Continental plans bonus cut, award price increase

Frequent flyer program members should prepare themselves for yet another blow to the value of their miles, this time from Continental, operator of the OnePass program. In this case, it's actually several blows rolled up in a single announcement and delivered in a series of jabs over the coming months.

The first of the changes: Continental now (as in immediately, with no forewarning) reserves the right to make changes to the OnePass program with just 30 days' notice. Previously the program's terms and conditions promised 60 days' advance notice. (It would appear that Continental broke its own rule here, since members were not given 60 days' warning of the change to the new 30-day rule. But that's the least of OnePass members' concerns.)

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Secondly, and of more immediate impact, effective December 1, the longstanding 500-mile bonus for booking online at continental.com will be discontinued. Or at least it will be for members with a mailing address in the 50 states. Non-U.S. members apparently need further training in the use of Internet booking.

And finally, beginning February 1, 2008, mileage requirements for several types of awards will increase.

The price increase that will affect the most members will be for first-class awards on flights within or between the contiguous U.S., Alaska, and Canada. Capacity-controlled SaverPass awards will increase in price from 45,000 to 50,000 miles. And the price of unrestricted EasyPass awards will rise from 90,000 to 100,000 miles.

The other price increase applies to overseas BusinessFirst awards. Award flights between North America and Asia, India, Africa, or the Middle East will increase from 250,000 to 300,000 miles. And award flights between North America and Southern South America will rise in price from 180,000 to 250,000 miles.

In the interest of making the best of a bad situation, OnePass members should bear in mind that awards booked before February 1 can still had be at the current prices, so advance planning could result in significant savings when contemplating award trips on the affected routes. Booking before December 1 will also generate the soon-to-be-discontinued 500-mile bonus.

But there isn't much that can be done about the longer-term trend. For all the consumer frustration with the current state of mileage programs, airlines have been operating at more than 80% of capacity in recent months. So the threat of consumers taking their business elsewhere has no real potency.

What should concern the airlines—and what gives consumers a modicum of market power—is the possibility that the cumulative effect of the setbacks will push program participants to the brink, the point beyond which loyalty simply won't be worth the effort. And if consumers disengage from mileage programs, airlines stand to lose a hugely profitable portion of their business.

The latest moves by Continental nudge frequent flyers one more step in the direction of disengagement.

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