US Airways has been steadily decreasing the benefits they offer to their passengers over the past several months. Yet another set of cuts came out this week, with the removal of all free drinks and snacks from their flights, and also the removal of elite bonus miles.
The drinks and peanuts thing sucks and they’ll probably generate a little bit of extra revenue there which will be nice, but the overall impact will probably net neutral on the company; I don’t know anyone who buys a ticket just to get that free cup of ginger ale.
The miles thing, on the other hand, will likely have a real and significantly negative impact on their passengers. It started with the removal of the 500 mile minimum for flights, meaning that it was going to become harder for folks to qualify for elite status. Now they are taking away one of the main benefits of being elite – the accrual of extra miles while flying. The top brass have realized that the frequent flier miles are a liability and they are basically making it significantly harder for their most frequent passengers to earn more miles.
Miles issued through the Dividend Miles program represent a real and significant economic cost. Each mile that is issued can result in the loss of revenue for the company. By reducing the number of bonus miles issued, US Airways is in a better position to withstand the impact of record fuel prices.
They blame it on fuel prices but the fact is that they still haven’t integrated the airline since the America West merger years ago and they haven’t been able to realize any savings anywhere else in the system. Plus, most of their passengers with tons of miles want to redeem for trips to far away places and US’s route map is too weak to get there so partner redemptions come in to play, and that would seem to be a one-way revenue stream out for US Airways; I cannot imagine many of their partners’ fliers redeem a lot of trips on US Air. That adds up to a lot of money flowing out of the coffers.
I’ve got ~77K miles in a Dividend Miles account that I rarely touch. Looks like it is time to cash out – on a partner reward – and save my miles while they still have a chance of being useful. I don’t see the airline lasting too much longer.
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