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Eliminate Frequent Flyer Programs?  
User currently offlineJetdeltamsy From United States of America, joined Nov 2000, 2987 posts, RR: 7
Posted (9 years 6 months 1 week 21 hours ago) and read 8578 times:

Frequent flyer programs were created to establish brand loyalty to a particular carrier, which was a great idea when AA started the whole idea.

These programs have created millions of flying monsters out there. Too many people develop a sense of entitlement (to a first class seat or other perks) that is unrealistic.

I think that frequent flier status levels and rewards should be based on the amount of cash an individual (or company) generates for the airline. The vast majority of people who have frequent flyer accounts are out there flying on deeply discounted (below cost) fares.

If someone flies FREQUENTLY on paid first, business or unrestricted economy fares, they should, over time, be recognized for their loyalty. But if the airline is actually losing money on most of the tickets these people are flying on, it just doesn't make sense to me to reward them with upgrades and free seats.

The industry has changed since FFP's were created. It's time for customers to recognize that sometimes the greatest perk of all it the low price of the ticket.


Tired of airline bankruptcies....EA/PA/TW and finally DL.
234 replies: All unread, showing first 25:
 
User currently offlineGeoffm From United Kingdom, joined Feb 2004, 2111 posts, RR: 6
Reply 1, posted (9 years 6 months 1 week 20 hours ago) and read 8530 times:

BA already reward only people who pay full, or near-full, price for their tickets. Those that don't earn only 25% of miles flown. Good for the real frequent fliers; not so good for the more average traveller (me).

Several years ago the major supermarkets in the UK started loyalty cards. The idea was that they'd be more loyal to "their" supermarket. What actually happened was that most people ended up with multiple loyalty cards from several stores!

Jetdeltamsy, are you a frequent flyer who pays big bucks to DL every year?

Geoff M.


User currently offlineKen777 From United States of America, joined Mar 2004, 8483 posts, RR: 9
Reply 2, posted (9 years 6 months 1 week 20 hours ago) and read 8507 times:

I'm with AA and BA and they both address this issue. The higher your fare the higher the bonus miles you get. For those that travel a lot on the airline there are elite levels and these reward loyal travelers with bonus miles. With the advent of the alliances the integration of FF programs allow airlines to further leverage their loyalty programs.

While airlines moan about the programs at times they do bring in a lot of money from companies that give miles - like credit cards - and many of these miles are never redeemed. I don't think that the airlines are going to give up the FF programs anytime soon and miss out on that cash.


User currently offlineAa757first From United States of America, joined Aug 2003, 3350 posts, RR: 7
Reply 3, posted (9 years 6 months 1 week 20 hours ago) and read 8488 times:

US Airways' lowest frequent flier level, Silver Preferred, requires you fly 30 segments. So let's say I only fly PHL to BOS. The lowest price I pulled up (on US1727 and US1170) was $236. That is a minimum of $3,540 of revenue in one year, and that is a pretty cheap segment. So would US Airways rather have $944 in revenue from me and have the rest of it go to AirTran and American, or keep me. Besides, upgrading someone to First Class does not cost very much. All you get nowadays is a glass of wine and a bottle of water before you push back.

AAndrew


User currently offlineCommavia From United States of America, joined Apr 2005, 11983 posts, RR: 62
Reply 4, posted (9 years 6 months 1 week 20 hours ago) and read 8478 times:

AA's system of FF accrual, while sometimes a bit complex, is, IMO, the best system for rewarding all those who fly but rewarding higher-paying customers most. With AA's system, customers accrue both miles and points for each elite-qualifying trip they take. Customers who book First, Business or full-fare Coach (Y/B) fares get more qualifying points than those who get $178 RT airfare on Orbitz. To qualify for elite status, an FF must satisfy a minimum number of miles or points, whichever is higher. And, for the purposes of frequent flyer mile award redemption, FFs earn 125% of miles flown when booked in Business and 150% of miles flown when booked in First.

User currently offlineAerofan From United States of America, joined Aug 2004, 1517 posts, RR: 2
Reply 5, posted (9 years 6 months 1 week 20 hours ago) and read 8454 times:

They should be changed- not totally eliminated. What I would like to see is airlines stop giving full miles to those pax travelling on corporate discounts. If the deal for the corporate has been discounted by 40% then this is what the pax flying on such a deal should accrue etc etc. Or perhaps none at all.

User currently offlineFbgdavidson From United Kingdom, joined Oct 2004, 3713 posts, RR: 28
Reply 6, posted (9 years 6 months 1 week 20 hours ago) and read 8438 times:

Quoting Aerofan (Reply 5):
What I would like to see is airlines stop giving full miles to those pax travelling on corporate discounts.

While the company may be happy they are paying less you are pissing off the guy riding the fare no end by not giving him any miles!

Can't remember where I read it now but UA have a number of divisions and the only ones making money are related to Mileage Plus.

FFPs will not be eliminated.



"My first job was selling doors, door to door, that's a tough job innit" - Bill Bailey
User currently offlineJacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 59
Reply 7, posted (9 years 6 months 1 week 20 hours ago) and read 8415 times:

Quoting Jetdeltamsy (Thread starter):
If someone flies FREQUENTLY on paid first, business or unrestricted economy fares, they should, over time, be recognized for their loyalty.

I fly on restricted tickets, and sometimes I've had to miss my fight and travel another day, which means AA kees the cost of the ticket, and charges me for a new ticket..

by the end of this year, I will have logged close to a quarter of a million miles the past two years..... so, should I get less rewarded than say a person who has flown a few times on an unrestricted ticket?

Not only do I go out of my way to fly on AA (ok, some people think I'm nuts..but thats not the issue), I'll pay more to fly on AA (maybe upto 20% more, but no more), and if I fly on a One World carrier, I book the "codeshare" ticket (different class ticket) which costs more....

AA has made received HUGE amounts of business from me the past few years because of their FF (and services associated with FF, such as priorty seating, better checking, etc.)..and I'm sure there are thousands of others like me who fly their particular carrier..

It costs carriers such as AA pennies to the dollar to service those FF's, yet they make millions of $$$$ on the intangibles such as the ones I mentioned above...



