If an airline restricted the availability of non-refundable fares, it would cut into business pax who need flexibility in their travel plans. Those pax would simply fly another airline if availability of full Y fares were a problem. Also, if an airline raised the prices of refundable fares comparable to those of other airlines, those same business pax constrained by their corporate travel policies would fly the airlines offering the cheaper refundable/changeable fares. These pax are airlines' bread and butter...biting the hand that feeds you generally isn't a good strategy.
Most of the majors are already aggressively pursuing this strategy. They encourage booking through their websites by charging service fees for bookings made through call-centers and travel agents. It would be interesting to see the % increases in online bookings for the majors since the service fees were introduced last year.
|Quoting UA744Flagship (Thread starter):|
An everyday low fare environment negates the need for
excessive corporate discounts and more unecessary layers of management
The simplified fare structure shakeout is in the works via simplifares. The trick will be to set those rationalized fare structures to levels that generate profit for the airlines. The market appears to be supporting the recent spate of fare increases. Most of the majors are reporting record loads, and this is despite several fare increases over the past few months.
As for moving to a revenue-generation based loyalty program, I think this is a brilliant idea. Reward the customers who actually add the most to your bottom line. Now, this could lead to a FFP where some leisure flyer (with no particular airline/brand loyalty) who books a one-off transpac flight in paid J or F ends up getting top-tier elite status after just one flight. However, that same one-off passenger won't be a regular customer, so the cost of giving him elite privileges such as upgrages, mileage bonuses, etc would be negligible. The biz pax who fly 75-100K miles per year will be spending enough on tix to maintain top-tier status. Rewards/Points/Bonuses would have to be recalculated. Under current systems, a plat getting a 125% mileage bonus would only have to fly two IAH
roundtrips to rack up enough miles for a US-Europe standard coach award (50,000 miles). The revenue-based rewards systems would have to be geared to provide similar results for elite and non-elite tier levels to remain competitive with airlines offering traditional mileage-based programs.