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Frequent Flyer Programs Are A Scam (Opinion)  
User currently offlineN62NA From United States of America, joined Aug 2003, 4447 posts, RR: 6
Posted (1 year 9 months 3 days 14 hours ago) and read 6399 times:

Not MY opinion, mind you, as I belong to AA's and find it to be excellent.

Frequent flier programs are like pyramid schemes in at least two important ways: First, only a few people at the top of the scam benefit in any meaningful way. You see these elite-level cardmembers perched in their first-class seats, sipping their mimosas, while the rest of us do the perp walk to the back of the plane, where we wedge ourselves into those ridiculously small economy class seats.

And second, many of those elite program apologists will do anything to defend the system that has rewarded them, the chosen few who excel at the mileage game. They argue incorrectly that loyalty programs are good for anyone. When that line of reasoning fails, they backtrack and claim that if you're a frequent traveler, you'll benefit by belonging to their little club (also almost always wrong). Finally, when they're cornered, they resort to ad hominem attacks against anyone who criticizes their beloved frequent flier programs.


http://www.linkedin.com/today/post/a...should-quit-yours-now?ref=linkedin

24 replies: All unread, jump to last
 
User currently offline777STL From United States of America, joined Dec 2004, 3608 posts, RR: 3
Reply 1, posted (1 year 9 months 3 days 13 hours ago) and read 6399 times:

It sounds like someone was doing a little investigative reporting on Flyertalk and didn't like the reception they received.

I've been in AA's program now for seven years, I've flown F to Hawaii twice, F to NRT, and various other trips. I got most of these miles by taking advantage of promotions and credit cards, not from flying, so in short, if I can do it, anyone can do it.

I fail to see how it's a pyramid scheme or a scam, and no one is forcing you to participate. It's very much a game, and if you don't want to play it, don't begrudge those who do. I don't see how participating in a loyalty program is going to hurt as the author seems to insinuate. (Don't hate the player, hate the game....)



PHX based
User currently offlineCM From , joined Dec 1969, posts, RR:
Reply 2, posted (1 year 9 months 3 days 13 hours ago) and read 6399 times:

To argue that FF programs are a "scam" or in some way like a "pyramid" is truly ridiculous. The key difference between any FF program and a pyramid is this:

---Nothing prevents a new member from becoming the top individual in the program---

The person who wrote the piece may hate being at the bottom, but the people a the top have spent hundreds of thousands (if not millions) of dollars with the airline... they have essentially bought their place at the top.

Still, you don't have to be at the top to have a good experience and this one person's opinion may have been influenced by a bad experience with one single program. That's too bad, because FF programs are not at all the same between carriers. I am a very low tier member in a couple programs (DL & KL) and, mid-level in another (AA) elite tier in a couple others (AS, BA & UA) and find them all very different.

Despite having Gold status on BA, I find the Executive Club program to be terrible for booking reward flights. If award flights are available at all, the fees put the award ticket very close to the price of a discounted economy fare. I also rarely get upgraded on BA flights when flying full fare, despite my status. On the other hand, I do find the BA program excellent for booking award hotel stays and cars using my Avios.

In contrast, I am perpetually upgraded on UA (Premier 1K status) on both domestic and international flights, and find booking MileagePlus award flights very easy and they cost almost nothing ($5 to $10, usually).

On AA, where I have minimal status (Platinum), I can almost always find award tickets, although I never get upgraded.

In any case, none of the programs are a scam and they certainly do not resemble pyramids in any way, shape or form. Finding the right program (even within carriers in an alliance) is critical to having a good experience. I now put all my One World flights on AA or AS, simply based on past experience trying unsuccessfully to cash in on my BA miles.


User currently offlineAustrianZRH From Austria, joined Aug 2007, 1384 posts, RR: 0
Reply 3, posted (1 year 9 months 3 days 13 hours ago) and read 6399 times:

The European and Asian FFPs are much more of a scam than the US ones. Simply because they charge that ridiculous "fuel surcharge" on your award ticket. Meaning, my long haul ticket in Y booked on LX Miles and More ZRH-FRA-YYC-YXY // YVR-LHR-ZRH set me back almost 600 Swiss Francs (about 670 USD) in "taxes and fees". As the flights at my desired dates had very high fares, it still was a good deal for me, but to "normal" US destinations such as NYC, ORD, LAX, SFO an award ticket in Economy is a waste of miles because you can have it for either 800 Francs paid or 60,000 miles plus 550 Francs in "taxes and fees". That's why I'm saving on a biz ticket now  .

