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Why FF Programs Don't Work  
User currently offlinedelta2ual From United States of America, joined Dec 2007, 620 posts, RR: 1
Posted (1 year 7 months 6 days 7 hours ago) and read 9415 times:

Interesting article on Forbes:
http://www.forbes.com/sites/larryolm...-and-what-delta-is-doing-about-it/

I've always thought WN's recent(ish) program changes made the most sense: reward the people who spend the most money.
DL's new system is a step in the right direction, but they should go further. I hope UA follows suit.

From the article: "Imagine a bank credit card that rewarded you based on how often you charged things rather than how much you spent. It’s a ridiculous concept bankers would never go for – but airlines almost all think this way."

Why do many airlines continue to give perks to someone who flew 25,000 miles, but may have spent $3,000 while ignoring those who flew one business class trip at $8,000 but only 10,000 miles?


From the world's largest airline-to the world's largest airline. Delta2ual
51 replies: All unread, showing first 25:
 
User currently offlineFWAERJ From United States of America, joined Jun 2006, 3754 posts, RR: 2
Reply 1, posted (1 year 7 months 6 days 7 hours ago) and read 9384 times:

Quoting delta2ual (Thread starter):
I hope UA follows suit.

I think AA will also follow suit with the post-merger 2014 AAdvantage (or whatever they want to call the new FFP) program.



"Did he really need the triple bypass? Or was it the miles?"
User currently offlineby738 From Tonga, joined exactly 14 years ago today! , 2326 posts, RR: 1
Reply 2, posted (1 year 7 months 6 days 6 hours ago) and read 9360 times:

I don't really understand the argument. Im not sure you can compare banks, debt and credit with full fare paying income

User currently offlineFWAERJ From United States of America, joined Jun 2006, 3754 posts, RR: 2
Reply 3, posted (1 year 7 months 6 days 6 hours ago) and read 9210 times:

Quoting delta2ual (Thread starter):
magine a bank credit card that rewarded you based on how often you charged things rather than how much you spent. It’s a ridiculous concept bankers would never go for

One of the biggest banks here in FWA (iAB Financial) has a checking account that rewards you a flat rate per debit card transaction based on how often you use your debit card: 5 cents per swipe for 1-9 Visa Debit purchases and 10 cents per swipe for 10 or more.

Link: http://www.iabfinancial.com/personal-banking/checking#plastic

[Edited 2013-02-16 12:10:30]


"Did he really need the triple bypass? Or was it the miles?"
User currently offlineAA737-823 From United States of America, joined Mar 2000, 5824 posts, RR: 11
Reply 4, posted (1 year 7 months 6 days 5 hours ago) and read 8978 times:

Quoting delta2ual (Thread starter):
Why do many airlines continue to give perks to someone who flew 25,000 miles, but may have spent $3,000 while ignoring those who flew one business class trip at $8,000 but only 10,000 miles?

Because a person who took ONE expensive trip is NOT a loyal customer; a person who took eighteen cheap trips wholly within the state of California or Texas or on the eastern seaboard where there is COMPETITION..... is a loyal customer.

NOT EVERYONE is a full-fare passenger, traveling for business, with his/her company footing the bill.

Most such passengers don't actually choose the carrier- their company's travel representative does that, or, the company has a pre-negotiated travel contract with a carrier or carriers. Also not much loyalty on the part of the individual.


User currently offlinenycdave From United States of America, joined Aug 2010, 547 posts, RR: 1
Reply 5, posted (1 year 7 months 6 days 5 hours ago) and read 8927 times:

It's a loyalty program, not a rewards program. That's the key argument in favor of the mileage/segments structure.

But, but, but... I don't know that you could make a good financial argument saying "we'd make more money getting a paying customer in that coach seat from PHL-ROC a few more times, than getting one J class customer flying PHL-FRA"

I think the payment-based system is the wave of the future, but I kind of hate it. Rich people already get plenty of benefits in this world of ours... That, and I used my UA miles to buy everyone presents for xmas this year...  


