Hawaiian Air changes award structure; will the industry follow?

Last month, Hawaiian Air signaled a change in direction for its frequent flyer program with the announcement of a three-tiered award structure and one-way-only award tickets.

The move gives flyers three choices for award travel: “SuperSaver,” “Saver,” and “Anytime” (valued at 17,500, 25,000, or 35,000 miles, respectively). That opens the door for a la carte award ticketing—mix-and-match a “SuperSaver” for one leg, “Saver” for another, to complete an itinerary.

Our friends at WebFlyer.com write of the move, “Some have suggested that 2006 will be a big year for redemption offers like this, but most expected to see such changes come from the legacy carriers. Time will tell if competitor Aloha Airlines follows suit.”

FrequentFlier.com editor and SmarterTravel.com columnist Tim Winship, writing in his Frequent Flier Crier newsletter, says, “It remains to be seen whether the expanded categories translate into more award seats for a lower average mileage redemption. The one-way awards are an instant winner, however.”

Last night I asked Tim to evaluate the impact of Hawaiian Air’s move for the industry as a whole. There, the news may not be as good. “Hawaiian doesn’t have enough competitive clout in the marketplace to exert serious pressure on the major airlines to offer one-way awards,” he says. “So will they anyway? It’s very difficult to predict, because the airlines are deeply ambivalent about the issue. On the one hand, one-ways would enhance the programs to the extent that more members would be able to obtain more awards, at lower average cost. On the other hand, more award travelers reduce the airlines’ inventory of seats available for sale, potentially diluting revenue.”