"Up the Irons!"
User currently offlineSK601 From Belgium, joined Jun 2005, 976 posts, RR: 4
Reply 8, posted (9 years 6 months 1 week 19 hours ago) and read 8407 times:

I like to see AF/KL to stop Flying Blue immediately! Flying Dutchman was terrible and FB is even worse! Nothing but trouble with this program; no helpdesk at Schiphol, not even a callcenter in the Netherlands, you have to call to France! Many many many problems with the points transfer from FD to FB, downgrades from FB Platinum to Gold, from Gold to Silver; it's almost impossible to book a reward flight, upgrades only possible on full fare tickets and so on, and so on....

User currently offlineJetdeltamsy From United States of America, joined Nov 2000, 2987 posts, RR: 7
Reply 9, posted (9 years 6 months 1 week 19 hours ago) and read 8389 times:

Quoting Geoffm (Reply 1):
Jetdeltamsy, are you a frequent flyer who pays big bucks to DL every year?

No. I'm a flight attendant (who is hoping to RETIRE someday from a company that still exists).





[quote=Aa757first,reply=3]That is a minimum of $3,540 of revenue in one year, and that is a pretty cheap segment. So would US Airways rather have $944 in revenue from me and have the rest of it go to AirTran and American, or keep me.

What??????? Fyi young fellow...$3,540 in revenue over a 12 month period is totally insignificant. That's exactly the kind of frequent flyer i'm talking about.



Tired of airline bankruptcies....EA/PA/TW and finally DL.
User currently offlineDLPMMM From United States of America, joined Apr 2005, 3602 posts, RR: 10
Reply 10, posted (9 years 6 months 1 week 19 hours ago) and read 8385 times:

The airline milage programs have become cash cows for the legacy airlines (often their only money maker these days). If you calculate the amount of money paid by the affiliates per frequent flier mile multiplied by the number of miles required for a particular ticket you will find the amount paid for the free ticket is not discounted in the least.

As for rewarding their more profitable frequent fliers better, most of the majors already have systems in place to do this, be it by giving less miles for cheap fares and more miles for expensive fares, limiting upgrades on cheap fares, or by giving bonus miles for elite fliers.

The free market will take care of itself in the long run.


User currently offlineJrMafia90 From United States of America, joined Mar 2004, 216 posts, RR: 0
Reply 11, posted (9 years 6 months 1 week 19 hours ago) and read 8381 times:

I think they should keep it. It is for frequent flyers, how do you think it got its name? I feel if you fly a lot then you should have it, since that's what its name means. But I see what your saying about the more money you spend for the airlne. I do that when I fly first and most of us do that when we fly first.

User currently offlineAerofan From United States of America, joined Aug 2004, 1517 posts, RR: 2
Reply 12, posted (9 years 6 months 1 week 19 hours ago) and read 8370 times:

FBG- So what if the guy flying is pissed. He is pissed because he is getting something for nothing?? Isn't that the entitlement mentality? He did not pay for the ticket. His corporation determines what carrier he flies and what class he gets pissed that he doesn't get the miles? So who cares?

Full miles should be reserved for pax paying full fare. Further if the IRS was worth its salts it would tax all those FFP as well


User currently offlineFlyAUA From Austria, joined May 2005, 4604 posts, RR: 55
Reply 13, posted (9 years 6 months 1 week 18 hours ago) and read 8309 times:

Quoting Jetdeltamsy (Thread starter):
I think that frequent flier status levels and rewards should be based on the amount of cash an individual (or company) generates for the airline. The vast majority of people who have frequent flyer accounts are out there flying on deeply discounted (below cost) fares.

If someone flies FREQUENTLY on paid first, business or unrestricted economy fares, they should, over time, be recognized for their loyalty. But if the airline is actually losing money on most of the tickets these people are flying on, it just doesn't make sense to me to reward them with upgrades and free seats.

On Star Alliance flights, the mileage system was chaged (about 1 or 2 months ago???) to do exactly what you describe. The cheaper your fare, the less miles you get. While it sucks, I understand it and support them fully!



Not drinking, also isn't a solution!
User currently offlineFbgdavidson From United Kingdom, joined Oct 2004, 3713 posts, RR: 28
Reply 14, posted (9 years 6 months 1 week 18 hours ago) and read 8287 times:

Quoting Aerofan (Reply 12):
FBG- So what if the guy flying is pissed.



Lots of corporate clients from the same compant get pissed off with shitty treatment despite being on a multi-million dollar contract and so the corp agreement is ended.  Yeah sure Money moved to another airline.

Quoting Aerofan (Reply 12):
He did not pay for the ticket. His corporation determines what carrier he flies and what class he gets pissed that he doesn't get the miles? So who cares?


You've obviously never known anyone who has to fly regularly.



"My first job was selling doors, door to door, that's a tough job innit" - Bill Bailey
User currently offlineFlyAUA From Austria, joined May 2005, 4604 posts, RR: 55
Reply 15, posted (9 years 6 months 1 week 17 hours ago) and read 8262 times:

Quoting Aerofan (Reply 12):
FBG- So what if the guy flying is pissed. He is pissed because he is getting something for nothing?? Isn't that the entitlement mentality? He did not pay for the ticket. His corporation determines what carrier he flies and what class he gets pissed that he doesn't get the miles? So who cares?

Who is paying in this case should be irrelevant. After all it's part of your job if you need to travel and indirectly you are paying for it (though not through your salary). And besides, who are airlines to differentiate between the two??? As long as they are getting the money for a ticket they should just shut their gobs! And I can assure you even people who have their tickets paid by their company DO care about mile rewards.

I must agree with Fraiser on this one.

Fraiser... long time no see Big grin



Not drinking, also isn't a solution!
User currently offlineTrolley Dolley From , joined Dec 1969, posts, RR:
Reply 16, posted (9 years 6 months 1 week 17 hours ago) and read 8243 times:

Why would the airlines get rid of one of the best programmes to track their customers? The value for the airline is great as it gives them the ability to track customer trends over time, see what types of fares have been used and so on. I am sure QF has a wealth of information on me from my many years in their programme. A good frequent flyer programme can speed up the bookng process eg oneworld automatically gives me preferred pre-seating etc, thus saving costs.

