The rules of business show, again and again, that one company's mistake can be an incredible opportunity for competitors.
This had a chance to play out in the airline world when, in September 2023, Delta Air Lines (DAL) -) had to walk back controversial changes to its loyalty program that would have placed caps on airport lounge visits and required spending more to earn the status that would get one access in the first place.
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While Delta CEO Ed Bastian later admitted that the airline "probably went too far" and committed to at least a partial reversal, competitors had already swept in. By the end of September, JetBlue Airways (JBLU) -) offered to match the status travelers held with Delta while Alaska Airlines (ALK) -) took things one step further and offered to give status one tier above than what customers held.
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When other airlines are 'making it harder, we're making it easier,' Southwest says
The latest airline to see opportunities in another airline's blunder is the low-cost carrier Southwest Airlines (LUV) -). On Oct. 16, the Dallas, Tex.-based airline announced that it was bringing down the number of flights necessary to earn status with its Rapid Rewards program to 20 from 25 for A-List and 40 from 50 for A-List Preferred, respectively.
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In a statement to media outlets, Southwest's Marketing VP Jonathan Clarkson made a dig at "other programs [...] making it harder to achieve tier status."
"While I'd love to say that we're so nimble we did an immediate response, it just isn't the case," Clarkson said. "We've been working on this for a while. At a time when other programs, plural, are making it harder to achieve tier status, we're making it easier."
The changes come into effect on Jan. 1, 2024 and also include 1,500 qualifying points for every $5,000 spent on Rapid Rewards Premier, Priority, Premier Business, or Performance Business credit cards with Chase (JPM) -). Previously, cardholders needed to spend $10,000 to get the same points bonus.
'Loyalty above profits' marketing picked up by other airlines
As an alternative to reaching status by flying a certain number of flights, Southwest customers can also do it by collecting points — 35,000 for A-List and 70,000 for A-List Preferred. Smaller changes to the program include the ability to pay for food aboard one's flight with a combination of money and points (it was previously only one or the other) as well as an expanded selection of drink options for those in A-List Preferred.
All of this marks a completely different strategy from Delta, which had been observing lounge overcrowding and the rising cost of keeping them staffed and saw program cuts as a way to not have it seep into profits. But the airline did not anticipate the anger of customers who felt like they were being milked despite offering the airline their loyalty.
As such, the narrative of "loyalty above profits" has quickly been picked up by other airlines to win over disgruntled and frustrated customers. In a statement on the Southwest changes, Clarkson predictably reiterated "the core program values that our Customers know and love."
