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Why Airline Loyalty Programs Aren't Loyal To Frequent Fliers

Its hard to think of any other business that can dilute its product like this and still keep its customers. The only frequent fliers who seem to win at this share the airlines' belief that rules are meant to be bent, if not broken.
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Laura Noell recently discovered a dirty little secret about her airline loyalty program: The "loyalty" goes one way.

For years, she and her husband, both faithful United Airlines Mileage Plus members, flew United whenever they could. In return, the airline offered them a guaranteed upgrade to United's "Economy Plus" section, she says, which gave them about the same amount of legroom as they had in coach class before airline deregulation.

The Noells, who live in Bethesda, Maryland, and often fly to California, believed it was a fair trade: They stuck to United, whether or not another carrier like Virgin America offered a less expensive flight. They put all their purchases on an affinity card that helped them collect miles and maintain their good standing with Mileage Plus.

The Noells thought they would be rewarded for being perfect customers. They were wrong.

From one day to the next, United changed the offer that allowed them to upgrade to Economy Plus. Poof! No more comfortable seats.

"There is now a significant fee for each seat on each flight," says Laura Noell. "And there is no incentive to fly United exclusively."

"Too Generous"

I recently spoke with a United executive, who explained these program tweaks. After merging with Continental Airlines, the now number-one airline in the United States took a hard look at Mileage Plus and decided to make some difficult downgrades. Simply put, the existing loyalty program was too generous.

These changes aren't special to United. Not a week seems to go by that another travel company makes an unpopular revision to its loyalty program, requiring more points for a redemption or more miles flown for a special perk. The slighted customers then complain to me through my consumer advocacy site.

But the Economy Plus change is particularly cruel. Passengers who just want a somewhat comfortable seat, by 1970s standards, now have to give United their loyalty and pay a fee, according to Noell. Every passenger used to get those seats a generation ago, regardless of their fare. Back then airlines like United had minimum standards, when it came to seat comfort.

Making Up The Rules

You may not realize it, but these program changes are perfectly legal. Few people understand that if they're participating in a loyalty program, they've agreed to let their airline do whatever it wants, when it comes to the rules.

It's right there, in black and white, when you open your Mileage Plus terms and conditions. It's the first item.

Membership and benefits, including the Premier Program, are offered at the discretion of United Airlines and its affiliates, it says.

"United has the right to terminate the Program and/or the Premier Program or to change the Program Rules, regulations, benefits, conditions of participation or mileage levels, in whole or in part, at any time, with or without notice, even though changes may affect the value of the mileage or certificates already accumulated," it adds.

Almost no one bothers to read the fine print in their program. I'm willing to bet the Noells didn't. If they did, maybe they'd have second thoughts about giving any airline their loyalty. (Again, United isn't alone with its "we-can-change-the-rules-anytime" rule -- all of the major carriers do it.)

Trimming an upgrade offer is a relatively minor issue, in the overall scheme of things. Airlines do far worse, from arbitrarily confiscating miles to ending programs and partnerships that their customers have come to rely on.

But you can't blame Noell for feeling betrayed.

"I am extremely disappointed in United," she says. "I have just canceled my [affinity] credit card. I will probably be flying United less often in the future."

Meanwhile, United has benefitted from Noell's business for years. It's a fine way to say "thank you," isn't it?

Its hard to think of any other business that can dilute its product like this and still keep its customers. The only frequent fliers who seem to win at this share the airlines' belief that rules are meant to be bent, if not broken. They game the system, engaging in ethically troublesome activities like "churning" their credit cards to maximize their loyalty program benefits.

The Noells are not the last passengers who will be disappointed by their airline loyalty program. But maybe this is a good time to take a look at your airline's rules and ask yourself: Am I next?

By the way, after you've left a comment here, let's continue the discussion on my consumer advocacy site or on Twitter, Facebook and Google. I also have a free newsletter. Here's the signup form.