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Frequent flyers give higher marks to smaller airlines

SmarterTravel

Many travelers complain about the difficulty of finding open award seats or the lack of airline customer service, but we’ve noticed that frequent flyers on smaller airlines seem more satisfied than their counterparts on larger carriers, despite smaller loyalty programs. Consider JetBlue’s winning combination of low fares and in-flight amenities, and the growth of America West and other smaller carriers, while the majors flirt with bankruptcy. The recent Freddie Awards for best loyalty programs are yet another indication of this trend. But unless you have very specific travel needs, smaller may not actually be better.

Travelers on smaller airlines may be giving these carriers high marks, but the limited scope of their programs is not suitable for many global flyers. The larger partner and route networks of the majors allow them to please their customers in other ways. Smaller airlines, and no-frills carriers like Southwest, might be the hottest thing in the airline industry today, but they may not be the right choice for all travelers.

Consumer opinion, as reflected by the Freddies

The results of the recent Freddie Awards back up our theory that frequent flyers on smaller airlines are more satisfied with their travel experiences. Based entirely on consumer opinion, the Freddies award the best frequent flyer programs in nine categories. This year, the awards for domestic airlines were dominated by three programs: Southwest, Alaska, and America West. No major airlines took home a Freddie Award; Northwest was the only major to score as high as third place.

Your vote still counts:

While you can’t vote for Freddie winners until next year, SmarterTravel.com always values your opinion. Tell us why you think your loyalty program is the best (or the worst) by e-mailing ff@smartertravel.com

How does it work? For 16 years, InsideFlyer magazine CEO and publisher Randy Petersen has encouraged the public to vote for its favorite loyalty program in each category and rank the programs on a scale of one to 10. The winner is the airline with the highest ranking out of 10, though to be considered for a prize, the airline must receive at least one percent of the vote. This system allows airlines with smaller membership numbers to compete against their more major counterparts, while still honoring the airline with the highest level of member satisfaction.

The nine categories are best award, best bonus promotion, best affinity credit card, best newsletter, best website, best customer service, best award redemption, best elite-level program, and program of the year.

Several of these awards were repeats of last year’s performance, but the overall history of Freddie Award recipients highlights an interesting trend in the airline industry in general. Between 1999 and 2002, the award winners began switching from major airlines—Continental was often a big winner—to smaller airlines. Southwest was the first nonmajor airline to start winning Freddies in 1999, but it wasn’t until the year 2002 that the smaller airlines began to sweep their bigger counterparts in a major way.

These changes in Freddie winners indicate two things. The first is that in the last few years, smaller airlines have become as viable in the airline industry as major airlines. More people are flying them as their main airline. And second, the smaller airlines have been growing and improving their service just as the majors have begun to flounder. It is hard to say if the rise of nonmajor airlines and their innovative ideas caused travelers to become dissatisfied with their former favorite airlines, or if they just happened to flourish in an economy and world state that was not kind to the majors.

However, it is too easy to read too much into these results. No airline scored lower than a six in the value rating, meaning that thousands of people were still giving high marks to the major airlines. American’s AAdvantage program, which scored a fourth place finish in award redemption as its best placement, routinely got the second highest number of popular votes, after Southwest. A large number of travelers might think American has the best program; it’s just that Southwest and the other nonmajor airlines scored high marks more consistently.

Another way to look at the results is by point spread. For program of the year, the first and 12th place finishers were separated by just under one and a half points: 9.38 for Alaska and 7.89 for Air Canada. The top five finishers in that category all scored above nine points. So competition was very close; a few hundred more votes for one airline may have been enough to tip the scale. So don’t write off a program just because it didn’t finish in the top three spots; each program has its pluses and its proponents.

What to learn from the Freddies

The Freddies tell us that the smaller, more regionally based carriers are satisfying more of their loyal customers more of the time than the major airlines. But the awards say nothing about the needs of these travelers versus the needs of travelers who choose to fly larger airlines.

Carriers with smaller route networks and fewer international partners, like Alaska and Frontier, will certainly not satisfy the needs of many frequent travelers. They don’t fly to enough cities and may not have enough award redemption options. But the travelers who are loyal to these airlines are most likely travelers who don’t need a global network for their travel plans. For those flyers who fit within one of the smaller airlines’ niches, these programs offer them great service and benefits for the limited-scope travel they do.

The high marks also show that the smaller airlines are more likely in tune with their customers’ needs. They are offering the service, perks, and opportunities that these travelers want. These airlines aren’t trying to please everyone, just their most loyal travelers, and the consumer response indicates that they seem to be doing the right thing.

On the flip side, the larger carriers have a tougher job than the smaller airlines because they have to please everyone all the time. With larger networks and a more diverse customer base, these airlines need to satisfy many different types of travelers with a wide range of demands. Combine this with a tough economic climate, and it’s no surprise that these airlines are falling short.

However, these airlines have many perks that the smaller airlines do not, such as larger partner networks providing more ways to earn and burn miles, robust flight schedules, and more first- and business-class seating. If you value these types of services, you will likely be happier with the majors, regardless of consumer opinion about the smaller carriers.

Smaller carriers are stirring up the industry with innovative approaches to airline travel and service, and their accolades (such as the Freddie Awards) should garner them a closer look from frequent flyers. Perhaps the majors will learn from the new standards being set and apply the lessons they learn to pleasing their most loyal customers more often.

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