Of course, you could always switch to UA or US, but as I collect quite some miles on promotions such as fuel, supermarket, credit card, etc, it's still the better choice to stick with M&M for me...



WARNING! The post above should be taken with a grain of salt! Furthermore, it may be slightly biased towards A.
User currently offlineUnited_fan From United States of America, joined Nov 2000, 7482 posts, RR: 7
Reply 4, posted (1 year 9 months 3 days 13 hours ago) and read 6399 times:

I've been with UA 12 1/2 years. I don't fly more than 2 x a year. I've flown free (or close to it) 3x . My last flight in April was a free one . I was bumper to a later flight and got a $200 voucher. So I made out okay!


'Empathy was yesterday...Today, you're wasting my Mother-F'ing time' - Heat.
User currently offlineDeltaMD90 From United States of America, joined Apr 2008, 7867 posts, RR: 52
Reply 5, posted (1 year 9 months 3 days 13 hours ago) and read 6399 times:

Quoting N62NA (Thread starter):
Frequent flier programs are like pyramid schemes

This guy doesn't know what pyramid schemes are obviously

Quoting N62NA (Thread starter):
And second, many of those elite program apologists will do anything to defend the system that has rewarded them, the chosen few who excel at the mileage game. They argue incorrectly that loyalty programs are good for anyone. When that line of reasoning fails, they backtrack and claim that if you're a frequent traveler, you'll benefit by belonging to their little club (also almost always wrong). Finally, when they're cornered, they resort to ad hominem attacks against anyone who criticizes their beloved frequent flier programs.

Wow, what a professional, well-thought out analysis.

Just some guy ranting, QQ cry me a river

(Not you N62NA, the author)



Ironically I have never flown a Delta MD-90 :)
User currently offline817Dreamliiner From Montserrat, joined Jul 2008, 2291 posts, RR: 1
Reply 6, posted (1 year 9 months 3 days 13 hours ago) and read 6399 times:

I read this article the other day, had quite a laugh with this article! Im part of two FF programs, AA and BA so far, both in my opinion are decent programs and even though im low tier, I still got a free double upgrade with BA from Y to J class on a long haul flight in September. Generally, I dont have any real complaints with both programs, though I wish AA had a longer limit on miles expiration.


Reality be Rent. Synapse, break! Vanishment, This World!
User currently onlineNZ107 From New Zealand, joined Jul 2005, 6413 posts, RR: 38
Reply 7, posted (1 year 9 months 3 days 12 hours ago) and read 6401 times:

Haha good laugh. I know someone who will be UA 1K at the end of the year from spending about US$2500. I can tell you now he's been upgraded many times, managed to get me upgraded too. Then you get to the awards side of it and there were deals (better availability with higher status) that I was simply rolling on the floor laughing about because they provided so much travel for such a bargain.


It's all about the destination AND the journey.
User currently offlinedc9northwest From Switzerland, joined Feb 2007, 2279 posts, RR: 7
Reply 8, posted (1 year 9 months 3 days 9 hours ago) and read 6401 times:

Well, in that case, I sure am glad the airlines have started to scam people. I benefit quite a lot from these scams. Upgrades, free checked baggage in the USA, seats with more legroom for free, priority in rebooking if something goes wrong.

Frequent flyer programs are, in fact, the best scams in the world!

But, you have to work for these benefits; they don't come cheap, nor do they come always!  


User currently offlineBE77 From Canada, joined Nov 2007, 455 posts, RR: 0
Reply 9, posted (1 year 9 months 3 days 9 hours ago) and read 6401 times:

I figure there is no way it could be a scam, and, I present as proof...me.
If it were a scam, past experience has shown that I would get no benefit at all, and I would be feeling like I had been hosed.
Since I have had had two (almost) free trips this year, have been upgraded maybe 8 times, and get the various perq's like early boarding and no lineups, exactly like I was promised if I flew x miles, then I have to think that it is not a scam.
Of course, as mentioned by several, you occasionally have to play the game carefully to get what you want, but the rules are pretty clear on the two airlines I mostly use.



