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Reward Seat Availability Survey: Airberlin, Lufthansa/SWISS/Austrian, and Air Canada score 90% or better for global availability

The 8th annual Reward Seat Availability Survey – now sponsored by CarTrawler – finds that Southwest is tops in annual reward rankings, but survey shows fewer reward seats worldwide.

DUBLIN, IRELAND & SHOREWOOD, WISCONSIN, USA – The steady improvement in airline reward seat availability since 2010 ended with the results from this year’s CarTrawler Reward Seat Availability Survey. Last year 76.6% of reward queries provided access to a saver-style reward seat; this dropped to 72.4% for 2017. The story for US-based consumers is generally positive, while frequent flyer members elsewhere in the world are seeing moderate to significant declines in reward seat availability. 

Some things haven’t changed; airberlin, JetBlue, and Southwest have placed in the top six since 2014. For 2017, three airlines showed significant improvements to their rankings. Alaska Airlines had the 7th best reward seat availability for 2017, which is much improved from its 14th place ranking in 2016. Air Asia Group made a 10-position leap from 19th in 2016 to 9th for 2017. Delta also made a significant jump from 16th in 2016 to 10th place in 2017. 

Southwest now holds the first place position by itself with an outstanding 100% score; every flight queried provided reward seats below the domestic saver-style level of 12,500 points/miles. 

The survey answers the question, “How easy is redemption for the basic and most popular reward type offered by the world’s top airlines?” The 25 carriers in the survey remained almost the same as 2016; Hainan and Qatar replaced Alitalia and Virgin Australia. The following overall conclusions were identified by the 2017 survey:

  • Nine airlines dropped reward seat availability by more than 5 points for 2017; it’s no coincidence six of these airlines also face financial challenges for the current year. This includes airberlin, Cathay Pacific, Emirates, and Turkish Airlines.
  • Long-haul availability also dropped (after years of steady improvement) with only four airlines having availability scores above 70% for 2017, compared to eight last year.
  • Reward payback was introduced in 2016 as a new metric for North American programs, with an average return of 5.5% per dollar spent on base fare; this showed a noticeable increase to 6.5% for 2017. Concurrently, average reward prices for US domestic travel (except on United) dropped by nearly 11% for 2017.

“Airlines that run enhanced reward programs for their loyal customers have a great opportunity to differentiate themselves in the increasingly competitive travel marketplace. This report shows that an increased focus on value-based rewards will give airlines a keen competitive edge in the battle for the customer. Airlines that personalise their loyalty offerings to the needs of their customers can enjoy increased revenues across flight and ancillary products. More importantly customer satisfaction and lifetime value will increase,” said Aileen O’Mahony, Chief Commercial Officer at CarTrawler.

The CarTrawler Reward Seat Availability Survey is based upon 7,420 booking and fare queries made by the IdeaWorksCompany at the websites of 25 frequent flyer programs during March 2017. Travel dates spanned June through October 2017, with top routes for each carrier checked to assess “saver style” reward seat availability.

As in previous years, survey findings indicate frequent flyers are better served by the reward programs at value-oriented airlines. The average among the five value-oriented airlines (Air Asia, airberlin, GOL, JetBlue, and Southwest) was 83.0%, while the more traditional carriers in the survey group registered 69.8%.

The Survey Queries Saver-Style Reward Availability
Saver-style rewards are an important benefit for most members and the primary topic of this survey. The “% of Total Availability” column (see prior page) represents the frequency of queries which produced one or more available flights for a roundtrip pair of travel dates. A minimum of two seats was required for each outbound and inbound reward booking query. For example, the 79.3% result for Turkish Airlines reflects the fact that 222 of the 280 outbound and inbound date queries provided a minimum of one flight in each direction with at least two available saver-style reward seats. The right-hand column compares 2017 results to the Reward Seat Availability Survey conducted by the IdeaWorksCompany in 2016. 

Long-Haul Reward Availability Sees Slight 0.8 Point Decline From 2016
Over time, reward travel to faraway places has become more accessible with airlines offering increased reward inventory on 2,500+ mile routes. But 2017 saw a pause in this positive trend with saver-style seats available for 60.3% of long-haul queries for 2017; which is a small decrease from the 2016 result of 61.1%. Back when the first survey was conducted in 2010, the same statistic was a very skimpy 43.9%. Of course, the prices of these rewards have generally increased over time. Notable price hikes have been made in the last couple of years by US-based global carriers and this mitigates the benefit of better availability.