A bigger issues for airlines is the accrual and redepmtion accounting policies which can cost airlines millions. Personally I think the best FF programme for airlines is the Air NZ programme. They convert "points" to "dollars" and those dollars can be used to access any seat on any flight. You can't beat redemption like that! Naturally, if you don't have enough dollars in your account, you can't get a seat. More importantly the airlines' liability is reduced as each trasaction can be recorded as cash. The earning of dollars is directly related to fare paid too, with many cheaper fares not qualifying for benefits.

Personally I'd like to see FF programmes scaled back to the simple flight use only. The addition of hotels, credit cards etc simply adds to the complexity and compliance costs of the programmes.


User currently offline1MillionFlyer From , joined Dec 1969, posts, RR:
Reply 17, posted (9 years 6 months 1 week 17 hours ago) and read 8236 times:

Quoting Jetdeltamsy (Reply 9):
What??????? Fyi young fellow...$3,540 in revenue over a 12 month period is totally insignificant. That's exactly the kind of frequent flyer i'm talking about.

thats the kind of attitude that says "I want to go out of business" any business is good business and every dollar counts, maybe you should study yeild management before making such comments.


User currently offlineFlyAUA From Austria, joined May 2005, 4604 posts, RR: 55
Reply 18, posted (9 years 6 months 1 week 17 hours ago) and read 8234 times:

Quoting Trolley Dolley (Reply 16):
Personally I think the best FF programme for airlines is the Air NZ programme. They convert "points" to "dollars" and those dollars can be used to access any seat on any flight. You can't beat redemption like that! Naturally, if you don't have enough dollars in your account, you can't get a seat. More importantly the airlines' liability is reduced as each trasaction can be recorded as cash. The earning of dollars is directly related to fare paid too, with many cheaper fares not qualifying for benefits.

WOW, that sounds like a nice FF programme. I am guessing your chances of having them expire is also reduced since you can spend them in the form of cash to purchase seats, as opposed to systems where you need a certain number of miles before you can do anything with them? Do they have their own programme or do they belong to a group of other partners too?



Not drinking, also isn't a solution!
User currently offlinePANAM_DC10 From Australia, joined Aug 2000, 4217 posts, RR: 89
Reply 19, posted (9 years 6 months 1 week 16 hours ago) and read 8198 times:
AIRLINERS.NET CREW
COMMUNITY MANAGER

I don't feel that Frequent Flier programs should be eliminated though I do feel that airlines should differentiate more between a "Frequent Flyer" who racks up points on credit cards and recognise "Loyal" Frequent Fliers who go out of their way to use that particular airline when they fly.

Regards



Ask the impossible to achieve the best possible
User currently offlineTrolley Dolley From , joined Dec 1969, posts, RR:
Reply 20, posted (9 years 6 months 1 week 16 hours ago) and read 8199 times:

There are restrictions. You can't combine Airpoints dollars with other forms of payments, and if can be hard to figure out how much you need for a reward as the price varies from service to service. I'll have to check with regards expiry. The use of points like this is restricted to NZ ticketed and operated flights only. Use of its star alliance partners still works on the host airline's availability of redemption seats. The terms dollars is smoke and mirrors as you can't cash them in and get cash back. However its a simpler, more user friendly system than other ways. One of the best features is that the reward fares take the rules of the published fares, meaning that businesses can use the Airpoints dollars for fully flexible, refundable fares. It's a pretty good system for the road warrior travelling on a corporate account.

User currently offlineAa757first From United States of America, joined Aug 2003, 3350 posts, RR: 7
Reply 21, posted (9 years 6 months 1 week 16 hours ago) and read 8172 times:

Quoting Jetdeltamsy (Reply 9):

What??????? Fyi young fellow...$3,540 in revenue over a 12 month period is totally insignificant. That's exactly the kind of frequent flyer i'm talking about.

Its more than Mr. and Mrs. Once a Decade who won't pay more than $189 roundtrip between PHL and LAX, isn't it?

AAndrew


User currently offlineAirScoot From United States of America, joined May 2005, 688 posts, RR: 2
Reply 22, posted (9 years 6 months 1 week 16 hours ago) and read 8168 times:

While it's a bit extreme, I think that Independence Air has a good idea. Even though they're a coach only airline - in order to receive a free ticket through standard accrual it has nothing to do with the class of service purchased. For each dollar you spend, it's one point. Essentially in order to get a free ticket from them you have to fly enough of their $149 round trips to accrue 1500 points. They also (used to? I looked at their website and couldn't find the reference again) require that the points be used within one year. Essentially if you're loyal enough, you get the bennies. If you're not, you don't get squat.

That said, having been on both sides of this industry, I have to agree that the worst thing about these programs is the incredible sense of entitlement that some members end up having. Mind you it's usually the ones that are just at the bottom end of the accrual ladder. Executive Platinum (or equivalent) members know the routine and are less likely than someone who just hit Silver (or equivalent) to scream bloody murder that their $549.00 ticket doesn't ENTITLE them to a first class upgrade roundtrip to Tokyo.

I fly a good amount each year and generally hit status. While I appreciate the benefits that come with the loyalty programs, I realize that nothing is really for free and it amazes me to see the people who make total idiots out of themselves on a daily basis over the issue.


User currently offlineFlyAUA From Austria, joined May 2005, 4604 posts, RR: 55
Reply 23, posted (9 years 6 months 1 week 16 hours ago) and read 8159 times:

Quoting Trolley Dolley (Reply 20):
The terms dollars is smoke and mirrors as you can't cash them in and get cash back.

Yeah I was aware of that. I just meant that it was more user friendly to get cheaper tickets (using miles - or in this case dollars) instead of waiting till you have enough miles to get a free flight.

