Reflections on the Freddies

The 26th Annual Freddie Awards, presented April 24 at the Museum of Flight in Seattle, highlighted what frequent travelers deemed excellent service while also bringing up several facets worth further discussion.

The awards recognized loyalty programs offered by airlines and hotels in five categories each, across three regions of the world, as well as one affinity credit card in each of the three regions. Winners were determined by approximately eight million frequent travelers who chose to vote for their favorite airline and hotel loyalty programs, a fact event organizers were careful to point out.

“We’re not giving you any awards; you’ve earned those awards,” Gary Leff, master of ceremonies and co-founder of said. “I’m simply offering the thanks that your customers have for the good things that you’ve done over the last year.”

While each category had its winners and losers it was noteworthy that, in many cases, the winners and losers were separated by a razor-thin margin.

“If you look closely at some of the results, it was down to four one-hundredths of a [point] difference between first and second [places]; they were very, very close,” Randy Peterson, founder of the Freddies and editor of InsideFlyer magazine, told me after the awards presentation.

Statistically speaking, that’s a dead heat.

Petersen cited a couple of take-home messages from voting that close.

“In the Americas, there were no clear favorites; nobody won everything, so there’s a lot of parity within the industry out there which means it’s always up for grabs,” Peterson said.

“Customers are very finicky,” he added. “Every day, each program here has to earn these awards.”

While American Airlines (NYSE:AAL), Southwest Airlines (NYSE:LUV), and Columbian airline Avianca divided top honors in the airline categories for the Americas region, other airlines were named as finalists.

However, conspicuous by its absence was United Airlines’ (NYSE:UAL) MileagePlus program, a fact that didn’t surprise Peterson.

“If you look at other types of reports – quality reports, on-time stuff – they’re still down at number six or seven,” he said. “They’ve got a long way to go.”

Another facet worthy of note is the recent change that Delta Airlines (NYSE:DAL) announced it would be making to its SkyMiles® program, moving from a mileage model to a revenue model for flights after January 1, 2015.

While Delta’s plan to move to a revenue model garnered a fair bit of criticism, that approach seems to have been well accepted by customers of Virgin Australia Airlines; its Velocity frequent flier program swept the airline categories in the Middle East and Asia/Oceania region.

“I think that’s the trend: rewarding customers based on what their spend is on the airline rather than using fare classes as a proxy for spend,” Tom Alberts, airline partnership manager for Velocity, told me. “I think that’s the model that airlines eventually will go to across the board.”

In the interest of accuracy, Velocity is actually a hybrid program. Within Australia, the program’s rewards are based on points per dollar spent; internationally, it is distance-based.

What will the future hold? As always, that is difficult to predict but there is little question that recent activity within the industry will play a part in future outcomes.

American Airlines, whose AAdvantage Program® won both Best Elite Level and Program of the Year for the third consecutive year in 2014, recently merged with US Airways, a move that could affect American’s winning streak.

“US Airways [Dividend Miles plan] doesn’t ever make the top four,” Peterson said. “Once they blend those [programs] together, will that hurt American Airlines … or [will they] really hit it out of the park and win a Freddie award for both membership groups?”

Stay tuned. The 2015 Freddie Awards, which will be presented in Atlanta, are less than a year away.

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