Airline perks: You get what you pay for

A Delta airlines jet lands in front of the tower at Miami International Airport in April 2013. Delta recently announced it was changing its frequent flier program, basing the accumulation of points or miles on the cost of the ticket rather than the distance traveled.
A Delta airlines jet lands in front of the tower at Miami International Airport in April 2013. Delta recently announced it was changing its frequent flier program, basing the accumulation of points or miles on the cost of the ticket rather than the distance traveled.
Joe Rimkus Jr. / Miami Herald file photo

Milwaukee Journal Sentinel

When it comes to air travel, you don’t have to be a rock star to be treated like one.

All you need is cash.

Airlines, which charge fees for everything from baggage to legroom, are now offering fancy perks to anyone willing to pay for them. The more you spend, the more you get in return.

“At the highest level of service and status, airlines will meet and greet passengers at the curb, provide private screening and whisk them to plane side in a sedan car on the ramp,” Jay Sorensen, president of Shorewood, Wis., airline consulting firm IdeaWorks, said last month in a report on the topic. “This level of service normally eludes ‘you and me’ but is now within the grasp of anyone with the swipe of a credit card.”

In some cases, Delta Air Lines will even deliver you to your flight in a Porsche, Sorenson says in his report.

It used to be that airlines reserved regal in-flight treatment for only their highest-mileage frequent fliers.

Those days have flown off into the sunset.

Delta Air Lines said last week it is changing its frequent flier program so its biggest spenders get the most rewards.

Delta’s program “will better recognize frequent business travelers and those less frequent leisure customers who purchase premium fares,” the airline said in announcing the change. “The move is consistent with a trend in the travel industry of rewarding customer behavior based on price.”

The trend is more aligned with reality, Sorensen said.

“It always astounded me that a traveler could spend $5,000 on round-trip business class to Europe and really get very few points [miles], maybe twice the number of miles as the person traveling on the lowest fare,” he said.

Delta’s new program, which takes effect in 2015, isn’t entirely new in the industry and will closely resemble the program Southwest introduced in 2011, Sorensen said.

“Their model is, basically, if you are paying for a low-price fare, you’re going to earn a certain number of points [miles] per dollar spent,” Sorensen said of Southwest. “If you buy an expensive business-type fare, that multiple increases so you earn points even faster.

“For people who are buying the cheapest fares, your benefits from a frequent flier program are going to be far more limited now,” he said.

The changes represent the transformation that continues to take place in the airline industry — a business in which bankruptcies had become as common as canceled flights in a snowstorm.

Selling services or upgrades is part of the equation.

“If you have the money, you can buy just about whatever you want,” said Peggy Fischer, owner of Shooting Star Travels in West Bend, Wis. “And people are becoming way more accepting of that.”

Part of the trend also stems from the airlines seeing private, third-party companies cashing in on services.

“What triggers it is, there were a number of independent companies who were found to be charging customers for what amounts to a meet-and-greet service that shepherds them through the process,” said Robert Mann, an independent airline consultant in New York.

“Carriers figured, ‘Well, if there is a third party doing this and making big money, why shouldn’t we just sell it directly to the client?’ ” Mann said. “If there’s a market for it, we'll be glad to charge you for it.”

The trend shows no signs of slowing.

“Look for more airlines to simply use pay-as-you-go, also known as a la carte, methods to also seduce more revenue from those willing to buy more perks,” Sorensen said.

Airlines are simply doing what other travel and leisure businesses have done for years, he said.

“Some of the airlines promote the promise of extra pampering to a wide array of passengers, such as moms traveling alone with kids, elderly parents and even minor celebrities,” Sorensen said in his report.

Casinos, hotels, cruise lines and theme parks are among the businesses offering more service in exchange for more dollars.

The market is not necessarily huge, but it is lucrative, Sorensen said.

Among air travelers, “70 percent of the market wants the lowest fare, bar nothing else,” he said. “20 percent considers other factors such as nonstop flights, or their preference for a particular brand. They'll pay a premium.”

Then there is the top 10 percent of the market. “They always pay a premium for better service,” Sorensen said.

The airline perks business is aimed at that top 30 percent that looks at factors beyond price.

The money involved is big.

“The guy who is paying $600 in coach to fly internationally is probably a $6,000-plus product in first class,” Mann said. “Same flight but different service quality.”

Perks are not just reserved for high rollers.

Fischer has a client who was planning a trip to Jamaica to escape this year’s bitter winter.

For the flight the client wanted, the only seats available were middle seats in different rows of the aircraft.

“He said, ‘Peggy, I want to sit next to my wife,’ ” Fischer said. The airline had a seat upgrade program, and had seats available next to each other — for a fee.

“There’s no extra leg room, no extra anything, No drinks. No nothing,” Fischer said. But for an extra $59 a seat, the man and his wife could sit next to each other on the flight.

“He paid the extra $118 right off the bat,” Fischer said. “He didn’t even question it.”

Such seat selection fees are another trend in the airline industry, Mann said.

“I think there will be a move toward not allowing anyone to select a seat unless they pay a fee,” he said.

The fee trend is part of the shifting nature of what once was considered the standard, if unspoken, agreement of what a traveler expects in return for buying an airline ticket.

“A lot of what you would consider to be part of the basic bargain is still available to be removed and then added back as an up-sell,” Mann said.

For some travelers, it may make sense to pay an extra fee for an upgrade, Fischer said.

“If you are going to China or South Korea, it might be as much as $500 to $1,000 more total for the ticket,” she said. “But if you are going to be able to sleep comfortably, and you’re not going to be paying $5,000 round trip for a business-class ticket or $10,000 for a first-class ticket, people will definitely opt to do that.”

Could pay toilets on flights be next? Ireland’s Ryanair once toyed with the idea.

“I don’t think they could get away with that in the United States,” Fischer said.

But just about everything else is fair game.

“They do have the ability to charge us for other things,” Fischer said. “It'll be interesting to see what’s next.”

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