User currently offlineORDBOSEWR From United States of America, joined Jun 2011, 440 posts, RR: 0
Reply 6, posted (1 year 7 months 6 days 4 hours ago) and read 8891 times:

Or one could have a company that has agreements with every airline and tells its employees you are to select the airline that is the cheapest regardless of ff. Which is my company.
or you could live in a city that has a fortress hub and you really do not have to many options


User currently offlineLHRFlyer From United Kingdom, joined Apr 2010, 815 posts, RR: 1
Reply 7, posted (1 year 7 months 6 days 4 hours ago) and read 8867 times:

I don't think it's true at all to say frequent flyer programmes don't work. They are an absolutely integral part of the marketing/customer relationship management strategy of most airlines. This is why most airlines have resisted the temptation to sell off their programmes.

Whilst Delta is changing their system to recognise money spent more than simply miles accrued, this doesn't mean the whole system is flawed. And a key point about frequent flyer programmes is that they're not only there to reward revenue you would receive anyway (ie from large corporate customers) but also to encourage extra revenue which you may not ordinarily have received (ie discretionary leisure passengers).

To be honest, I think that those that game the system by taking unnecessary trips are very much in the minority and most regular flyers would balk at taking unecessary flights/more complicated routings to earn status.


User currently offlineAndyEastMids From United Kingdom, joined Jan 2001, 1017 posts, RR: 2
Reply 8, posted (1 year 7 months 6 days 4 hours ago) and read 8727 times:

The thing that's missing from the story is that most frequent flyer programs are profitable for the airlines that operate them - they may not always target the right customer, but they tend to be profit centres, not loss-leaders. Several airlines have monetarised their programs by floating them as stand alone companies, and others are considering it. Where programs have been monetarised, the separate company has tended to be profitable (and in one case the frequent flyer program had a higher market cap than the airline it operates on behalf of).

And in case, if anyone is wondering why the programs tend to be profitable... Changes to accounting rules in many countries have resulted in many airlines having to represent their frequent flyer liabilities on their balance sheets. As customers travel on different partner airlines, there is a cashflow from the airline carrying the passenger (the airline that recieves the revenue) to the airline with whom the frequent flyer is a member (the airline that carries the liability for the points / miles earned). Add to this the revenue airlines make from selling points / miles to none air partners such as credit cards, supermarkets, etc. and the income that a popular frequent flyer program generates can be significant. OK, so there's a coat to proving awards, but those costs tend to be low if the airline has its revenue management right as most awards tend to go into expected unsold inventory - that's why awards that guarantee a seat on any available flight cost a lot more points / miles than "saver" awards that book into unsold inventory. Anyway, the cost of an award is typically low, whilst the airline can be earning quite a lot of money from points members accrued with airline and other partners. Add to this the fact that some members never redeem their points / miles, and many points / miles expire and are lost - in these cases the liability gets dropped and any liability on the balance sheet can be converted into profit.

BTW, the above is why few airlines are likely to drop frequent flyer programs...

Now, returning to the issue of whether they target the right customers, we used to use a quadrant that essentially divided members of the frequent flyer program into several groups - frequent (F) or infrequent (I) travellers, profitable (P) or unprofitable (U). We then aimed to assign each customer to one of four categories - frequent/profitable(FP), infrequent/profitable(IP), infrequent/unprofitable(IU), frequent/unprofitable(FU). Having worked out whether a member was FP, IP, IU or FU, then broadly it was possible to devise a strategy for the members in each of these four groups:

FP - Frequent, Profitable
Do everything you can to retain these customers, these are your ideal customers
Objective - retain, grow

IP - Infrequent, Profitable
Nurture these customers, don't upset them as they may start travelling more regularly
Objective - retain, move to FP (e.g. incentivise them to travel more)

IU - Infrequent, Unprofitable
Let these customers be as they're not doing you much harm, but don't do much for them as you don't really need them and they're not doing much for you
Objective - develop, aim to increase revenue (e.g. incentivise them to higher spend and move to IP)

FU - Frequent, Unprofitable
FU says it all, you don't need these customers
Objective - move to another airline / exclude from the program (e.g put obstacles in place to discourage their use of the program)

Clearly, this is a fairly simplistic model and more sophisticated member categorisation went on, but it points to the general direction we (and other airlines) were moving.

