Huge Frequent Flyer Programs Struggle At Freddie Awards

The Freddie Awards signal the best of the best loyalty and frequent flyer programs. This year was full of surprises and point to a possible shift. 

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Surprises Throughout The Evening

It was my pleasure to attend the 32nd Freddie Awards at the Steven F Udvar-Hazy Center in the Smithsonian Air & Space museum near Dulles International Airport just outside of Washington DC. Randy Petersen, the godfather of miles and points and arguably the reason that many of us have been able to travel the world was not only the host, but an incredible entertainer. He announced his retirement that evening from the Freddies in a somber close to the evening.

Matthew has an excellent post about the awards and Randy’s departure but I am going to focus on the surprises and what it tells us.

The last few times I have been to the Freddies, American Airlines, and Delta Air Lines dominated the North American categories, Accor wins everywhere in the world outside of the Americas almost without a doubt, Marriott takes home all the awards for hotels.

This year, however, was full of susprises. Here are just some of the most interesting winners:

• Aeroplan won the Best Promotion of the year (status extension), Best Program, and Best Redeemability
• American’s sole award came in the Best Elite category

What’s particularly shocking is that Southwest, which flies more passengers, has a larger loyalty program of highly enthusiastic members, and offers last seat availability did not win the category for flights redeemed for free.

• Hyatt won Best Elite program in the United States, one of the only cateogires that Marriott did not for obvious reasons if you read this blog regularly.

In Europe, Norwegian and TAP split the categories. Norwegian winning Best Program, Best Promotion, and Best Customer Service beat out massive programs like British Airways, Air France/KLM, Lufthansa, and other behemoths. Norwegian is a discount carrier and while I’ve not flown the airline yet, Ultra Low Cost Carriers usually get a terrible wrap for customer service, yet Norwegian beat out all of the giant alliance network carriers.

IHG’s revised loyalty program won 3/6 in Asia/Middle East/Oceania and 4/6 in Europe. Dethroning Accor would be enough for a headline but a domination of that scale is shocking.

In Asia/Middle East/Oceania, Qantas, Cathay Pacific, ANA, Japan Airlines, Emirates, Etihad, and Qatar were all missing from this year’s winners list. Indian carrier, Vistara, won three of six categories, with Singapore’s Best Elite program the only mainstay winner for the Star Alliance outside of North America. Garuda won Best Customer Service, Xiamen took home the 210 award for up-and-coming programs – the first winner from mainland China.

What Happened To The Big Programs?

The four finalists were shown for each category and I don’t recall United MileagePlus appearing in any of the top four. This means that at most, 7% of voters said United was the best. Delta made the top four in at least one travel loyalty category at the awards ceremony but didn’t otherwise sniff an award.

JetBlue boasts a reasonably large and passionate fan base. TrueBlue went through some major changes allowing milestone awards in between status levels which is a notable shift, American Airlines did something similar.

But even if not all Delta participants are happy with the carrier charging a nosebleed high number of miles for partner airline redemptions, there are so many members that it’s surprising it wasn’t able to make a dent. The same for Southwest, and United as well. American has the largest frequent flyer program (115 million) and it won just a single category, losing to Aeroplan which has just 5 million members. Granted, only 16-23 million of American Airlines AAdvantage program members are active, but Aeroplan has members without recent activity too and remains dwarfed 3-5:1 assuming every Aeroplan member is active and fully engaged.

Perhaps the desire to participate in rewards programs in a meaningful way has been lost in the big programs. More and more frequent flyer miles are required, to earn elite status many programs have transitioned to a revenue based approach over distance flown. It’s possible that some travelers have lost that loving feeling especially as the value of redeemable miles continues to drop. Still, Alaska’s program offers a remedy to many of these ails but may be too small to move the needle.

I recall pre-pandemic walking through airports across the United States and seeing idle screens at gates asking members to vote for them in the awards. The question is whether it’s a lack of programs asking members to vote or if something else is afoot.

Are Participants Turning?

Around 9 million voters made their selections this year. Barely over 50% of voters were from outside the United States (the largest air market in the world) which is a huge transition. That, to me, suggests apathy.

For most Marriott members, I believe it is a lack of experience with programs outside of Marriott that leads to acceptance that this is what a program should be and that they all have Bonvoyed their customers. Hyatt has long been the best elite program once Starwood was folded into Marriott, that was Hyatt’s only true competition for elite benefits. Despite that, Hyatt hasn’t won all that often so maybe some elites have had it with Bonvoy.

I liked United’s Airlines PlusPoints move a few years ago, but the program has done nothing as of late and I have dropped from 1K status to general member. American Airlines sent out a status challenge to members of the program (I received one like most others) and I didn’t even take them up on it, depsite the ease of which American has made achieving elite status through purchases.

I don’t hold status with Hilton or Hyatt (though I am on a challenge with Hyatt which I am unlikely to retain) but I am not every voting member. Hotel stays, car rentals, have dropped for me but maybe not for others.

It could also be a reflection of less business travelers and true road warriors than before the pandemic. Delta reported that business travel is back to 85% of pre-pandemic levels, but I suspect that’s 85% of pre-pandemic revenue (when fares were lower than they are today.) Highly frequent business travelers are most likely to pay close attention to the program than more casual business travelers. We know that the higher tiers of elite status have suffered to recover across the industry and these are the most engaged in programs.

Conclusion

I was pleasantly surprised to see new entrants this year into stalwart categories. I was less enchanted with IHG’s One program but maybe I need to give it another look. I would enthusiastically welcome some voter pushback against the major airline programs. It’s a shame that Randy is stepping down, but in his words, “it’s time.” I’m grateful for the work he has done to advance this hobby and collection of points or miles that have changed my family’s life.

What do you think? Are these results expected? Is there a program you thought should have won but didn’t?