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A NEW FREQUENT FLYER DEVALUATION
By Joe Brancatelli
August 2, 2008 -- Here we go again. Another airline devaluing its frequent flyer program in the worst possible way.

Effective September 3, there will be restrictions on formerly unrestricted awards at Continental's OnePass program. Unless you're an Elite OnePass member, even Continental's most expensive awards (called EasyPass) will have capacity controls and will not be available on all flights.

So once again an airline has told you in the bluntest terms possible: There are times when the currency we've created is no good. It doesn't matter how much of it you want to use, I won't accept it.

As I said when Delta Air Lines pulled the same trick last year with SkyMiles, a currency that is only good on the whim of the issuer is worthless. Everything I said in that column about Delta now holds for Continental.

Even if you are an Elite OnePass member, you should react by clearing out your Continental account and flying some other carrier. If you are stupid enough to play in a program when the sponsor tells you that its currency is worthless, well, then, you get what you deserve.

What's odd about this, of course, is that Delta has just rolled back its policy of restricting all awards. As I explained in this week's Tactical Traveler, Delta is moving to a three-tier award system. The new third tier is much more expensive, but it is totally unrestricted and offers last seat availability on any Delta flight. You can examine Delta's new award charts here.

Now you might be inclined to the half-full analysis: Continental has decided to keep lower-priced awards, but restrict last seat availability only to elite flyers. Unfortunately, that analysis would be wrong. Continental has already raised the price of its awards, too. Last year, within days of Delta's decision to add restrictions to its formerly unrestricted awards, Continental raised its award prices. (I reported that in a Tactical Traveler item at the time.) So now, in fact, we have Continental offering the worst of all worlds: higher-priced awards and restrictions on them. Add in Continental's huge new OnePass fees for last-minute booking, redeposits and upgrades and it makes OnePass an awful program all around.

Of course, logic dictates that Continental--as well as all of the Big Six--will eventually adopt a three-tier award system. (Alaska Airlines actually beat Delta to the punch and announced its own three-tier a few weeks ago.) That will allow the airlines to offer last seat availability and no restrictions on its much-higher-priced awards and two tranches of cheaper, heavily restricted awards.

As Delta learned, that is the logical way to go to keep the programs consistent and viable. But just as Delta decided to screw customers first, then restore the value of their currency later, Continental has chosen to screw customers now and perhaps make amends later.

It's a deplorable state of affairs and reaffirms my comments in The Brancatelli File from three weeks ago: It's time to reassess our participation in these plans and make sure we don't let the airlines beat us to a pulp under the guise of "rewarding" our loyalty.

One last point worth noting: Word of this devaluation was first disclosed by a Continental employee who posts at FlyerTalk.com. According to him, you'll now have to look for EasyPass rewards in the "R" fare bucket in first and BusinessFirst class and M in coach. If you want to see Continental's less-revealing "official" notification and details of its new fees, surf here on Continental.com.
ABOUT JOE BRANCATELLI Joe Brancatelli is a publication consultant, which means that he helps media companies start, fix and reposition newspapers, magazines and Web sites. He's also the former executive editor of Frequent Flyer and has been a consultant to or columnist for more business-travel and leisure-travel publishing operations than he can remember. He started his career as a business journalist and created JoeSentMe in the dark days after 9/11 while he was stranded in a hotel room in San Francisco. He lives on the Hudson River in the tourist town of Cold Spring.

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This column is Copyright 2008 by Joe Brancatelli. JoeSentMe.com is Copyright 2008 by Joe Brancatelli. All rights reserved.