We also debated whether it was important to have each loyal customer in the program, or whether it wasn't too important if customers who were loyal anyway didn't join. The theory postulated was that a loyal customer outside of the program cost nothing whereas a loyal customer in the program did carry some cost associated with servicing their membership. The conclusion was that it was most important to track each loyal customer's travel and spend, to be able to communicate with them, and offer them incentives to remain loyal even if there was some cost associated with doing do.

Andy


User currently offlineBMI727 From United States of America, joined Feb 2009, 15744 posts, RR: 27
Reply 9, posted (1 year 7 months 6 days 4 hours ago) and read 8665 times:

Quoting delta2ual (Thread starter):
Why do many airlines continue to give perks to someone who flew 25,000 miles, but may have spent $3,000 while ignoring those who flew one business class trip at $8,000 but only 10,000 miles?

Because they're stupid.

Quoting AA737-823 (Reply 4):
Because a person who took ONE expensive trip is NOT a loyal customer; a person who took eighteen cheap trips wholly within the state of California or Texas or on the eastern seaboard where there is COMPETITION..... is a loyal customer.

It's not loyalty, it's the bottom line that counts. Quarterly results don't count how many repeat customers you have, they count profit and loss. You could have the most loyal customers on the planet, but if it doesn't translate to money it doesn't help you a bit.



Why do Aerospace Engineering students have to turn things in on time?
User currently offlineAeroWesty From United States of America, joined Oct 2004, 20640 posts, RR: 62
Reply 10, posted (1 year 7 months 6 days 3 hours ago) and read 8591 times:

Quoting delta2ual (Thread starter):
Why do many airlines continue to give perks to someone who flew 25,000 miles, but may have spent $3,000 while ignoring those who flew one business class trip at $8,000 but only 10,000 miles?

Because you have to go back to the very beginning of FF plans to understand them. FF plans were based upon no elite levels at all, and there wasn't the huge gulf between the lowest and highest fares as we have today.

The first awards were for either free First Class tickets or % off Coach. Upgrades were available for 12,000 miles, which WAS revenue-based to a degree. It was set at that level by AA so that their longest route travelers at the time, LAX-BOS, had to fly at least the same number of trips as other transcon flyers in order to earn a free upgrade.

Lots more info here: http://www.insideflyer.com/articles/article.php?key=2926

There's also some element of revenue qualification in the FF plans—if you have a high enough elite level, some airlines will automatically book you into First with a high enough Coach fare.

They've a long way to go to be truly equitable in rewarding volume of dollars spent vs. miles flown, but some of these discrepancies have been addressed, meekly, admittedly, over the years. It's not as if the airlines are totally blind to the problems in rewarding their HVCs appropriately.



International Homo of Mystery
User currently offlineAA737-823 From United States of America, joined Mar 2000, 5824 posts, RR: 11
Reply 11, posted (1 year 7 months 6 days 3 hours ago) and read 8539 times:

Quoting BMI727 (Reply 9):
It's not loyalty, it's the bottom line that counts. Quarterly results don't count how many repeat customers you have, they count profit and loss. You could have the most loyal customers on the planet, but if it doesn't translate to money it doesn't help you a bit.

Sure, but none of that has anything to do with the frequent flyer program. If the carrier isn't charging enough to earn money on their basic routes, that's their problem, not mine.
If you want to reward passengers in higher classes more (like carriers already do- 150% bonus miles in J on UA, for example, et cetera), then go for it.
A loss making airline with your so-called "most loyal customers on the planet" is not a malfunction of the loyalty program; indeed, it indicates that the program is performing its de facto function!


User currently offlineDTWHKG From United States of America, joined Feb 2010, 43 posts, RR: 0
Reply 12, posted (1 year 7 months 6 days 3 hours ago) and read 8520 times:

Quoting delta2ual (Thread starter):
Why do many airlines continue to give perks to someone who flew 25,000 miles, but may have spent $3,000 while ignoring those who flew one business class trip at $8,000 but only 10,000 miles?