Thanks for the info  Smile



Not drinking, also isn't a solution!
User currently offlineCheco77 From Peru, joined Oct 2004, 1345 posts, RR: 8
Reply 24, posted (9 years 6 months 1 week 16 hours ago) and read 8150 times:

As long as airlines have they FFP´s like we know them, it means they are not dissatisfied with them. It means, that they don´t loose that much money with the redemption. For example, in former FD, you couldn´t redeem miles in high season. That is a way of ensuring loss of dollars.
Airlines know what they are doing, so lets keep them alone.
Regards,
Adam



Czech Boeing lover living in Lima
25 Afay1 : If the airline is willing to sell me a PHL-BOS ticket for $236 USD (and put me on a filthy plane with malfunctioning power points in recent experience
26 Ikramerica : As for this "penalize discount fares" argument, it is already done at most carriers. How? First, full fare econ and business/first get more miles and
27 Aerofan : FlyAUA, your agreeing with Fraiser means diddly squat. A person traveling on corporate discount on behalf of his or her company is paying for the tick
28 Skymonster : Get this - the airline DOES differentiate between the corporates who travel on 45-50% discounts and the passengers who pay full fare! The airline has
29 MidnightMike : The frequent flyer programs for the airlines are money makers. There are numerous programs in place that people can generate points, not just flying
30 Post contains images Starlionblue : Yes it does... And has been said, if you only fly very discounted tickets, it takes much longer to get status. Talking about me now are we . Well che
31 Post contains images Zeekiel : It's a way of increasing revenues and overall competitive advantage. In return for such agreements, hotels or rental car hireage give FF points in ex
32 Post contains images AirScoot : I think they throw darts at a printed out Excel spreadsheet
33 B747-437B : Just this week, ACE Holdings, the parent company of Air Canada, revealed that their Aeroplan program is valued at approximately C$2 billion as a stand
34 Richardw : Living in London with access to so many airlines you find yourself being a member of a number of programmes, some for the miles, some for the website
35 N77014 : The data collected by carriers about the habits of their best customers alone make keeping FF programs worth it.
36 Ssides : You're a flight attendant -- and you know that the system already works this way. When it comes to upgrades, bonus miles, etc., everyone knows that i
37 PA110 : By creating elite qualifying miles, I think many airlines have started to differentiate between a simple loyalty customer and a true frequent flyer. T
38 YYZYYT : Aeroplan has always done this... at present the cheapest fares count for reward accumulation (but at a discounted rate) but do not count for status a
39 Ikramerica : forgot to mention that for many airlines, consolidator fares (priceline, cheaptickets) don't earn miles at all.
40 Fbgdavidson : Hi! Have we met before?
41 BOAC911 : A lot people almost consider frequent flyer miles as a alternative kind of currency. These miles however won't help airlines pay their employees and p
42 LTBEWR : The question of the value of continuing FF plans is a frequent subject here in this forum. The modern FF plans have been around for about 23 years. Th
43 Lufthansa : JetDeltamsy, Son, You've got a bad attitude. The customer...who buys $3000 worth of domestic tickets for himself is worth a lot becuase he's probably
44 Lufthansa : JetDeltamsy, Son, You've got a bad attitude. The customer...who buys $3000 worth of domestic tickets for himself is worth a lot becuase he's probably
45 1MillionFlyer : Delta's Balance sheet carries frequent flyer points as "Customer Sales incentives" as of last quarter it was a whooping 55 Million dollars, not bad i
46 PanAmDC10 : I wonder whether all these frequent flyer programs are hurting the airlines financially, and are part of the reason many of them are in trouble now. I
47 Goingboeing : Big F***ing Deal. If the guy riding the fare doesn't like it, he can always get another job. The airline isn't responsible for providing perks to non
48 Fbm3rd : lets not blame the airlines too much. many of these miles are awared via credic card companies. UAL has a damn MP-online mall where I get tones on mil
49 Fbgdavidson : The what?? You obviously have no business mind whatsoever. FFPs are just a form of loyalty scheme. Why is that pretty much every form of customer fac
50 Post contains images Aa777jr : The number of flights the a person has to take is ridiculous to receive any sort of free ticket these days. There are so many restrictions on booking
51 Goingboeing : Simpler terms....if I am emplyed by ABC company and my company buys my tickest for me, and those tickets don't qualify me for "primo" reward levels,
52 AA7573E : This thread was clearly started by a flight attendant who is ready to retire. Those flyers who buy full fare coach, first, and non discounted tickets
53 Goingboeing : Don't you find it a bit odd that the airline with the "sucky" FF program and who treats the first time flyer exactly the same way they treat a person
54 Robsawatsky : Sure they hurt, because it is a liability. However, that liability was generated with the full knowledge of management and with management having the
55 Aa757first : But ABC Company might choose the another airline. Doubt it. What about EarlyReturns, A+ Rewards and trueBlue? Southwest isn't the only concern in the
56 Goingboeing : True, they might, then again, after price is conveneince...if the corporate travel department at American Airlines offered ABC company a deal on airf
57 Starlionblue : Exec Plats actually get unlimited upgrades on ANY fare within North America and the Carribean.
58 AA7573E : Quoting Goingboeing (Reply 53): Don't you find it a bit odd that the airline with the "sucky" FF program and who treats the first time flyer exactly t
59 Goingboeing : I never put words in your mouth. Those are the words of your prima donna elites who are demanding every perk from your airline and paying "leisure cl
60 Schipholjfk : Who set the rules for FF programs? The airlines did. So if any passenger abides by those rules and rightfully earns rewards promised by airlines... mo
61 Post contains images Fbgdavidson : goingboeing, nice reply Thank you for at least putting some justification for your comments. Yes it was Flyertalk, but it was none of the users you me
62 BHXFAOTIPYYC : People ARE hugely, sometime bizarrely, loyal to FF programs. I have many clients in the course of a year chose to pay higher fares just to get status
63 NWA Man : Because it's impossible to find out exactly how much business is drawn from the frequent flyer program. I'll use Northwest as an example. Without Wor
64 Starlionblue : Pfft. Business travelers keep the legacy airlines flying. I may pay leisure class fares when I can but I'm still worth $30k+ a year to AA. The perks
