LifeMiles, the loyalty program from Colombian carrier, Avianca issued an email this week to reassure members that their miles are safe. But are your LifeMiles safe? I’m not so sure and, clearly, neither is Avianca.
Matthew has covered a number of issues that the merged airlines under the Avianca flag have encountered over the last few years. Most recently, Avianca Brasil has shut down entirely and the principal shareholder who maintained a considerable stake in Avianca (Colombia) leveraged his ownership to satisfy debt obligations for which he has defaulted. Those shares were sold to United and there were questions as to what United would do with their ownership stake in Avianca (Colombia).
It’s a mess.
Avianca in its own right is profitable.
LifeMiles is Separate from the Airline
Like Aeroplan, the loyalty program utilized by Air Canada, LifeMiles is a separate entity from the carrier. That makes sense to a certain degree. The program is certainly its own business and arguably a more successful one than the airline. The carrier does fine but loyalty program, known for selling their miles with 100-140% bonuses (buy one get one and half free essentially) does well as the liquidator of Star Alliance.
Can LifeMiles Stay Insulated From the Mess?
I have a pair of concerns regarding LifeMiles which I have purchased and earned through credit cards. First, is that if the turmoil from Avianca spills into the loyalty program I could lose my investment (from purchased miles) and the trips I won’t take.
Additionally, I am concerned that if the program were to separate fully from the carrier, the ability to redeem for star alliance travel would drop. American Airlines has stated that they need to fly planes in order to sell miles, the profitable aspect of their business at this point. Unlike Aeroplan, for example, American believes the two are inextricably linked and I agree.
“American argues that you can’t entirely separate out passenger carrying from loyalty revenue, because they would not be able to earn the loyalty revenue without having an airline.”
Reassuring Email Simply Raises More Questions
Lifemiles sent out emails to members this week to reassure them that the struggles of Avianca Brasil, the management changes at Avianca, and all of the noise around the carrier had nothing to do with Lifemiles:
While I understand the intent of the email it also caused me to look up Avianca Brasil because I knew there was turmoil but had not realized they were fully out of business. In fact, just last week their slots in Brazil were scheduled for auction, demonstrating that there is no possible way the airline finds a way to come back and serve customers.
Avianca’s turmoil may or may not bleed over to LifeMiles, but regardless I will expedite the use of my miles and halt any future purchases of their miles. I will continue to fly Avianca when the opportunity arises, we enjoyed our trip to Cartagena from Miami on the carrier. But nonetheless, their email to satiate fears activated mine.
What do you think? Were you set at ease by the LifeMiles email? Will you buy more in the future given the turmoil or avoid the carrier?