In the David versus Goliath battle between the LCCs and the mainline carriers, the balance of power is always shifting. Therefore, I like to periodically circle back and review the loyalty schemes of the two groups. Are the programs operated by the full-service airlines still superior to those of the LCCs? Are they comparable, and do you get what you pay for?
With so many programs to consider, there's no better way to approach the question than by reviewing and comparing programs that typify the two competing categories, American's AAdvantage and Southwest's Rapid Rewards.
American AAdvantage: The original
American's AAdvantage program is a giant among giants—the first modern airline loyalty program, and the largest both in terms of membership (56 million) and program partners (more than 1,000). It's the second figure that's relevant to this discussion: It means that AAdvantage members can earn miles when purchasing products and services at more than 1,000 companies. So it's easy to accumulate a significant cache of miles, or at least it's easier than it would be if there were fewer earning opportunities.
AAdvantage also offers a wealth of options when it comes time to redeem all those earned miles. In particular, members can use their miles for free flights on 21 airlines, aside from American itself, making the entire world accessible for award travel. In addition, AAdvantage miles can be redeemed for vacations, hotel stays, magazine subscriptions, and charitable donations.
For true frequent flyers, American's program features three levels of elite benefits, including bonus miles, upgrades, and priority boarding.
Foremost among the program's rules, members must have account activity every 18 months in order to keep their miles alive. But so long as miles are earned or redeemed every 18 months, all the miles in an AAdvantage account will remain viable indefinitely.
Southwest Rapid Rewards: The model discounter program
Southwest's Rapid Rewards program was one of the first rewards schemes launched by a discount airline. It has since served as a model for the loyalty programs of other LCCs.
Rather than miles, Rapid Rewards members earn credits. One credit is awarded for each one-way flight and an award certificate good for a free round-trip flight is automatically generated after the member earns 16 credits (eight round-trips).
Where members of American's program earn miles for doing business with more than 1,000 companies, Rapid Rewards members are limited to earning credits with the following: ATA Airlines, Alamo, Budget, Dollar, Hertz, Choice, Hilton, Hyatt, InterContinental, La Quinta, Marriott, the Rapid Rewards Visa credit card, and the American Express and Diners Club cards.
When it comes to awards, Rapid Rewards members have a choice of free flights on Southwest or ATA. That's it.
Southwest's elite program is bare bones at best. Rapid Rewards members who fly 32 or more one-way flights within a 12-month period receive priority boarding privileges. Members who earn 100 credits in a year receive a pass allowing a companion to accompany the member on Southwest flights for free. Needless to say, there are no upgrades: Southwest has no first class.
Finally, and significantly for those who don't travel frequently, Rapid Rewards credits expire two years after they are earned. Unlike miles in the legacy carrier programs, which can be extended by maintaining regular account activity, Southwest credits disappear forever when they reach their expiration dates.
The verdict: Size matters
When it comes to frequent flyer programs, size and superiority really do go hand-in-hand. Bigger programs offer more opportunities to earn miles and more award options when it comes time to redeem them. At least for the time being, the programs of the legacy carriers are much larger than those of the LCCs.
The larger programs outperform their smaller counterparts on another key feature as well: mileage expiration. The LCCs' policies tend to be much harsher, like Southwest's. JetBlue points expire just one year after they are earned unless the member signs up for the JetBlue Card from American Express. Charges on the card extend the life of all miles in the account for another 12 months. In Spirit's Free Spirit program, miles expire if fewer than 2,000 miles have been earned during the previous six-month period.
Overall, programs like American's are significantly more generous and more flexible than programs like Southwest's. So while LCCs have one-upped the mainline carriers on several fronts, in the area of frequent flyer programs, the legacy airlines have managed to maintain a competitive advantage over their lower-cost rivals.