65 Jetdeltamsy : No they are not. A seat that does not generate a cash sale is given away. FREE tickets do not generate cash sales...they may generate a credit on som
66 Goingboeing : Part of the agreement with FF programs is that they can be changed or eliminated at any time. When the airlines attempt to change them, the outcry co
67 Tango-Bravo : And extremely high-maintenance (= high-cost) monsters at that. Taking a metaphor from the Cold War era, FF programs as practiced by the legacies are
68 Goingboeing : I forgot about the "alliances"...where someone can fly on one airline, say US Airways, and accrue mileage on United. How does this benefit United?
69 Tango-Bravo : Well said ...if anything, this is a HUGE understatement of what legacy FF programs have devolved into. Which is why their programs are not only sheer
70 Avek00 : Thank you! Thank You! THANK YOU! Within all of the back-and-forth BS on this thread, the bottom-line fact that frequent-flyer programs are PROFITABLE
71 Goingboeing : Avek....right now, the driver to get butts in seats seems to be price...why else would legacy carriers, especially BANKRUPT legacy carriers, price the
72 Avek00 : Part of the problem is that many legacies have diluted their products to at or below LCC levels, thus eliminating the possibility of commanding a sig
73 1millionflyer : Southwest has unlimited free companion tickets for Rapid reward members that fly over 100 segments in a year. That is not treating eleite flyers "the
74 Goingboeing : Yep...but tell me...if you show up at the airport, can you tell who is flying on a free ticket and who isn't (unless they tell you)? Point being, EVE
75 Tango-Bravo : "Profitable" only because of sleight-of-hand accounting by which the true costs of FFPs are shifted to other departments of the legacies. To make a p
76 Avek00 : What are you talking about? The airlines come out ahead with the FFPs with all but a nominal percentage of "freeloaders". Keep in mind that airlines:
77 1MillionFlyer : My Company pays for the ticket. Right now I am working in Dnever for 6-8 months. The only restricition we have right now is "Keep your R/T ticket und
78 Aa757first : Because when United wants to send one of their passengers from Boston to Ft. Lauderdale, US Airways is going to take care of their passenger for them
79 Avek00 : I hope you realize that the VAST majority of pax NEVER use an alliance or partner airline (not even for redemption purposes). Most United pax could c
80 Goingboeing : How quickly after the first expense report was denied would you start using the "recommended" carrier?
81 Jetdeltamsy : Has nothing to do with "taking care of" United's passenger. UA/US share revenue. When US carries a passenger on UA coded US flight, UA gets the reven
82 Post contains images 1MillionFlyer : They never got denied , ny new company has no prefeered carrier, just a limit on the amount of airfare per R/T
83 Starlionblue : SW gives a free flight for every eight paid ones. That's a FF program. So even SW sees the worth of frequent fliers, and rewards them. The only diffe
84 1MillionFlyer : Kind of. YOu now earn a free 1 way per 8 one ways (but you need 16 segments within 1 year to get the free ticket and can only book it as a round trip
85 Avek00 : It's the other way around - the OPERATING carrier receives the ticket revenue while the TICKETING carrier receives a nominal fee.
86 Goingboeing : Okay...you're almost there now. Who is making money? Southwest. So who can afford the FF program? That's right. Now....if Southwest were to pull thei
87 1MillionFlyer : The legacy's can't afford NOT to have them, they would lose a lot of customers trust me on this.
88 Goingboeing : To whom? If one drops it, the others will follow suit. Maybe the only ones to keep them will be the ones who can least afford them...United and UsAir.
89 Beaucaire : At the end of the line ,the miles awarded to flying customers need to be paid - by the customer.There is no free lunch and most defenitely no free rid
90 Sllevin : Did you not notice that AC just sold 12.5% of Aeroplan? And based on that valuation, Aeroplan is worth something like $1.5 Billion USD -- effectively
91 ContnlEliteCMH : Good point! Just yesterday I needed to spend the weekend in Atlanta instead of returning home to Columbus. I called Continental to rebook, and they p
92 ContnlEliteCMH : Wow. (Shakes head.) I can tell YOU don't own a business, and have no idea about what it's like...
93 PlaneSmart : You need to look where the flyer earned miles / points. If they were not earned from flying, or flying with the airline that is providing the seat, bu
94 1MillionFlyer : doubtful, everyone would still keep them, they generate revenue, only a foolish company would drop their FF program. DO you remember the first thing
95 Goingboeing : At one point, Enron was worth billions on paper. In the days of the 'dot coms', businesses were worth billions on paper. Bottom line, how do you valu
96 Tango-Bravo : Very good point. If FFPs are so "proftable," why is it that any airline executive would tell you "strictly off the record" that they would dump their
97 Fbgdavidson : Something I forgot to mention.... And how as a leisure traveller paying for own tickets do I get a reward for my loyalty? I travel purely for leisure
98 Beauing : Airlines will eliminate them at their own peril. They have been enormously successful in building brand loyalty, and generating revenue, particularly
99 Goingboeing : Then don't dump the international part of the FF program...The US domestic market needs something done...Too many FFer's aren't paying $11k...they ar
100 Tango-Bravo : Speaking within the context of U.S. legacy domestic service, it would be far more correct to say "they (FFPs) have been 'successful' in throwing good
101 Beauing : I thought the idea was to give away a seat that would have likely been empty anyway. At least that was the theory when the programs first began. With
102 Luv2fly : Finally someone who gets it.
103 Goingboeing : YOur missing TB's point...the reason the airlines offer them is because....everybody else is. Someone needs my mom to tell them "If Johnny Jones was
104 PlaneSmart : Most financiers and credit-rating agencies value airline FF programmes at zero or negative, irrespective of the value placed on them by the airline.
105 Post contains links Beaucaire : A brillant write-up about FF -liabilities for airlines on this link.... http://hbswk.hbs.edu/item_sidebar.jhtml?id=4450
106 Beauing : That's the same thing as saying they keep them because giving it up would put them at a competitive disadvantage. One will always keep theirs to give
107 Goingboeing : Okay...let's say Northwest is the lone holdout. Everybody flees Delta and American and Continetal to fly Northwest, since they still offer their prog
