock-off a reasonable amount from their flight fare. However, when faced with a codeshare flight, they should not be fooled into thinking their airline is handing them an honest price.
Jonathan Breeze is CEO at AardvarkCompare, has developed a free travel insurance platform focused on seniors. The former RAF pilot built several companies in the past, of which the last was sold to the insurance multinational AXA.