Very simple - "high value customers" are usually in one of the two categories:

- those that don't have a choice of carrier (because they want non-stop flights and there's only one carrier that offers non-stop to where they travel). These guys don't need to be rewarded. They will continue to fly that carrier even without a frequent flyer program.

- those that are rich enough that they usually pay for premium cabins and thus don't need the perks of the frequent flyer program.

On the other hand, many "low-value customers" do have a choice of carrier when they travel. Although they pay discounted fare, airlines need them to fill the plane (which is why airlines offer the discounted fare in the first place), so it makes sense to give them incentives to fly with a certain carrier.


User currently offlineDTWHKG From United States of America, joined Feb 2010, 43 posts, RR: 0
Reply 13, posted (1 year 7 months 6 days 3 hours ago) and read 8488 times:

Quoting delta2ual (Thread starter):
Why do many airlines continue to give perks to someone who flew 25,000 miles, but may have spent $3,000 while ignoring those who flew one business class trip at $8,000 but only 10,000 miles?

Another point - Loyalty is NOT defined as paying $1000 for DTW-MSP when the lowest fare is $1000. Yes, it is a very profitable fare, but one pays it not because he is 'loyal' to the airline, but because he failed to plan his trip in advance, or there's only one carrier flying DTW-MSP nonstop, etc.

Loyalty is paying $330 for JFK-LAX when another airline is offering a fare of $300.


User currently offlineBMI727 From United States of America, joined Feb 2009, 15744 posts, RR: 27
Reply 14, posted (1 year 7 months 6 days 3 hours ago) and read 8445 times:

Quoting AA737-823 (Reply 11):
If the carrier isn't charging enough to earn money on their basic routes, that's their problem, not mine.

Why should they reward you more if you only ever buy the cheapest product they have?

Quoting AA737-823 (Reply 11):
If you want to reward passengers in higher classes more (like carriers already do- 150% bonus miles in J on UA, for example, et cetera), then go for it.

Why bother with that when you could just do away with miles for the most part and do it by revenue?

Quoting AA737-823 (Reply 11):
A loss making airline with your so-called "most loyal customers on the planet" is not a malfunction of the loyalty program; indeed, it indicates that the program is performing its de facto function!

Not if it isn't helping profitability. The point is that loyalty in and of itself doesn't help you if it doesn't translate to the bottom line. Frequent flier programs are, at the core of it, a quid pro quo with the airline. It's only fair that airlines give more reward to those who do the most for them, which means those who spend the most money.



Why do Aerospace Engineering students have to turn things in on time?
User currently offlinejedward From United States of America, joined Nov 2005, 133 posts, RR: 0
Reply 15, posted (1 year 7 months 6 days 1 hour ago) and read 8192 times:

Why Frequent Flyer Programs Do Work

1. Airlines *already* reward the customer who spend more by fare class bonuses and I would wager this trend would continue. Case and point: the proposed DL changes for the 2014-2015 year and the recent UA M+ changes to have a COS bonus on B+ fares. Expect to see more of the same going forward where carriers bonus based on fare class *and* the revenue picture becomes more prominent in how elite status is achieved.

Moreover, a correlation exists between the price of the ticket and distance flown (a IAH > DXB ticket will cost more than an IAH > LAX ticket in the corresponding class and fare restrictions) which does relate to revenue, and when factored into the COS bonus, there *already* is a signifanct correlation between $'s spent and points earned.

2. Selling those opaque points to partners is a billion - yes, that's a "B" - business for the carriers *and* consumers are willing to pay more to the partners for cobranded products. (For example, a customer may pay a higher annual fee or APR on their co-branded airline credit card than they would on another card.) As long as companies are willing to pony up hard cash to the carriers for the loyalty point, the carriers would be foolish to do anything that might kill their golden goose.