108 Beauing : Airlines are not losing money due to their FF programs, they are losing money because there is excess capacity in the airline industry. Too many seat
109 Goingboeing : You're getting closer here...in the quest to get butts in seats...more and more seats are being offered at a discount. It's a discount that more than
110 Beauing : That's because they're competing against low-cost start-ups, it has nothing to do with their FF programs. There's too much capacity industry wide. A
111 Sllevin : Either they ARE profitable, or some airline CEOs are headed to jail, since they've been certifying financial results theat say they make metric boatl
112 Goingboeing : I like this "some money is better than no money" business plan. If I were selling silver dollars for 75 cents each, how many will I need to sell befo
113 Bond007 : Where is this myth coming from that FF's are all getting perks for all discounted fares?? First of all, they are buying LOTS of them ... that's why th
114 Avek00 : " target=_blank>http://hbswk.hbs.edu/item_sidebar.jh...=4450 It's actually a rather BS article. The authors vastly underestimate tha amount of breakag
115 Beauing : Your silly analogy doesn't work. An airline seat is a perishable commodity, you can't hoard it like you can a silver dollar. If you don't sell it on
116 PlaneSmart : I'm not saying there is no money to be made from FF - see part of earlier post re-produced below. In many cases, perhaps most, it's not US-based airl
117 Goingboeing : Most of the legacy carriers are flying with an 80% load factor, yet they are losing MILLIONS. At that rate, it really wouldn't matter if half the sea
118 Bond007 : Why not? If the First Class seat is going to be empty anyway, why not fill it with a FF from coach, and it might make a difference on his choice of a
119 Sllevin : No, they are financial institutions that have paid airlines OVER A BILLION DOLLARS for ongoing participation in various airlines' FFPs. I'd say anyth
120 Beauing : What's your source for this information? Is this something you just made up?
121 Post contains images Sllevin : And let's not forget that more and more airlines are devaluing miles as time goes along. AA has now gone to the 'saver' program instead of the 'plan-a
122 Fbgdavidson : Because if a regular traveller knows they are going to get upped to First/Business by paying economy fares then what is the incentive to pay the diff
123 Beauing : Because they don't know that. Upgrades to first are typically available only if there is no paying passenger filling the seat.
124 Goingboeing : Just the gut feeling I get by looking at the financial information of airlines that show load factors at or above 80% and quarterly losses in the hun
125 Beauing : Because your selling you seats at a discount. Because there's too much capacity in the industry, and you're competing against the LLCs which have muc
126 YYZYYT : On the other hand, for many regular travellers (e.g. myself when on business) you can't justify business or first fares, but (in my case anyway) the
127 Bond007 : It certainly has nothing to do with FF programs! I agree totally with Beauing: ....and to add that the airlines are poorly managed on top of that ...
128 Goingboeing : Never said that FF programs were responsible for losses, just questioning the wisdom of rewarding people who are obviously not paying enough money fo
129 Bond007 : Not quite right....MOST of the people on the flight are not paying enough money for their tickets...that's exactly why the airlines are losing money.
130 Goingboeing : On another board, a very frequent flyer was telling how he usually always books the lowest fare, with the reasoning that "if they are dumb enough to o
131 1MillionFlyer : I NEVER book L/U/T fares only K/Q becuase I want to be able to actually get an upgrade. that guy must not be a very good Road Warrior, I have to by B
132 Beauing : Up until recently, airlines imposed the Saturday night stay rule for the low leisure fares, so business travelers had to pay top dollar. Business tra
133 Goingboeing : If it happens to be a route that competes with Southwest, I believe you'll notice that the Saturday night stay requirement doesn't apply.
134 Post contains images Bond007 : Well, of course you would always book the lowest fare you could! But simple logic tells me that if I need to fly every week, my client is probably pa
135 Beauing : I said up until recently. Lately many airlines have dropped the Saturday night stay rule. I never fly Southwest because they don't serve the cities I
136 Goingboeing : GOTCHA!!!!! Where Southwest doesn't have the lowest fare, it's usually the advance purchase tickets...the "loss leaders". So if you're flying someone
137 Cairo : Goingboeing and Tango-Bravo and Luv2Fly are almost exactly right. I work in the corporate sales department of a major US legacy carrier. Most of you a
138 Bond007 : Actually Cairo, if you read the posts, you'd see that many of us are actually FF's and know what influences our decisions - those who don't travel 50
139 Goingboeing : Did you or your company pay for first class? That's a cost to the airline if you didn't. I used to travel every week, even back in the "heyday" of ai
140 Avek00 : Talk to your marketing and accounting departments ASAP, so that they can show you that the FFP is one of the few REVENUE POSITIVE areas of your airli
141 Post contains images Bond007 : Sorry, but really don't get your argument. Avis upgrade me to a better car, because they would rather me go to them rather than Hertz. They wouldn't
142 Cairo : BOND007, Everything you say about how you choose your carrier is exactly right. What you fail to see is that for everyone of you choosing carrier A, t
143 Goingboeing : Okay...hypothetical numbers - If AA had a flight that was $400 and got me to my destination by 10:00 a.m. and Delta had a one stop for $350 that got
144 Tango-Bravo : FF programs are one of the main reasons legacies are unprofitable -- if not the main reason. And with credit card affinity revenue loss would come a
145 PlaneSmart : You are describing what these banks have paid participating airlines for bank customer card redemptions? Some banks have equity stakes in airlines FF
146 Post contains images Sllevin : Then every airline CEO and CFO should be in jail, because their public financial statements reflect the exact opposite. There is not a single legacy
147 Beauing : WRONG AGAIN!!!! As I said I don't fly Southwest because they don't serve the cities I fly to/from. I fly Alaska and get my Alaska miles, or I fly Nor
148 Tango-Bravo : Apparently, then, Sarbanes-Oxley accountabilty does not prevent most of the true costs of FF programs from being absorbed in the ledgers of other dep
149 Avek00 : If that is indeed the case with your airline, then it is (with all due respect) an ass backwards company, as most every other legacy is generating mi
