For as long as I could remember, Avianca has offered a bonus to buy LifeMiles. But I haven’t seen one in a while, is the sky falling?
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Avianca LifeMiles Usual Bonuses
Avianca, the Colombian flag carrier, operates the LifeMiles loyalty program. Many carriers run promotions to move miles and put cash in the bank. Unlike the rest of the market, LifeMiles is the most aggressive in the business nearly continually offering bonuses for 100% or more, sometimes up to 150% bonuses once or twice annually.
This reduces the cost from $33/1,000 miles to $16.50/1,000 miles, or even $13.20/1,000 points. Why is that important? Because Avianca LifeMiles account holders have access to Star Alliance awards on great carriers for a dramatic discount.
Some have called Avianca LifeMiles the new Star Alliance consolidator.
COVID-19 to Blame?
The obvious first answer would be that COVID-19 is somehow to blame. Airline activities have been restricted, sales are dire and it’s unclear when travel will resume as normal.
The problem is that I can’t really see why Avianca wouldn’t sell LifeMiles at their best rates ever, or at least at the bonus levels they have done so in the past. Many other carriers are selling miles and even future vouchers at multiples to secure cash now for tickets flown/sold later.
It would seem that LifeMiles should be leading the charge to get cash in the door and passengers on planes in the future.
Is Bankruptcy Affecting Marketing?
LifeMiles was weathering a bankruptcy prior to the coronavirus crisis. In fact, in 2018 United Airlines guaranteed a loan from a wealthy businessman (Efromovich) with Avianca stock used as collateral. When he defaulted, United secured the shares. United, who offer purchase promotions on Mileage Plus miles but never to the level that Avianca offered, may put some pressure on the carrier to pull back the reins some.
Avianca sent out several emails when the bankruptcy process began, assuring guests that the company and LifeMiles program would continue on undisturbed as the company’s debt was re-organized. It’s possible that bankruptcy attorneys and trustees have restricted sales of miles, not fully understanding just how much the sale of LifeMiles was crucial to the program.
It’s also possible that caretakers of the business do not want to further injure the public should the company fail to restructure, opting to avoid adding obligations the company cannot deliver. But that wouldn’t explain why the carrier is permitted to sell travel with existing miles or for cash for flights well into the future.
It’s confusing to me that a company in dire straits (if legally permitted to do so) wouldn’t sell their miles at least as cheap as they have in the past. It’s not “sour grapes” that the carrier isn’t running a fire sale, I have plenty of LifeMiles and still haven’t chosen where and when to spend them. Rather, it’s surprising to me that with just about every other carrier and hotel chain offering incentives to bring cash in the door for future travel, that Avianca, usually the most voracious of them all, has sat this one out.
What do you think? Is the carrier unable to offer promotions on their miles due to bankruptcy? Is there some other reason I haven’t considered that explains the carrier’s pullback from normal marketing activity?