WSJ Your Money Briefing - Frequent Fliers Are Fed Up With Loyalty Programs

Episode Date: January 23, 2025

Travelers are finding that tougher requirements and reduced perks aren’t enough to keep them tied to airline loyalty programs. Wall Street Journal reporter Jacob Passy joins host Ariana Aspuru to discuss what travelers need to know about flying as a “free agent.” The WSJ annual airline rankings are out now. See how the top nine carriers performed and which one finished 2024 on top.  Sign up for the WSJ's free Markets A.M. newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Air Transat presents two friends traveling in Europe for the first time and feeling some pretty big emotions. This coffee is so good! How do they make it so rich and tasty? Those paintings we saw today weren't prints. They were the actual paintings. I have never seen tomatoes like this. How are they so red? With flight deals starting at just $589, it's time for you to see what Europe has to offer. Don't worry, you can handle it. Visit airirtransat.com for details, conditions apply. Airtransat. Travel moves us. Here's your money briefing for Thursday, January 23rd.

I'm Arianna Aspuru for The Wall Street Journal. After airlines cut perks and raised requirements to travel with a high loyalty status, some customers are done with their loyalty programs. Upgrades are harder to come by these days. So if you are someone with a high level of status looking to get a cheap ticket and then get upgraded for free, that's not a given. People feel like they're not getting their money's worth like they used to. We'll talk with Wall Street Journal reporter Jacob Passe about what frequent flyers are

doing to save money after the break. In a darkly comedic look at motherhood and society's expectations, Academy Award-nominated Amy Adams stars as a passionate artist who puts her career on hold to stay home with her young son. But her maternal instincts take a wild and surreal turn as she discovers the best, yet fiercest, part of herself. Based on the acclaimed novel, Nightbitch is a thought-provoking and wickedly humorous film from Searchlight Pictures.

Stream Nightbitch January 24 only on Disney Plus. Fed up with the ever-changing rules around airline loyalty programs? Maybe it's time to become a free agent. Wall Street Journal reporter Jacob Passe joins me. Jacob, why are travelers getting tired of navigating the ins and outs of loyalty programs? For starters, a lot of the major airlines have changed up their loyalty programs in recent years. They've put a greater emphasis on how much you spend with the airline or on their credit cards rather than how often you travel. So for these like road warrior types who are traveling a lot for work and not necessarily booking themselves expensive tickets.

It's not as easy to climb that status ladder in these different programs. And then also the cost of travel is pretty expensive still. And they sort of say it's getting harder to justify that cost, especially to clients, if they're again traveling for business rather than seeing what's out there and where they can get cheaper airfare.

And how have those like sweet perks that first drew people in to these programs changed in recent years? One of the big changes we've seen comes with lounge access. A lot of airlines have had to reevaluate who they give access to, how they limit access, because lounges have become quite overcrowded in a lot of airports across the country. It's not uncommon at some of the major hubs to have to wait 30 minutes, an hour or so

to just get into the lounge. So if that's one of those perks that you're relying on, it's harder to come by. Also upgrades are harder to come by these days. The airlines themselves have been strategizing to get more paying customers into business class and premium economy seats. So if you are someone with a high level of status looking to get a cheap ticket and then get upgraded for free, that's not a given. And so when you start adding those factors up, people feel like they're not getting their money's worth like they used to.

The lounges, upgrades, points are all part of this allure of enhancing the experience of travel. Are people less interested in that? What my sources told me is there's this shift going on where people are increasingly viewing air travel more like a commodity. There's this idea that the experience really doesn't vary a whole lot from carrier to carrier, and there's more of an emphasis being placed on just getting to your ultimate destination and not worrying so much about how you get there. People would rather spend their money on activities

where they're headed to than spending money on a nicer flight. And when you start factoring that into decision-making around who you're flying with and whether you should have loyalty with someone, it gets harder to justify. Your reporting mentions an interesting generational shift where younger travelers are fueling this wave

of being status-free. Why is that? In general, we see less brand loyalty with the millennials and Gen Z-ers that cuts across different industries, but it's certainly the case with travel. They're less likely to sign up for these programs in the first place, let alone climb those tiers of status.

And so for them, it's much more about cost. They are going to go with the lower cost option. And so if that lower cost option isn't a carrier that they have status with, they're going to change allegiance. And cards like Chase Sapphire, Capital One Venture, Amex Platinum also offer enticing travel programs. What do they offer that airline loyalty programs don't? The big one is they offer flexibility.

So when you earn points or miles through Chase or Amex, you can use those with a variety of carriers, a variety of hotels, it's not just airlines, it's all sorts of travel providers. And so when you think about that, you're not locked into as restrictive of an ecosystem. So that's really appealing. And certainly you can combine those general travel cards with an airline card and take it a step further. There are more and more credit card branded lounges at airports across the globe.

And so those are becoming an option for folks and perhaps a less crowded option than the airline lounges. Are the companies noticing that people are looking elsewhere or just trying to figure out if this is still the best deal for them? They are aware of this. They will readily say that they are growing and adding millions of members every year

and seeing tons of engagement. But at the same time, recently when Delta announced changes, they ended up scaling back some of those changes in response to a blowback they received. I don't know that it's affected their bottom line just yet, but time will only tell. So before someone makes their next big decision about an airline loyalty program, what should they consider to make sure that it works for them? First off, look at the airport nearest you and the destinations you want to fly to. One of the travelers I spoke with, who's deciding to drop his status with one of the major carriers, has built a spreadsheet and he's going to be tracking his travel throughout the year and seeing where he gets the cheapest flights, who has the most direct flights for the destinations he wants to go to,

and is gonna use that as his basis. Obviously, if you live near a major hub, sometimes that makes the decision for you. But if you don't, it's good to run that analysis and keep track of those things and kind of reevaluate after a year or two and then see who it's worth building loyalty with. You should sign up for every program. I would never suggest to anyone that they don't join a frequent flyer program.

You're leaving money on the table. You're leaving points or miles on the table. So, definitely sign up for every program with every travel company you're spending money with. But definitely look to see who fits your lifestyle. And ultimately, it may just be that, that you might not travel into places where the loyalty makes sense. And for a lot of folks, it will make sense to just be a free agent. — That's WSJ Reporter Jacob Passe. And by the way, the WSJ's annual airline rankings are out.

It's linked in the show notes. And that's it for your money briefing. This episode is produced by Jess Jupiter with supervising producer Melanie Roy. I'm Marianne Espuru for The Wall Street Journal. Thanks for listening.