Case and point of this is how DL is exempting customers who spend more than $25,000 on a co-branded AX from the upcoming MQD (revenue) requirement for medallion status. DL and the others make real cash from the selling of their points and the fact that their allowing a "backdoor" into medallion status via spend on a partner product is quite telling.

3. The value of a point is opaque (it's hard to *directly* and *clearly* say 1 point equates to $0.xx). It is in both the airlines' and the consumers' best interest to keep this opacity intact for a plethora of reasons but mainly because of...

4. Tax implications. Bottom line is the IRS has deemed FFPs awarded to the traveler when someone else, like an employer, foots the bill could be taxable. However, as it stands now attempting to figure out a way to economically tax this benefit outweigh the gains from doing so, and as such, all those points - those thankfully opaque points! - business travelers earn whilst someone else pays for their expensive tickets are safe from the wandering eyes of the taxing authorities.

Should a direct correlation become the standard (e.g. the WN/VA/B6), a major roadblock to the possibility of taxation is removed. For example, if $1 spent = 1 point that can be used for a $0.01 discount on future travel (or hotels, gift cards, etc.) it would be much easier to calculate the economic benefit compensated to the account holder. And once that number can be consistently, easily, and clearly derived a major roadblock to any tax scheme against FFPs would be removed.



As Christ died to make men holy, let men die to make us rich. --S.C.
User currently offlineDesertAir From Mexico, joined Jan 2006, 1462 posts, RR: 0
Reply 16, posted (1 year 7 months 6 days 1 hour ago) and read 8088 times:

I think alot depends on the frequency of travel. I am a Southwest Rapid Rewards Member. I fly SAN-SMF once a month for family reasons. I have their Signature Credit Card, use their rental car partner Budget and stay at La Quinta their hotel partner. I receive double points for WN, Budget and LQ. I convert LQ points into WN miles, and recieve 600 points for every Budget rental. I end of paying for a one way flight each month. It works for me.

User currently offlinerwessel From United States of America, joined Jan 2007, 2353 posts, RR: 2
Reply 17, posted (1 year 7 months 5 days 16 hours ago) and read 7131 times:
Support Airliners.net - become a First Class Member!

Quoting delta2ual (Thread starter):
Why do many airlines continue to give perks to someone who flew 25,000 miles, but may have spent $3,000 while ignoring those who flew one business class trip at $8,000 but only 10,000 miles?

But they don't ignore the big spenders. Consider United:

http://www.united.com/CMS/en-US/Mark...tComm/Promotions/Pages/united.aspx

Basically anyone traveling in any of the full fare classes will earn 125-250% of the nominal mileage. And a 50% bonus towards premier status.


User currently offlineClassicLover From Ireland, joined Mar 2004, 4636 posts, RR: 23
Reply 18, posted (1 year 7 months 5 days 16 hours ago) and read 6923 times:

Quoting DTWHKG (Reply 13):
Loyalty is paying $330 for JFK-LAX when another airline is offering a fare of $300.

Hear, hear!

A lot of times I have been able to travel from point A to point B using a low cost carrier. Instead, I stick with paying a little extra with a oneworld alliance airline - I get points, lounge access and treated nice and pay a bit extra for the privilege.

Now, FF programmes are profitable. The Qantas programme has been the most profitable segment of the company after the domestic network for several years.

At the 2 November 2012 AGM, the CEO stated -

"Qantas Frequent Flyer returned Normalised Underlying EBIT of $231 million, a record result."

$231 million in earnings before interest and tax. When you do it right, you can make a bundle of money off frequent flyer alone. Qantas also have a structure in their programme no different from other carriers - 5 tiers (Bronze entry level, Silver, Gold, Platinum - and now Platinum One for the very highest), an invite only lounge (Chairman's Lounge) for politicians, CEOs and big spenders... and they are part of an alliance.

I think what needs to be looked at is why other programmes are not profitable. One thing US carriers do which I think is pretty bad is that they give far too many elite status upgrades. On other airlines, you usually have to cash in miles for an upgrade - end of story.



