cchan
Posts: 951
Joined: Sat May 17, 2003 8:54 pm

How Does FFPs Work For Airlines?

Fri May 23, 2003 4:52 pm

After reading the thread on how codeshare works, I'm quite interested to know what benefits airlines get from their frequent flier partners:

1. If a member of UA FFP travel on LH, what does LH get from UA, and what does UA get from LH?

2. If a member of UA FFP redeem his/her miles on a flight operated by LH, what does LH get, and does UA have to pay?
 
Skymonster
Posts: 3428
Joined: Fri Oct 12, 2001 7:53 pm

RE: How Does FFPs Work For Airlines?

Fri May 23, 2003 7:58 pm

1. If a member of UA FFP travel on LH, what does LH get from UA, and what does UA get from LH?

If a UA member travels on LH, then ultimately LH get the ticket revenue. However, the miles that the passenger accrues are held in UA's frequent flyer program, and (assuming UA do this - many carriers do now) the liability for those miles in carried in UA's balance sheet. In order to offset that liability, for which UA would have received no revenue, invoice and payment for the miles takes place, with UA receiving money from LH. The same applies if the UA member gets miles as a result of hiring a car, or staying in a hotel, that is a UA partner. The rates for miles are rarely revealed.

2. If a member of UA FFP redeem his/her miles on a flight operated by LH, what does LH get, and does UA have to pay?

As above but in reverse. LH invoices UA for the ticket (not necessarily the normal revenue fare though), UA pays LH, and the liability for the miles can be removed from UA's balance sheet (assuming they accrue miles as balance sheet items, as some carriers do).

Andy
There are old pilots and there are bold pilots, but there are no old bold pilots

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