150 Goingboeing : I would submit that every trip you took on any airline except Alaska, you got your "Alaska miles" while Delta, Northwest, Continental, and American g
151 Avek00 : Alaska also GETS PAID when a partner FFP member decides to redeem his or her miles for an Alaska flight versus a flight on the "native" airline. And
152 Beauing : Not necessarily. I can redeem my miles on American, Delta, Northwest and Continental. And I have. They are also code share partners with Alaska.[Edit
153 Goingboeing : Code shares are the "smoke and mirrors" of the airline industry. I usually find that the code share "partner" will offer a smoking deal...on the "othe
154 Post contains links Bond007 : Guys, PLEASE read these articles before you blindly make statements about FF programs losing revenue and being a reason why airlines are losing money:
155 Starlionblue : Sorry but the FF programs at AA etc actually bring in more than they cost. So they would be more in the red without the FF programs.
156 Goingboeing : I'm out after this...but the bottom line is, anybody can cite that FF programs are "tremendous moneymakers", yet the airlines themselves do not break
157 Bond007 : No offense, but this research is done by professionals, and they totally disagree with your comments regarding FF programs profitability. In fact the
158 Tango-Bravo : Yet another reply that reads to me that it is the banks and credit card issuers who are "smiling all the way to the bank" -- at the expense of the le
159 Goingboeing : Bond - I saw no references to the cost side, with the exception of "myth and reality", and in the reality, the only referred to "miniscule costs". But
160 Alphascan : GoingBoeing: For years you've been arguing your misguided point in the face of overwhelming evidence you are wrong. Give it a rest.
161 Goingboeing : So, have you seen the breakdown of costs from the airlines? Until you do, merely putting the words "reality - costs are miniscule" is far from "proof
162 Tango-Bravo : Those "miniscule costs" very obviously refer only to direct FFP administrative costs -- which probably are indeed "miniscule" -- in comparison to the
163 Tango-Bravo : And do you believe for even a moment that Alaska doesn't also pay the partner airline on whom Alaska FF members redeem awards on the non-"native" air
164 Lightsaber : Now that the LCC have networks it probably is a small effect. Back in the days of People's express... It was AA's FF program that was credited with p
165 Avek00 : Of course they do - I never said or implied otherwise.
166 Tango-Bravo : Then what's with "gets paid" being typed in all upper case -- as if to emphasize "all the money" FFP partnerships bring to legacy airlines? When in f
167 PlaneSmart : The Delta loan deal was effectively a loan secured against future flights. As Skymiles are redeemed Delta either has to repay the loan (in proportion
168 Cairo : If you look at the cost of the FF mile program to administer, plus the income of credit card affinity fees, ALONE, yes it would be profitable, modest
169 Avek00 : AIR CANADA AGREES TO SELL 35 PERCENT OF AEROPLAN TO ONEX CORPORATION MONTRÉAL-January 27, 2003-Air Canada and Onex Corporation announced today that t
170 Chgoflyer : Delta has tried MQM miles based on dollars spent with the company each year and uses them to gain skymiles status.. TWA did a similar type program. I
171 Bond007 : Why don't you show us some of your 'internal' research and white papers. I don't see any on this thread - no studies posted that show FF programs are
172 Avek00 : Do realize that first class upgrades (which actually incur nominal incremental costs in terms of loading a meal and providing a couple comp. drinks)
173 Goingboeing : "Value" is simply what one is willing to pay. What was the "value" of Enron in 2000? What is it's "value" today?
174 Goingboeing : Those "studies" also fail to show the financials. So it's just the opinion of "experts" there.
175 Cairo : Still thinking the world is flat is analogous to someone who believes that what was once true is always true: like believing that FF programs are rev
176 Bond007 : Goingboeing, please show us some facts - it's gettin rather tiresome. Please let's see some of your financial data. hmm....Accenture say they are the
177 Avek00 : Yeah, its time for the naysayers to put up with some published facts/analyses/press reports indicating that FFps are unprofitable or else shut up. We'
178 Bond007 : What part of "..5% of United’s 2004 operating revenues...only reporting segment with positive earnings for the last four years since 2001...generat
179 Sllevin : Let's take Delta as an example. Delta effectively sold Amex 500 million dollars worth of miles (at a significant discount). Now, those are miles that
180 Cairo : Bond and Avek, You are one student and one person in an unknown occupation arguing with people inside the industry. Why? Do you think we are lying to
181 Bond007 : I don't think you are lying - I just haven't seen one piece of evidence apart from own opinions, that show that FF programs are a 'stupid waste of ti
182 Sllevin : The fact that you consider the 500 million Delta rasied and the 240 million UA raised by the sales of miles to be "valueless" undermines any point yo
183 Tango-Bravo : He indeed is not alone. On more than one occasion while assisting one of my airline's FF elite members, I am almost certain I have "heard" them think
184 Goingboeing : I'll tell you what....I'll show you my financial data as soon as you show me your financial data. Sorry - "myth-reality" isn't strong financial data.
185 Goingboeing : You haven't given us any 'facts' related to financials, other than your say-so. They are moneymakers? Prove it - show the financials. Good luck, sinc
186 Avek00 : In other words, you cannot produce anything published to support your assertions, and therefore have to resort to ad hominem attacks against those wh
187 Bond007 : You haven't been listening have you?? None of it is MY 'say-so', none of it is MY assumptions ! That's just yourself - I've posted my facts. Jimbo
188 Bond007 : Firstly, I don't think you're 'hearing' many say that. I don't what airline you are talking about, but he wouldn't have got a first class ticket on m
189 Goingboeing : I read what you cited...unfortunatly, there wasn't any hard financial data there - just a "myth-reality", which has no more credibility than me linki
190 Goingboeing : How I'd love for an airline to do this...implement value pricing immediately, including the FC cabin.. Disallow any FC upgrades prior to flight time.
191 AirNZ : [quote=Aa757first,reply=3]That is a minimum of $3,540 of revenue in one year, and that is a pretty cheap segment. So would US Airways rather have $944
192 Halls120 : I'm one of those passengers that fly legacy carriers almost exclusively so that I can get the upgrades to business or first. My business travel is mo
193 Tango-Bravo : Bond...... You have demonstrated once again that when you point a finger at Cairo, Goeingboeing and myself for "missing the point" of your claims, yo