I do quite enjoy a spot of flying - more so when it's not in Economy!
User currently offlineFlyDeltaJets From United States of America, joined Feb 2006, 1882 posts, RR: 2
Reply 19, posted (1 year 7 months 5 days 15 hours ago) and read 6616 times:
Support Airliners.net - become a First Class Member!

What works for 1 industry doesn't always work for another. Miles are to reward loyalty in an area where there is a vast choice. Banking is not really set up like that. Once you choose a bank you have technically already made your choice going forward. If airlines were like banks you would have chosen to fly a certain airline for most of your trips in advance. If banking was like airlines every time you wanted to deposit money you would search for banks on line or go to a banking agency to see what bank was offering the best rates or incentives and deposit money in possibly a different bank every time. So to relate accrual of miles to banking is a correlation that has a very loose connection.


The only valid opinions are those based in facts
User currently offlineAlwaysOnAPlane From United Kingdom, joined Sep 2010, 305 posts, RR: 2
Reply 20, posted (1 year 7 months 5 days 14 hours ago) and read 6292 times:

Quoting delta2ual (Thread starter):
Why do many airlines continue to give perks to someone who flew 25,000 miles, but may have spent $3,000 while ignoring those who flew one business class trip at $8,000 but only 10,000 miles?

The person flying one business class trip a year at $8,000 would have no real need for FFP perks, pretty much everything is included in that fare that is a perk for a Y passenger with with status.


User currently offlinemcdu From United States of America, joined Apr 2005, 1466 posts, RR: 17
Reply 21, posted (1 year 7 months 5 days 14 hours ago) and read 6248 times:

Quoting delta2ual (Thread starter):
I hope UA follows suit.

UA does reward for money spent. The highest revenue passengers are given Global Service level of reward. This is the highest reward level available at UA and it is a dollar threshold that gets you to this elite service.


User currently offlinevegas005 From Switzerland, joined Mar 2005, 320 posts, RR: 0
Reply 22, posted (1 year 7 months 5 days 14 hours ago) and read 6239 times:

FF programs make wads of cash for the airlines and allow folks the perks that come with being loyal.

I have been Star Alliance Senator and One World Platinum for some time. Recently I took a Southwest flight and was not happy with the rude agent who sort of checked me in, the cattle call boarding and the overall quality of the service. Fact is I have been spoiled by first class check-in (regardless of ticket purchased), priority security line, lounge access and priority boarding. Yep ... I'll pay the extra dollars to fly on the airline that gives me the benefits.


User currently offlineCXfirst From Norway, joined Jan 2007, 3068 posts, RR: 1
Reply 23, posted (1 year 7 months 5 days 13 hours ago) and read 6012 times:

Quoting vegas005 (Reply 22):
... I'll pay the extra dollars to fly on the airline that gives me the benefits.

Same applies to me. I'm Star Gold, but don't have any other high level status. I've since gotten used to premium check-in and lounge access, therefore, lately, I've almost exclusively flown Singapore Airlines or Thai to Europe, either direct to OSL, or if to another city, then flown SK or LH to OSL, from PER, simply because in a multi-segment journey, lounge access has become such a huge benefit for me.

Therefore, due to FF programs, I've flown SQ or TG, when cheaper, and sometimes faster options have been available.

This summer is the first time I've travelling back not 100% on Star Alliance for quite some time (CX to HKG from PER), but from HKG I'm travelling on TK. Star Alliance, yet again.

-CXfirst



From Norway, live in Australia
User currently offlinexdlx From United States of America, joined Aug 2008, 658 posts, RR: 1
Reply 24, posted (1 year 7 months 5 days 11 hours ago) and read 5136 times:

Simply amazing.... only a few readers here will remember but DL FF program was revenue driven before Skymiles.

About 30yrs or so ago the program inception was simple... Regular FF PAID to UPGRADE only from Y/Y06/YN6 fares
according to milage of the segment: Get this: $15 under 500m / $30 500-1500m / $45 1500m+.

