Hawai­ian among air­lines of­fer­ing flier mile pools

Honolulu Star-Advertiser - - MONEY - By Ron Lieber

It is nearly a given in the world of loy­alty pro­grams that things can only get worse. Ev­ery change that a travel com­pany or a re­tailer refers to as an en­hance­ment, it seems, will ac­tu­ally mean that you earn fewer points, need more of them to earn re­wards or have less flex­i­bil­ity in re­deem­ing them.

So let us pause to con­sider an unheralded ef­fort at a few of the smaller air­lines that helps cus­tomers earn free seats many times faster than they used to, and with­out charg­ing them for the priv­i­lege.

Known var­i­ously as pool­ing or shar­ing, the pro­grams al­low cus­tomers of Hawai­ian Air­lines, Sun Coun­try Air­lines and Jet-Blue Air­ways to give their fre­quent-flier miles to oth­ers or team up with a group to get a free ticket faster. Fam­i­lies, for in­stance, can com­bine all their miles so that a four­some can earn a sin­gle free ticket much more quickly. And chil­dren who might take five or 10 years to earn a free trip on their own through once-ayear flights can con­trib­ute to a joint ac­count that helps the fam­ily save money sooner.

Amer­i­can, Delta, South­west and United of­fer noth­ing of the sort for the mo­ment. To fig­ure out why — and whether it might ever change — con­sider the de­tails of the smaller car­ri­ers’ of­fer­ings.

Hawai­ian Air­lines’ Share Miles pro­gram came first, in 2001. While par­tic­i­pants can give as many miles as they want to any­one they would like, the re­cip­i­ent has to have a Hawai­ian co-branded credit or debit card and be the pri­mary card­holder.

In 2013 Sun Coun­try started of­fer­ing point pools. The air­line, which has many sched­uled flights be­tween Min­neapo­lis-St. Paul and warm-weather lo­ca­tions, al­lows up to 10 peo­ple to form a pool and con­trib­ute some or all of their points.

Larry Ch­estler, ex­ec­u­tive vice pres­i­dent for busi­ness devel­op­ment at the air­line, has worked for big­ger car­ri­ers and con­trasted his op­er­a­tion with those at com­pa­nies that fawn over fre­quent busi­ness trav­el­ers.

“We are a very leisure-ori­ented air­line,” he said. “Our in­ten­tion in cre­at­ing pool­ing was to rec­og­nize that a lot of leisure travel in­volves fam­ily, and some­times it’s not very fre­quent. It’s ac­knowl­edg­ing a dif­fer­ent kind of loy­alty.”

Jet-Blue, the big­gest of the three car­ri­ers that fa­vor free shar­ing, also does big busi­ness in warm-weather leisure mar­kets. Its fam­ily pool­ing ser­vice al­lows up to two adults and five chil­dren to pool, though the air­line said it might ex­pand the num­ber of adults at some point.

When Jet-Blue be­gan al­low­ing pools three years ago, it was also quite ex­plicit in telling cus­tomers that they could de­fine “fam­ily” how­ever they wanted. Sig­nif­i­cant oth­ers, best friends — any­one was wel­come.

“We didn’t want to be pre­scrip­tive,” said Scott Res­nick, the air­line’s di­rec­tor of loy­alty mar­ket­ing. “Who are we to know? I can’t pre­sume to know what your fam­ily looks like.”

Schem­ing par­ents might see the pools as a ter­rific way to con­fis­cate their chil­dren’s miles, bring in rel­a­tives to baby-sit and fly off free on their own. Noth­ing wrong with that. The car­ri­ers re­port other com­mon uses, too: grand­par­ents and grand­chil­dren team­ing up, or par­ents us­ing pooled points to fly col­lege kids to school and back.

So what is the case for mile-hoard­ing self­ish­ness among the big­ger car­ri­ers?

When peo­ple with­out a lot of miles give up on col­lect-

ing or track­ing them or try­ing to cash them in, it can be a highly prof­itable event for an air­line. Af­ter all, if it sold some of those miles to a third party that then awarded them to its own cus­tomer, the air­line would never have to re­deem any­thing and would keep the pay­ment for the miles even if that cus­tomer gave up on the loy­alty pro­gram. Any pool­ing pro­gram has the po­ten­tial to re­duce the aban­don­ment of loy­alty points, since shar­ing makes them eas­ier to re­deem.

Jet­Blue and Sun Coun­try, how­ever, said they hadn’t seen much change in this “break­age,” as it’s known in the in­dus­try. This might be be­cause only a small num­ber of peo­ple are find­ing their way to the pool­ing pro­grams, or they might be the sort of peo­ple who never would have aban­doned their miles in any event.

More­over, Amer­i­can, Delta, South­west and United all hap­pen to have pro­grams in place that al­low peo­ple to trans­fer miles for a fee. These air­lines are prob­a­bly re­luc­tant to give up that rev­enue.

Delta does al­low elite mem­bers of its fre­quent-flier pro­gram to share in other ways, by up­grad­ing a travel com­pan­ion when space is avail­able and by let­ting top-tier cus­tomers grant a year’s worth of elite sta­tus to one per­son each year. And many air­lines al­low peo­ple to do­nate ran­dom lots of miles to char­ity or spend them on sub­scrip­tions. For just 3,200 Amer­i­can miles, you can get 304 is­sues of The Wall Street Jour­nal, for in­stance. That’s $32 if you value each mile at a penny, a frac­tion of what the news­pa­per costs on its own web­site.

So there are plenty of easy ways to get at least a lit­tle value out of your miles and points, and no need to throw up your hands and or­phan them. But in­fre­quent trav­el­ers who want the stan­dard free trip will con­tinue to have a tough time earn­ing one just by fly­ing the ma­jor air­lines.

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