194 Bond007 : Duhhh! This has something to do with FF programs?? I see you say he was upgraded, and you know I don't disagree with that since he probably flies eve
195 Halls120 : SWA's free R/T for every 8 flights is a great incentive to those that fly SWA routinely. However, many frequent fliers don't care for the Southwest o
196 Tango-Bravo : I will agree with you that the pricing stupidity practiced by the legacies cannot be shown to have any discernable connection (that I am aware of as
197 Fbgdavidson : The airlines have to see it as insignificant! If they gave top treatment to everyone paying $3600 then 90% of the damn aircraft would get it! You hav
198 Bond007 : I'm still waiting to see these figures! You're still mixing FFPs with airline pricing problems (THE problem) - the fact that some of your FFs pay far
199 Goingboeing : And we're still waiting to see your figures showing the profits....not revenues...profits. What you posted contains zero, zip, zilch in the way of ha
200 Avek00 : To the contrary, you have not provided ANY real world data points or 3rd party evidence to assert your claims. Rather, your arguments rest on a serie
201 Goingboeing : Very true...and all the "facts" cited by Bond are little more than anecdotes...because COSTS AREN'T SEPARATED. There is NOTHING that exists for publi
202 Avek00 : In the meantime, don't wait for others to post facts or data - go find some objective evidence to prove your points.
203 Tango-Bravo : In your case, the costs of the FF programs of UA, AA and DL are being covered, with margin to spare. Nonetheless, it is not the FF program that is pr
204 Post contains links Avek00 : An article with some more hard evidence proving the flat world folks wrong. Canada Finance ACE Aviation Expects to Raise as Much as C$287.5 Mln From I
205 Post contains links Avek00 : United Airlines' undisclosed $15 billion asset If this is being bankrupt, bring it on! For most people, being bankrupt means having no money. For most
206 Tango-Bravo : Perhaps because the "asset" whereof you speak is, in reality, smoke-and-mirrors?[Edited 2005-06-30 01:20:53]
207 Goingboeing : Avek....all they need to do is show something with the revenues from the program, and the costs (direct and indirect) for the program and I'll shut up
208 Tango-Bravo : Alright my friend, I have taken up your challenge and done some math, based on extremely conservative estimates of FFP-incurred costs that are passed
209 Avek00 : See, you're not reading carefully... "Aeroplan Profit Aeroplan had profit of C$21 million on revenue of C$172 million in the first quarter, when ACE
210 Avek00 : With all due respect, you have not - I didn't ask you to make up some numbers based on narrow self-selected variables, I requested you FIND some figu
211 Goingboeing : I don't think you've ever had an arguement that said FF revenues less FF ONLY costs would result in a profit. It's the indirect costs...the ones that
212 Avek00 : Aeroplan is currently wholly-owned by ACE (and thus ACE enjoyed the benefit of Aeroplan's profits), but ACE is seeking to partially spin-off some of
213 Post contains images Bond007 : You're really struggling now aren't you We're talking MILLIONS of dollars profit! Still don't see any data/studies/reports/facts to the contrary....a
214 Goingboeing : Okay...Aeroplan is a wholly owned company. What's their product that THEY produce? Miles? What's their cost of to provide those miles? Not much, since
215 Post contains images Sllevin : Aeroplan did C$509 million in sales last year. One can likely conclude that bigger programs like Skymiles and AAdvantage did even more. I don't know
216 Avek00 : How about you go find some published data that supports your conclusion and share it with us? I'm willing to listen, but you have to support this arg
217 Avek00 : It's more likely that a program like AAdvantage or Skymiles realizes $2.4 million in affinity CC revenues PER DAY, given the revenues of the much sma
218 Goingboeing : Your citations don't document anything. There is no breakdown of the costs to the airline in that press release you cite. Without the airline, an air
219 TAP1972 : Just to add some wood to the fire ...... I think the FFProgrammes should not be based on mileage but in the price you pay..... If between LIS and LHR
220 Jetdeltamsy : That comment has created a lot of irritated responses. What I meant to say was that, in terms of rewarding a customer for being a high-dollar produce
221 Goingboeing : Times must have changed a lot the past few years. When I traveled extensively, I was working for EDS, International Paper, and Sprint...I can assure
222 Avek00 : The programs of the legacies have already done that - big spenders earn Elite status up to 2x as fast, and also receive added enhancements which vary
223 Tango-Bravo : Good observation. Even the airline for whom I work, which has an elite program that may be the ultimate freeloader's paradise among U.S. legacies, is
224 Bond008 : Well, again this is unrelated to FF programs. Of course everyone will choose the lowest fares if it's available. The problem is that the fare was a l
225 Goingboeing : It IS related to FF programs....BUSINESS FLYERS...the ones who would be willing to pay more, are paying less and being rewarded as though they were p
226 Goingboeing : How about if the guy with the PhD and making several hundred grand per year is flying your airline, paying fully refundable coach prices and being tr
227 Post contains images Bond008 : Aaaaaarggghhhh.....WHY is this related to FF programs????? This is ALL TO DO WITH PRICING. They are not paying less because they are business flyers
228 Jetclipper747 : UA has a great program called "Global Services". It is by invitaion only. It is renewed or discontinued once a year based on the revenue a customer or
229 Goingboeing : THAT'S THE POINT...The business flyers ARE paying less. True, it's pricing, but somethings gotta give...either business flyers have to start paying m
230 Goingboeing : For the 10,000 and first time - it's a FF problem because a whole lotta FF members are utilizing the loss leading fares. And they are being rewarded
231 ZSOFN : My Dad spends about £50,000 a year on air tickets but can only afford discount economy fares because of the charitable nature of his work (nightmare!
232 Goingboeing : Let's talk widgets. Let's say your dad sells widgets that cost him $1.00 to make. His "best" customer is paying 99 cents for each widget he buys. And
233 ZSOFN : Fair enough I guess! Only thing is would he rather keep the customer's business anyway (if they didn't want the business they wouldn't offer the "wid
234 Tango-Bravo : Based on the hocus-pocus accounting to which FFPs are subjected (which is apparently legal -- in the same vein as UA's BK scam), FFPs are able to sho
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