Tower, Affirmitive, gear is down and welded
User currently offlinejetblueguy22 From United States of America, joined Nov 2007, 2781 posts, RR: 4
Reply 10, posted (1 year 9 months 3 days 6 hours ago) and read 6388 times:
AIRLINERS.NET CREW
HEAD MODERATOR

Boy if they are a scam I'm making out by doing not much of anything. Airlines make it easy for anybody to get miles. Last year I got 5000 miles just buying flowers for birthdays and the occasional screw up on my part. Rental cars, boom miles. Hotels, boom miles. Sure the elites get better rewards, but they earn them. If someone only fly 8000 miles a year the airlines don't have a reason to reward them. Meanwhile the guy in 2B who spent 1200 dollars on his ticket and flew 150,000 miles this year does deserve it. Hey it's just my opinion, but someone thinking they deserve benefits all because they bought a single ticket seems silly.
Blue



You push down on that yoke, the houses get bigger, you pull back on the yoke, the houses get bigger- Ken Foltz
User currently offlineQuokkas From , joined Dec 1969, posts, RR:
Reply 11, posted (1 year 9 months 3 days 6 hours ago) and read 6381 times:

I have been fortunate with my membership. I get the usual things like priority check-in and boarding, extra baggage allowance and lounge access and have been able to upgrade to a higher cabin class. I actually prefer to use miles to upgrade a revenue ticket as the flight continues to earn miles while a reward ticket flight doesn't. However I can see that some might be frustrated by not being able to access reward seats or upgrades.

Frequent flyer programs have, in a way, become victims of their own success with too many members chasing too few seats. Members focused on "the reward" forget that the airline still has to at least cover their costs and preferably make a profit on each flight. Sure, filling a seat with a 'reward' passenger reduces the points/ miles liability but it doesn't gain extra revenue.

As to the linked article I do believe the author raises one valid though unclearly stated point: read the terms and conditions before signing up to any credit card linked to a frequent flyer program. It may have a higher annual membership fee and/ or interest rate than another credit card. Caveat emptor. If you think the benefits outweigh the costs, go for it.


User currently offlineViscount724 From Switzerland, joined Oct 2006, 25107 posts, RR: 22
Reply 12, posted (1 year 9 months 3 days 4 hours ago) and read 6356 times:

Quoting AustrianZRH (Reply 3):
The European and Asian FFPs are much more of a scam than the US ones. Simply because they charge that ridiculous "fuel surcharge" on your award ticket.

FlyingBlue (KL/AF) eliminated fuel surcharges on award tickets within Europe (including Israel and North Africa) last June. You now only pay government/airport taxes/fees.


User currently offlineinfinit From Singapore, joined Jul 2008, 555 posts, RR: 1
Reply 13, posted (1 year 9 months 3 days ago) and read 6308 times:

Well I think calling it a scam is a long stretch. They're Marketing, particularly Promotion, tools. Just like that loyalty card you get at Starbucks or Subway. Not sure if these franchises do that in the US.. they do in Singapore.

The basic concept in all is the same. Using the example of Starbucks, they give you points for transactions you make purchase 5 coffees and you get your 6th free. So in the marketing budget this translates to a 1/6= 17% discount with every 6th transaction. Also, with your Starbucks card, you're more likely to want to get your coffee there rather than at competing chains which in Singapore would be The Coffeebean and The Connoisseur Concerto. You'd too this to make the most of the free coffee offer.

Clearly, this form of promotions work really well in many different industries.

To the advertiser/brand, it retains customers, they keep coming back.. It builds brand loyalty.

To the consumer, you do get more value.

Say if you know you are going to fly regularly for work, you'd put your miles to a program for an airline with a reasonable presence where you're based, perhaps SQ's Krisflyer.. you're probably going to be more inclined to take SQ or other Star Alliance carriers like UA after this. This benefits them. But after about 4 longhaul flights, you'd have sufficient miles to redeem one long haul flight for free. That can't be too bad!


User currently offlineaerorobnz From Rwanda, joined Feb 2001, 7184 posts, RR: 13
Reply 14, posted (1 year 9 months 3 days ago) and read 6308 times:

It depends how you use it. I have no intention to redeem miles, I gain Gold status only to gain free lounge access, extra luggage allowance and priority check in and baggage & of course having access to priority seat assignments. For me it is well worth it

User currently onlineNZ107 From New Zealand, joined Jul 2005, 6413 posts, RR: 38
Reply 15, posted (1 year 9 months 2 days 23 hours ago) and read 6298 times:

Quoting aerorobnz (Reply 14):

Until NZ strip all the *G benefits 



It's all about the destination AND the journey.
User currently offlinemad99 From Spain, joined Mar 2012, 532 posts, RR: 0
Reply 16, posted (1 year 9 months 2 days 22 hours ago) and read 6287 times:

Quoting aerorobnz (Reply 14):
For me it is well worth it

Not to mention the extra help you'll get on missed transfers, cancelled flights and all the other issues that can make flying a nightmare .


