Sun Country Airlines is overhauling its loyalty and credit card programme, as the airline progresses on an ongoing change of its business model to lower costs.
The Eagan, Minnesota-based airline says the changes will turn the programme, currently a loss-leader for the airline, into a contributor to its ancillary revenue stream. The updates will also help simplify the product, while incentivising travellers to sign up for its co-branded credit card.
Sun Country chief marketing officer Brian Davis tells FlightGlobal that the changes are part of the airline's recent move to focus on the price-conscious, infrequent leisure travellers that make up Sun Country's clientele.
The carrier will remove the first-class cabin from its Boeing 737-800s in a reconfiguration project, and began charging for carry-on bags and seat assignments earlier this year.
Davis says the changes to the airline's loyalty and credit card programme are in line with its efforts to build an airline catered more for those "sitting at the back of the airplane". Sun Country had previously pointed out that only about 44% of its 12-seat first-class cabin was sold at that fare level, with another 30% generating no revenue.
The airline eliminated its elite frequent flyer status almost a year ago. Most of the 300 members in that elite tier received the status without having to fly on Sun Country, says Davis.
Under the changes announced today, the carrier will improve the benefits for its co-branded credit card holders, while loyalty programme members without the card will earn points at a slower rate.
Sun Country's updated Visa credit card will offer more points from 2 January 2019 when customers book flights on Sun Country, with three times the points per dollar spent, up from two times currently. Customers who charge gas and groceries to the card will also start earning twice the points per dollar spent, with all other purchases earning one point per dollar spent.
Card holders will see changes in benefits when flying on Sun Country. While they are currently entitled to a free checked bag for their entire travelling party, the updated card will offer only priority boarding, a free in-flight beverage and 50% off bag and seat assignment fees.
Under the airline's frequent flyer programme, passengers will also see changes in how they earn and redeem points. Named Ufly, the programme will be rebranded Sun Country Rewards. Among the changes is a 36-month expiration deadline on points earned. Previously, points did not expire as long as there was account activity within the last three years.
Credit card holders, on the other hand, will not see their points expire as long as they continue to use the card, says Davis. They will also gain access to newly released flights 48h before they are made available to the public.
"Our credit card is the most valuable relationship," he says. "We want to balance that more, so the benefits of being a card holder reflect that."
Non-credit card holders will earn reward points at a slower pace under changes which will go into effect 3 November. Instead of receiving 10 points for every dollar spent with Sun Country, they will receive only two.
The airline will eliminate a two-tier system for point redemption, which had required more points when redeeming flights on peak travel days. Currently, points are converted at a ratio from 130 to $1 on peak days, and 110 to $1 on other days. Under the new system, points will convert at a rate of 100 to $1, regardless of travel date.
Separately, the carrier will begin winding down reward points pools, where up to 10 members can combine their points for reward travel. Existing pools will be dissolved by year-end, says Davis. The airline plans to relaunch pooling in 2019, but in a way that is geared more towards its brand and target customer, such as allowing family members to pool their points together.
"We are changing out some of the core software to relaunch as a family pool product which is totally on-brand. For example, a family of five might go to Cancun and back, and they could pool their points to fly Grandma to visit them for Christmas," says Davis.
Sun Country in the recent year has embarked on a cost overhaul under the leadership of former Allegiant Air executive Jude Bricker. Davis declines to specify how the changes to the airline's reward and credit card programme will increase revenue for the airline, which is privately owned and was sold to a private equity fund earlier this year after years of family ownership.
The airline currently has 300,000 active members on its frequent flyer programme. It declines to specify the number of credit card holders, citing its agreement with the card's issuing bank.