Northwest Will Sell You a Free Ticket for $100, Plus Taxes and Call Center Fees

Northwest has played follow the leader introducing a $15 1st checked bag fee on tickets sold beginning tomorrow for travel beginning >>. Elites and full fare passengers are exempt from the fee.

But they also dropped a bomb. They’re imposing “fuel surcharges” on all award tickets issued on or after September 15th. $25 for flights within North America, $50 transatlantic, $100 transpacific, $75 intra-Asia (unless travel originates in Hong Kong, in which case it’s $44), and $50 on all other itineraries.

Of course, fuel surcharges are just part of the price of a paid ticket and have nothing to do with fuel per se.

But just as I predicted in January, the allure of fees is just too compelling. Merger suitor Delta announced this sort of fee two weeks ago. They somehow believe it’s free money waiting to be picked up, that their members are invested in the program and of course you can’t really redeem your miles and get decent value out of them anywhere else. So customers are stuck, and there are tens of millions of dollars to be made here.

Only if other airlines somehow do not follow — hardly a trait to rely on in this industry — then they could have a real competitive advantage among members and that’s meaningful, not just because they’ll attract paying passengers when they’re needed most for the airline but because they’ll protect and enhance the value of their frequent flyer programs… which are the only asset making money for the airlines these days.

Remember the lesson I outlined several days ago: Fixed fees for award travel mean you shouldn’t redeem those miles for coach travel.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community Milepoint.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. The redemption in coach makes sense for those on ex-USA tickets, but for Canadians like myself, the “free tickets” are still a bargain compared to paying for coach.

    I recently flew YYC-BAQ (Colombia), on an open jaw, returning CCS-YYC. The cheapest restricted coach fare was around $1400 all-in. In the end the ticket cost me only 25,000 miles (well, I paid 30K but got 5K back when they bumped me into N class for one of my segments). Even if I’d have had to pay a $100 fuel schg, I’d still be farther ahead than shelling out $1400, which would only yield around 10000 miles at best accounting for elite bonuses.

    But, for those who don’t live in expensive markets, I’d agree with you – anyone redeeming 25K for an LAX-MCO holiday, for example, has rocks in their head. Even in my case, I’d never redeem for a short haul like YYC-LAX or something. Generally I try to get at least 5 cents per mile in value when redeeming, nothing less, and I always compare this 5 cent rate to that of the ticket price.

  2. Right, and with Northwest you’d need to be talking about (1) an expensive market and (2) in which NW was offering saver award availability…

    And my linked post never says never regarding domestic coach itineraries. But the general principle certainly works in most cases.

  3. Legacy airlines seem not understand the fundamental concept of a LOYALTY program. An airline will never get more loyalty than it gives.

    Many years ago, the airlines did a devaluation the correct way: old miles remained redeemable under the old rules and new miles fell under new rules. That was fair play. This is not.

    The legacy airlines are short-sightedly devaluing their FF programs to the point where a large percentage of today’s members will throw in the towel and switch to low-cost carriers. It’s the dumbest move I’ve ever seen them make, and doing it in slow motion isn’t fooling anyone.

  4. this basically confirms Northwest is now Delta’s lap dog and will follow …. but if you thought this was bad, just wait until Aug 15… thats when DL’s program revisions come out, which will essentially be forced on NW WP members when the takeover happens…

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