User currently offlineAustrianZRH From Austria, joined Aug 2007, 1384 posts, RR: 0
Reply 17, posted (1 year 9 months 2 days 12 hours ago) and read 6218 times:

Quoting Viscount724 (Reply 12):
FlyingBlue (KL/AF) eliminated fuel surcharges on award tickets within Europe (including Israel and North Africa) last June. You now only pay government/airport taxes/fees.

That's good to know! However, being based in ZRH, in 90% of the cases *A has the better flight option compared to Skyteam.

When flying within Europe, the M&M economy savers are a pretty good option - base fare between 10k and 15k miles, and you can pay your taxes and fees with another 15k miles (18k from Dec on). So you get a really free flight for 25 to 30k.



WARNING! The post above should be taken with a grain of salt! Furthermore, it may be slightly biased towards A.
User currently offlineBoeingGuy From United States of America, joined Dec 2010, 3046 posts, RR: 7
Reply 18, posted (1 year 9 months 2 days 11 hours ago) and read 6201 times:

What is getting to be a scam is how difficult it is to redeem miles, especially on DL. Try getting a 25,000 mile award ticket on AS or DL on something as simple as SEA-MSP. Try getting anything international from SEA on DL at the lowest award level, and certainly not anything including the more convenient flights like SEA-NRT. Try booking SEA-JAC on a DL award for 25,000 miles.

Sure you probably get a midweek flight on AS SEA-OAK for 25,000 miles, but it seems like that's getting to be just about it.

Last time I looked for a possible upcoming trip, DL wanted more miles for Coach seats SEA-UIO than AA wanted on the same dates for First Class on the same routing.

AS and AA used to be really easy to redeem miles on. For all the criticism that AA gets, I always found their frequent flier award availability to be highly generous (look on AS's partner award site and AA flights will almost always come up, but not DL for a given routing that you could do on either airline). Even now I see AA's and AS's availability is diminishing in many cases.

This is what is getting to be a bait-and-switch in my opinion.


User currently offlinejetblueguy22 From United States of America, joined Nov 2007, 2781 posts, RR: 4
Reply 19, posted (1 year 9 months 2 days 11 hours ago) and read 6200 times:
AIRLINERS.NET CREW
HEAD MODERATOR

Quoting BoeingGuy (Reply 18):
What is getting to be a scam is how difficult it is to redeem miles, especially on DL. Try getting a 25,000 mile award ticket on AS or DL on something as simple as SEA-MSP. Try getting anything international from SEA on DL at the lowest award level, and certainly not anything including the more convenient flights like SEA-NRT. Try booking SEA-JAC on a DL award for 25,000 miles.

This! Couldn't agree more. I haven't had a reward ticket at 25,000 miles since the NW days. I remember getting a first class ticket on NW for 40,000! DL is always 40,000+ for MSP-BDL in coach. That is for sure where I can see someone calling it a scam. But at the same time people are redeeming those 40,000 miles for a ticket. It might be a sketchy, but people are taking part in it!
Blue



You push down on that yoke, the houses get bigger, you pull back on the yoke, the houses get bigger- Ken Foltz
User currently offlinesrbmod From , joined Dec 1969, posts, RR:
Reply 20, posted (1 year 9 months 1 day 5 hours ago) and read 6090 times:

Quoting jetblueguy22 (Reply 19):

This! Couldn't agree more. I haven't had a reward ticket at 25,000 miles since the NW days. I remember getting a first class ticket on NW for 40,000! DL is always 40,000+ for MSP-BDL in coach. That is for sure where I can see someone calling it a scam. But at the same time people are redeeming those 40,000 miles for a ticket. It might be a sketchy, but people are taking part in it!

