Mini Case Study 3 - First Class Upgrade:

Why don't airlines take advantage of opportunities to reward their loyal customers?

Why do you think airlines use blackout dates for mileage redemption?

What do you think of the phrase "trying to be loyal"?

Was the upgrade a good idea? Why or why not?

Tim Wilson travels quite a lot. He averages at least one flight per month; about half of his flights are for business and the other half for personal reasons. His wife also travels at least five or six times a year, sometimes with Tim. They are a very sophisticated couple in their 40 s who have seen most of the United States and have visited quite a few foreign countries. Together, they generate approximately $5,000 in fares per year. Tim has been a loyal member of one airline's frequent traveler program for more than ten years and has acquired Platinum status. The primary benefit of this status is that he can avoid the long wait at check-in by using the firstclass line. This can save hours in large airports such as Chicago O'Hare or Miami International. He also has a bank credit card that allows him to accumulate airline miles, and he charges most purchases using the card. He cashes in his accumulated miles for flights whenever possible, but he is often frustrated because of the blackout-date policy of the airline. One thing that he finds particularly puzzling is that he is often denied the ability to use his accumulated miles for particular flights, for which he subsequently purchases a ticket, only to find out that many seats on the flight are empty. Recently he has flown on another airline on occasion because his primary airline has cut back on flights due to increased competition and efforts at cost cutting. Even though he is trying to remain loyal to his primary airline, he is finding it more difficult to do so. On one occasion Tim had arrived at the airport a bit later than usual as a result of heavy traffic. He was unusually stressed because of the rush and because he was making a major presentation to a large industry group later that afternoon. Fortunately, his Platinum status allowed him to check in quickly at the main ticket counter. When he finally arrived at the gate, he was told that the departure time was delayed approximately 40 minutes, so he decided to have some breakfast. Tim went to a restaurant three gates down the concourse and ate while reading the morning paper. Approximately 30 minutes later he returned to the gate and noted a sign stating that the flight would begin boarding in 10 minutes. He took a seat in the waiting area and continued to read his paper. An announcement over the loudspeaker jarred his reverie, and he was surprised to hear his name called. The message was then repeated, and he was requested to come to the check-in desk near the entrance to the gate. Assuming the worst, Tim gathered his luggage and approached the desk, where several passengers had gathered. He waited his turn and then explained that his name had been called and he wanted to know why. The desk agent asked to see his boarding pass and identification and then asked Tim if he would like a first-class upgrade. Immediately, Tim was suspicious. He inquired whether he would need to cash in some dividend miles, and the desk agent replied, "No, we have some vacant seats in first class and wanted to reward our loyal customers with the upgrades." Tim was stunned. In all of his years of traveling on this airline, this was the first time that this had happened, yet often he had seen first-class seats go unoceupied. He was not sure whether this was a new company policy or whether an employee had simply taken the initiative, but when he took his seat in the first-class cabin, he thought it was a great idea. 1. Why don't airlines take advantage of opportunities to reward their loyal customers? 2. Why do you think airlines use blackout dates for mileage redemption? 3. What do you think of the phrase "trying to be loyal"? 4. Was the upgrade a good idea? Why or why not