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Joined: Thu Jan 29, 2004 1:24 pm

Future Of Frequent Flyer Programs?

Fri Jul 02, 2004 12:58 pm

What is the future of Frequent Flyer programs? They have been around since the early 1980's and could they be something no longer needed or too expensive for airlines to offer?
Many airlines have upped the miles needed to get free flights. Some charge fees to claim, especially on short notice. Many now have expiration dates or shorter expiration times on miles acculmilated. Fewer free seats are available in coach on many routes, especially as smaller aircraft being used. With fewer business/first seats on many flights and aircraft, we now see many fewer chances to get those seats for free or upgrade with miles for. There are billions of unclaimed miles per airline which hurt some airlines accounting situations.
With all these issues, and changes in competition, are we reaching a point where someday soon, Frequent Flyer programs will no longer be around or limited to only the real flight hounds? Could the future be like the FF programs of LLC's like Southwest which only have very limited programs? What do you people out there think about the possibility of the end of programs as we now know them?
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RE: Future Of Frequent Flyer Programs?

Fri Jul 02, 2004 2:03 pm

Well to be honest, I think it would be rather refreshing to have some airlines change their FF program. BA has, I think, a horrible program. Many major airlines have such complicated FF programs, they take ages to figure out alone! I still, to this day, find something new about some airlines FF program that I never even knew about before! Programs offered by WN and Independence Air are much easier to understand for all PAX; simple program for an overall simple airline. They reward you on amount spent or segments flown. DL, for example, reward you based on miles, but if you fly in T class, you get .25 of the actual miles flown, but sometimes you get bonus miles, with a 500 mile min.......I think you get my point!

At the end of the day, there is nothing horribly wrong with the major airlines FF programs, but a few changes wouldn't hurt.

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RE: Future Of Frequent Flyer Programs?

Fri Jul 02, 2004 9:07 pm

EI have decided to essentially drop their FF programme from the end of the summer. Only Gold Teir members will have FF benefits. Shame in my opinion, another move towards a total LCC
The way you cut your meat reflects the way you live....
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RE: Future Of Frequent Flyer Programs?

Fri Jul 02, 2004 9:49 pm

I think FF programs will probably always be around. Just today (or recently) Airtran announced new enhancements to their FF program. In fact it is quite good,so even LCC's are getting in on the game. In a world of extreme competition, every little bit helps.

Air transport is just a glorified bus operation. -Michael O'Leary, Ryanair's chief executive
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RE: Future Of Frequent Flyer Programs?

Fri Jul 02, 2004 10:45 pm

I think FF programs are going to eventually die. They were there started for customer loyalty back then, but these days, price rules, and corporate travel departments are going to book the lowest fare/most convenient travel times, regardless of which airline their employees prefer to fly. And corporate travel departments are the largest single purchaser of tickets for just about every airline. Contrary to what many believe, FF programs DO cost money, and the programs have morphed over the past several years into something that ends up reducing revenue potential, i.e. first class upgrades from reduced coach fares.

The airlines can bend over backwards to try to keep an individuals loyalty, but if the corporate travel department swings a deal with AA, then their employees are going to FLY AA, even if they are super medallion on Delta. And since price rules, there won't be any need for the airlines to offer anything different. Most business travellers can't really justify to their companies why they should pay more to fly Delta when AA is offering a lower fare (no preference to any airline here...just using them as an example). "Upgrade opportunities" isn't a real good business reason to spend more on travel.
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RE: Future Of Frequent Flyer Programs?

Fri Jul 02, 2004 11:35 pm

Several programs isn't really worth much these days due to blacked out days and too few seats available and it looks to me that it is even harder to use miles on our American carriers. I recollect a time a few years ago when I wanted to use my Delta Skymiles miles and I had to fly on Swiss Air because all of Delta's flights were blacked out during this period. To get from FLL to ARN and back I first flew Delta from Fort Lauderdale to Cincinnati and then Cincinnati to JFK where I took Swiss Air to Zurich. I then Continued from Zurich to ARN on Swiss Air as well. The return flight became a nightmare and started out with Swiss Air back to Zurich. Then to JFK where I changed to the Delta flight to Washington Dulles. Changed again to Atlanta. I now thought that I would go on my last flight to FLL but, off course I was wrong. This next flight took me to MIA where we left the plane for about 30 minutes and then went back on the same plane for our final leg up to FLL. I take international flights every month to either South America or Europe and I actually do a lot more internationally flying than domestically so I therefore nowadays always when possible fly to Europe with European carriers and to South America with TAM. To me TAM also is the most superior carrier to South America as well as that they have the best frequent flyer program (especially when you have reached their red level). The fact that they have the most modern fleet of aircrafts is off course just another plus. Frequent Flyer programs create a loyalty to a special airline brand but I believe that the inflation of miles on phone bills, gas and clothing purchases is well on it's way to destroy these programs.
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RE: Future Of Frequent Flyer Programs?

Sat Jul 03, 2004 12:01 am

Unless someone else is footing the bill there is no benefit in having airline "loyalty".

If you look at any destination in Europe there are going to be many fares available from LCC's to national airline seat sales.

There is no way I'm going to pick the highest fare just to satisfy my FF program I'll pick the lowest fare and spend the extra dosh on myself when I get there.

As far as I can see business travel isn't expanding so I guess the days of FF programs are limited.
and with that..cabin crew, seats for landing please.
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RE: Future Of Frequent Flyer Programs?

Sat Jul 03, 2004 12:12 am


FF programs are here to stay for the foreseeable future. God help the first carrier who decides to discontinue their program in today's industry environment.

First, there are statements made in your post that simply don't reflect reality.

Many now have expiration dates or shorter expiration times on miles acculmilated.

Actually, most carriers (UA, NW, AA, CO, DL, F9) allow your miles to remain valid as long as there is activity in your account at least once every three years. In the past, miles expired after a specific period of time with no extensions.

Fewer free seats are available in coach on many routes, especially as smaller aircraft being used.

Quite frankly, unless you worked for any particular carrier's pricing department, how would you know this proprietary information? There are more reasons than just number of seats available that make obtaining an inventoried award seat difficult. Like more FF accountholders and miles that don't expire. As carriers increase ASMs, available award seats increase too. I guess you could make the case that compared to 1990, many of the legacies have lower ASMs today so hence on SOME carriers there are fewer seats available systemwide.

There are billions of unclaimed miles per airline which hurt some airlines accounting situations.

This used to be a huge issue. In fact, at one time, FFP liability was suppressing many carrier's stock prices. But 10 or more years ago the accounting rules were changed. I'm not an accountant and don't remember the exact specifics, but I believe the liability is accounted for only as a free ticket is used. In any case, this is no longer an issue today.

The fact is that the loyalty programs are profit centers for carriers. Even in the worst of times, these programs MAKE money. Program partners aren't just given the miles they hand out to their customers, they buy them. Many of which, you correctly pointed out, are never used.

They also give marketing departments the ability to stimulate additional traffic to new or weak routes and new services such as kiosk check-in, PC check-in or signing up for e-mail promotional messages. Just look at how AA used its AAdvantage Program to battle B6 recently.

And don't forget their original intent, they DO drive loyalty from travelers.

So no, FFPs are too valuable to carriers today to drop them or to limit their usefulness to the program member so as to make them unusable.

If you are unhappy with the program(s) you are currently using, may I suggest Frontier Early Returns. Of course this depends on where you live and your travel habits, but if they are convenient for you, they have a very generous program (free ticket @ 15,000 miles) and I've NEVER had a capacity problem with them.

"To he who only has a hammer in his toolbelt, every problem looks like a nail."

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