Long-haul rewards are one area which can pose challenges for frequent flyer program members. Some airlines radically reduce reward inventory for long-haul travel during June, July, and August. This is often a major source of member frustration. Please remember the queries for this survey are conducted in March; that’s a generous 3- to 5-month period prior to departure. But as displayed in the table below, some airlines successfully overcome the revenue conflict and provide more rewards for their long-haul routes.

Turkish Airlines made a nearly 50-point leap in the 2016 rankings, but gave back 20 points for 2017 (the largest decrease among the airlines surveyed). Alaska Airlines was unique for 2017 with a large jump of 17.1 points from its 2016 result. Sadly for consumers, 2017 results largely indicate a net overall reduction of saver-style reward availability for long-haul flights.

Reward Payback Introduced a New Benchmark in 2016
Back in 2015, IdeaWorksCompany introduced "Reward Payback" for its new annual hotel loyalty report. This same metric has been calculated for seven North American carriers in the 2016 and 2017 reward availability reports: Air Canada, Alaska, American, Delta, JetBlue, Southwest, and United. Reward payback is a simple benchmark to measure how these programs deliver their primary benefit to everyday travelers. It represents the reward value returned per dollar spent on base fares.

For example, a reward trip between San Francisco and Chicago on United might be priced at 25,000 miles. The same roundtrip costs $249 (base fare) to purchase and accrues 1,247 miles in the MileagePlus program. The member would need to take about 20 of these trips to accrue mileage sufficient for the 25,000 reward. Reward payback is calculated by dividing the $249 value of the reward by the total base fare expenditure of $4,980 (for the 20 trips) to generate a result of 5%. Described another way, the dollars spent on base fares yield a reward payback of 5 cents.

When frequent flyer programs are assessed using this method, the loyalty power of these programs becomes quickly apparent. With retail-oriented loyalty programs offering rewards of 1% to 2%, the prospect of an 11% return presents a compelling argument to join and become a repeat customer.

This method allows everyday consumers to readily compare programs using a value-oriented benchmark. There are some caveats, as calculations are based upon the lowest available reward price and base fare. Therefore, the reward payback data presented here is most applicable for leisure travel and members not benefitting from an elite status accrual bonus.

Fares paid by business travelers are often much higher and would generate more miles (or points) in programs that base accrual on the fare paid. Under this circumstance, reward payback is dramatically increased for the customer. In addition, elite members also accrue bonus miles which can easily double the rate of reward payback. This metric does not evaluate the payback provided by co-branded credit cards.

IdeaWorksCompany did additional calculations to determine how elite status would affect reward payback. The results can be very dramatic, such as the very generous 25.6% reward payback associated with Alaska Mileage Plan for MVP Gold 75K elite members benefiting from the 125% mileage bonus. Other generous results include Southwest at 17.4% for A-List Preferred members (100% point bonus), JetBlue at 11.7% for Mosaic members (50% points bonus), and United at 10.9% for Premier 1K members (120% mileage bonus).

This Survey is Designed to Compare Online Booking Results
All the carriers and frequent flyer programs chosen for this analysis meet two key criteria. First, they are among the largest airlines based upon passenger traffic reported for 2015 (the most recent full year for global traffic results). Second, the online reward booking website must allow reward queries to be conducted during March for a June through October flight period. When offered, online reward availability for partner airlines was always requested; rewards fulfilled by calling the airline were not. Online access is important for consumers; a major US carrier disclosed more than 90 percent of its domestic reward bookings are made online. The report is designed to focus on this important consumer attribute.

The results from the 8th annual Worldwide Report of Reward Availability indicates airlines can reduce reward seat availability when their finances are stressed. They’d prefer to generate more quick cash by selling these seats to consumers ─ not allocating the inventory to benefit frequent flyer members. Back in 2008 the opposite happened ─ when consumer demand for buying seats plummeted, airlines made plenty available for reward travelers. While today's trend applies globally, the situation in the US is different. Reward seat availability has decreased, but at the same time airlines are fine tuning domestic reward prices. Surprisingly, this has yielded lower reward prices and this creates better value for US frequent flyer program members.

Reward travel does represent only one dimension of the value provided by a program to its members. But it’s an attribute that truly sets frequent flyer programs apart from the seemingly unlimited array of loyalty programs available to consumers. Airlines have known, since the first programs were introduced 35 years ago, that nothing can match the allure of a practically free flight to an exotic destination. This survey provides proof that some airlines deliver this promise much better than others.

Theodore Koumelis
Co-Founder & Managing Director - Travel Media Applications | Website

Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.

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