While you’ve been racking up reward points to get to Cancun, there is something the airlines aren’t telling you: Paying with points instead of cash or credit might bump you from a flight.
When NPR reported that airlines use customer relationship management (CRM) to help them decide who gets bumped and who stays on-board a plane when flights are canceled or overbooked, I was surprised. I had no idea that airlines use CRM, nor did I realize the role a CRM number plays in reassigning passengers during a crisis, such as the Asiana crash in San Francisco July 6 or the Southwest Airlines LaGuardia incident on July 23. I had thought an airline would rank passengers by those with the most need or by who has been waiting the longest to be rebooked.
Instead, when disaster strikes and passengers are left waiting to reschedule flights, airlines use CRM to select which passengers’ needs are met first. The CRM assigns each passenger a number based how long it has been since the last flight was purchased by the customer, how many flights have been bought within a certain period and the profit the airline made from the ticket, according to Manu Agrawal, a senior business analyst at InterGlobe Technologies who had previously written on the topic of CRM. Also playing a key role in a customers’ CRM number is their involvement, or lack thereof, in the airline’s frequent flier program.
After the Asiana Airlines crash and as numerous flights were delayed or canceled, stranded passengers crowded counters trying to find alternate flights. But who got priority treatment on already-overbooked flights comes down to who has the better numbers.
“We slot people in based on their AAdvantage member status,” said manager of media relations for American Airlines Matt Miller.
One reason passengers who had already been confirmed on flights got bumped during the Asiana chaos was because so few flights were available to reroute them. Miller told me most airlines oversell their flights, but because people run late, change plans or miss their flight, overselling is usually a nonissue. But when flights get delayed or canceled, more people need to get on a plane, which is already booked to the breaking point. According to Miller, customers with nonrefundable flights (i.e., the cheapest ones) are often going to lose their spot on the plane before the passengers who bought a refundable fare. Among the customers who have a nonrefundable fare, those that paid with cash versus reward points will have a better chance of keeping their seat.
The Department of Transportation requires all airlines to keep track of denied boardings. According to the website: “If your ticket does not show a fare (for example, a frequent-flier award ticket or a ticket issued by a consolidator), your denied boarding compensation is based on the lowest cash, check or credit card payment charged for a ticket in the same class of service (e.g., coach, first class) on that flight.”
Translated, that means if you have bought your ticket with points rather than cash, you’ll probably lose your seat to someone who either paid for their ticket or to someone who is a frequent business traveler who spends quite a bit with the airline.
So what do you do to avoid the risk of losing your seat if there is a major incident? In an email, Agrawal advises, “The recent crash was a disaster scenario, where the airlines were pushed into a corner and had to bump customers who didn’t pay the full fare. Ninty-nine percent of the time, that does not happen. Personally, I do not care how much the airline values my purchase, if I am able to book it cheap or for free, [I will].”