In other words they HAD to buy a Y/Y06/YN6 fare to be ELEGIBLE for the upgrade offer.
This rewarded the traveler that had spent more to begin with, and minimized ques for STBY ETC ETC ETC.
But after seeing 30 years of FF programs, in my opinion this was the fairest and most revenue oriented program of its kind.

First of all it forced those that WANTED to UPGRADE to PAY for IT !!! not get it because they flew ATL-MCO-ATL56 times last year for $169RT each time.

Go back to basics ..... it always works !


25 cschleic : Exactly. Many offer more miles/points for full fare, first, business, etc. There is some difference based on how much you pay.
26 jayunited : I think FF programs serve their purpose which is to keep customers flying with either a particular airline or with that airlines alliance group i.e. S
27 cosyr : FFP's are different things to different people. I am a lowely Silver on UA, which I work very hard to be. I do not fly for work, and no one else pays
28 777STL : There's two sides to that though. A customer who flew on one $25k international F ticket has generated much more for the bottom line than someone who
29 cosyr : But as they are set up now, they can reward both the loyal lower revenue customers and the one time business class customer. Why throw out people tha
30 777STL : The idea is to weed those people out because they just aren't valuable. If you read the article, that's DL's stated intent, and in doing so, they're
31 EIDL : Airlines should really just move to what most hotel programmes have done for years - work entirely on cash spent or do it so that status comes from fl
32 Pu : . . As Jedward intimated, what Forbes and most of you are missing is that even if SkyMiles or AAdvantage or MileagePlus earned the repeat business of
33 Post contains images Fallap : I've given up on Loyalty Programs recently, I tried to gamble and use Flying Blue, because I was tempted by the fact that your miles never expire (as
34 Cubsrule : I have some experience being one of those passengers. What you have said is more or less true for buying the international J ticket. But most years,
35 Post contains images lightsaber : FWIW, the FF programs keep certain customers loyal. That works. Everything else is keeping expenses below costs and since: I fall into that camp. I'm
36 DTWHKG : But who would pick a pure fare-based FFP, where one would need an arm and a leg to redeem for premium cabin awards? If one consistently pays high far
37 Gonzalo : I guess the main focus in this thread and the Forbes article is about FF programs of US based airlines . The FF program I know better ( LAN ) is a mix
38 spacecadet : But that's not where the value is for a points-based ticket. I'll bet if you checked, you could have gotten a business class seat for only a few more
39 Cubsrule : My point is different. I don't necessarily look at the frequent flier program when picking a carrier. It's more about other things, like schedule.
40 FWAERJ : Exactly. One of my friends, a former UA exec, said that PMUA ran MileagePlus as its own business unit, and I'm sure that's even more the case today.
41 Viscount724 : KL/AF Flying Blue has recently stopped charging the fuel surcharge but only on flights within Europe. They still charge the fuel surcharge in additio
42 cosyr : When airlines have as much trouble making money as they do, I would hope they're not trying to weed out anyone that doesn't lose them money. Silver E
43 Cubsrule : How do you know that all silvers are profitable?
44 lightsaber : The airlines use FF programs to try and have fewer of those sales. I believe those flights failed as they didn't have the loyal customer base that FF
45 chieft : I miss one point in this very interesting discussion: A lot of people here talk about "what the customer pays" and " the customer pay more for loyalty
46 Cubsrule : That is, indeed, the correct question, but in your answer, remember that more loyal doesn't necessarily mean more profitable.
47 spacecadet : My brother flies for his business and they let him fly whoever he wants and he keeps the miles. I think that's common at most companies, at least for
48 cosyr : With the razor thin margins that airlines have, every dollar of revenue counts. Some of the benefits airlines offer Silvers cost next to nothing (opp
49 Cubsrule : Yes and no. With load factors as high as they are, selling a cheap seat has a definite opportunity cost in that that seat cannot be filled with a pas
50 Post contains images lightsaber : But more loyal means not switching airlines for a slight cost savings. I'll use one relative who used to fly AS to 'keep status.' But she fell of the
51 Cubsrule : Except for those who don't value their time at all (e.g. students), there aren't many times that the schedules are close enough that it's all about p
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