I was able to snag a 25K SkyMiles award ticket last Fall, but ended up cancelling it when I decided to take a trip to Vegas a few months earlier than originally planned and at the time it was cheaper for me to buy a revenue seat as opposed to buying the necessary miles to have 40K miles for an award ticket. When I went to Vegas back in October, I decided to book it as an award ticket as even after buying the necessary miles needed, it was less than half the revenue fare between ATL and LAS.

I earn my SkyMiles primarily via my debit card, as I have a SkyMiles branded one through my bank (SunTrust) that earns me SkyMiles at a 1 SkyMile for every $1 spent on the card (Delta purchases [tickets, bag fees, buy onboard items, inflight entertainment] earn me double miles.) and while they have raised the annual fee on it a few times (Right now they charge $75 a year for it.), it is worth it. I typically earn on average 600 SkyMiles a month from the card and most years fly two round trips on Delta, so in a normal year I earn about 15K SkyMiles so every few years I have enough to get an award ticket. I keep saying I'm going to let them build up to a high enough level so I can cash them in for a First Class award ticket, but never do. I'll never earn enough SkyMiles to even reach Silver Medallion, but having means to earn miles without flying is nice.


User currently offlinen729pa From UK - England, joined Jan 2011, 400 posts, RR: 0
Reply 21, posted (1 year 8 months 3 weeks 5 days 13 hours ago) and read 5832 times:

I'm a member of four, AF, QF, LH and SK. In hindsight I probably wouldn't have had the SAS one and just used the LH account to collect Star Alliance points. But my main one is QF, I find it very good. Someone else mentioned it's the business check in (I'm a private flyer so travel Y), the extra weight allowance and little things that make it worth while for me. I doesn't cost me anything, but if I can use the C checkin rather than queue up with hundreds of passengers in a long queue checking in for an A380 than that alone is worth it!

It's like anything in life, the more you have the more you get, if you travel F all the time you get more points and credits on one journey than I would all year. But then I'm not spending £8K for a return flight to Australia, just £800. The AF, LH and SK memberships are really there to collect the points and to save a few pounds on a flight another day. The QF one I would like to get to the stage one day of being able to use them towards a F flight, as I'd never be able to afford one otherwise. 384,000 points LHR-SYD/MEL....I've got a while to go! Next year all being well will be my fourth trip to Australia and then will have earned enough points to earn a fifth trip in Y, and some would be happy with that.

I think you have to find the right one for you and what you want from it, and make it work for you.


User currently offlineCoachClass From United States of America, joined Jan 2010, 428 posts, RR: 0
Reply 22, posted (1 year 8 months 3 weeks 3 days 16 hours ago) and read 5671 times:

I believe that U.S. residents should maintain FF programs with U.S. airlines regardless of where/how they get their miles. My experience with LH's Miles and More compared to UA, DL, US and AA proved a lot more expensive to redeem and more cumbersome to maintain miles. When you redeem miles from LH you have to pay German VAT taxes as well as any US taxes and certain fees. Costs of redeeming FF tickets from AA, US, UA, DL are considerably cheaper and easier to keep. I learned that although I like flying LH and Swiss, I make sure to earmark those miles to UA and to stop using European FF programs.

User currently offlinebobnwa From United States of America, joined Dec 2000, 6464 posts, RR: 9
Reply 23, posted (1 year 8 months 3 weeks 3 days 9 hours ago) and read 5637 times:

The originator of this thread gave no proof what so ever that frequent programs were a scam and apparantly does not know what a pyramid scheme is.

User currently offlinedc9northwest From Switzerland, joined Feb 2007, 2279 posts, RR: 7
Reply 24, posted (1 year 8 months 3 weeks 3 days 1 hour ago) and read 5609 times:

Quoting CoachClass (Reply 22):

I believe that U.S. residents should maintain FF programs with U.S. airlines regardless of where/how they get their miles. My experience with LH's Miles and More compared to UA, DL, US and AA proved a lot more expensive to redeem and more cumbersome to maintain miles. When you redeem miles from LH you have to pay German VAT taxes as well as any US taxes and certain fees. Costs of redeeming FF tickets from AA, US, UA, DL are considerably cheaper and easier to keep. I learned that although I like flying LH and Swiss, I make sure to earmark those miles to UA and to stop using European FF programs.

I thoroughly disagree with you. I think it differs by what you want from the program. If you want free flights, maybe you're right. However, do it for all the other benefits and US FF programs might not come out the winners.

The best one for me, as a Chicago resident, is still KL/AF's Flying Blue, though many complain about it.


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