The Loyalty Security Association's Silvia Nijhoff on the Committee on Climate Change's proposals that airline loyalty points should be phased out to reduce emissions
The context of the question pertains to the Committee on Climate Change (CCC) report and recommendation that suggests limiting loyalty programmes will lower emissions by airlines because it will cause people to fly less, or at least discourage frequent fliers to “take trips merely to maintain status”.
First off, the report also suggests taxing airline tickets more, in such a way frequent fliers are hit with higher fees compared to the occasional holiday-goer. How would you make that discernment? They also make the claim that since 15 per cent of the UK population flies 70 per cent of the time that they must be sufficiently affluent to carry that tax burden.
However, most of these flight movements are for work. The committee even contradicts itself by suggesting the taxation should happen on miles flown over three years, not the number of flights taken. This to discourage the leisure traveler from choosing more damaging long-haul flights. Furthermore, they say flights for work would not count towards the tax.
The CCC does get something right in the report other governments and climate organisations should take heed of; it talks about “emissions”, not just CO2 as many do. Airplanes also emit NOx and H2O(g), which both contribute to environmental issues (or CO2 + H2O + NOX + SOX + soot + CO + HC + N2 + O2 in tank-to-wake emissions, if you want to get specific (Dr. Jim Hileman, Fuel Composition and Aircraft Emissions. Office for Environment and Energy, FAA).
Suggestions are to now list “emissions” with flight information so travellers can offset it by paying it off. Certain airlines take just the CO2, some take the CO2 value and double or triple it to cover “other emissions beyond CO2” without a proper calculation. Some airlines have already been offering travellers an option to offset this by paying a fee.
Various companies offer varying calculations of the CO2 for the same flight. If option A says a flight to Bangkok in Economy is 1.3 tonnes of CO2 but option B says it is five tonnes; that’s a big difference. You may think it's because they took into account the type of aircraft, but that’s usually not the case. Even if the tonnage is the same – let’s say the five-tonnes of CO2 – some companies say you would have to pay £50, whereas another may charge £150. What are the regulations for calculating the emissions and the tonnage and offset price? There is no consensus.
The European Commission also commissioned research of emissions offsetting for efficacy multiple times. The German Öko-Institut researched 5,500 compensation projects. In just 2 per cent of the cases, it was “probable” that the impact calculations were correct. In 85 per cent of the cases it was deemed “unlikely”. The few that got it right would have saved those emissions even without the compensations. In one study it actually came to light that offset schemes led to an increase of emissions (Carbon Market Watch, 2017).
Back to miles and frequent fliers – Rob Burgess from Head for Points probably brought the conflation of frequent flyers and loyalty programmes as environmental bad guys most succinctly: out of the whole 81-page report of the CCC, six sentences were spent on the impact of frequent flyer schemes. There were four pages about aviation, but only six sentences about this.
The biggest issue the CCC brought forward was that frequent flyers would be making unnecessary trips to maintain miles or elite status. Miles can be used to book flights, or to “buy” things other than flights. Status gives you perks such as upgrades (yes, you can also use miles), luggage allowance, lounge access and such. If you must travel for work, wouldn’t you want to be comfortable? Some companies pocket the miles for the corporate account, leaving the flying worker with the status. Do we want to penalise this person? Are there people that do mileage runs? Yes. Though these days most will do it for the elite status more than the miles. Why? Because these days you can earn miles without flying.
Most people earning miles do so with their credit card, for instance using a co-branded card to buy groceries and petrol in the hope that will earn them that holiday, or let them buy the upgrade. By aiming at a loyalty programme, you would be hurting the “occasional holiday traveller”. And if you believe that the frequent flier is so affluent, getting rid of the programmes, or the free flights for miles, is hurting the occasional traveller more.
The affluent will fly, frequently or not. I worked with an airline that had to discontinue its loyalty programme due to the costs of it being higher than the benefits (of bringing more passengers). The occasional traveller that had saved miles for years to earn that one big trip was more upset than the work traveller with Diamond status. The work traveller knew they’d still be travelling. Could you phase out aviation loyalty points? Yes, but it wouldn’t be pretty. It wouldn’t do what the CCC thinks it might. It won’t make that much of a difference for emissions.
Silvia Nijhoff is marketing executive at the Loyalty Security Association