jetdeltamsy
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Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 4:20 am

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.
 
geoffm
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 5:05 am

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.
 
Ken777
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 5:12 am

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.
 
aa757first
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 5:16 am

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
 
commavia
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 5:18 am

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.
 
AEROFAN
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 5:30 am

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.
 
fbgdavidson
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 5:40 am

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
 
jacobin777
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 5:44 am

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!"
 
sk601
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 5:47 am

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....
 
jetdeltamsy
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 5:52 am

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.
 
DLPMMM
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 5:53 am

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.
 
JrMafia90
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 6:01 am

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.
 
AEROFAN
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 6:02 am

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
 
flyAUA
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 7:22 am

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!
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fbgdavidson
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 7:38 am

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
 
flyAUA
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 8:03 am

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
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Trolley Dolley
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 8:16 am

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.
 
1MillionFlyer
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 8:19 am

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.
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flyAUA
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 8:23 am

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?
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PanAm_DC10
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 8:49 am

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
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Trolley Dolley
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 8:53 am

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.
 
aa757first
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 9:00 am

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
 
AirScoot
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 9:01 am

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.
 
flyAUA
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 9:03 am

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
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Checo77
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 9:09 am

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.
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afay1
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 9:15 am

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 experiences) and award me the points, who is anyone else to complain about their status being watered down? If the airline is willing, why should snooty customers moan about it? I don't understand. Business is business. If a price was offered it isn't my fault someone else paid more. It isn't cheating.

While it is true there will always be people trying to take advantage of whatever they feel entitled to, clearly the benefits to the airlines and the travellers of such FF programs FAR outweighs doing away with them...
 
ikramerica
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 10:01 am

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 points/segments.

Second, deep discounted seats often get 50% miles and no elite qualifying, though for airlines like CO, this is negated when you book online. As booking online saves the airline money in Service reps (finding the right flight can take from 10 minutes to 2 hours of research time).

Third, the rewards levels have gone up on most carriers since the early days. It takes more and more miles to get a ticket, and is harder to find the "standard" rewards. Again, this limits the "buying power" of discounted ticket earners, while the bonus earning and high spending credit card types (which gives the airlines real revenue), do get to fly for free as they often have more miles than they know what to do with anyway.

Fourth, the international upgrades on many airlines now come with a fee for discounted fares. And on many three class airlines, the econ to First double upgrade with miles has been eliminated. There was always a full fare/discounted upgrade distinction in terms of miles, but now you need to use more miles AND pay more for international upgrades, which discourages cheapskates from sucking up the high revenue international business and first seats.

Add those together and you can see that already the high yield passengers get much more of a reward for paying more. The low yield customers don't get access to many high revenue seats for the airlines. Upgrades only come on low yield routes where the first class would be empty, and not international. And free tickets are mostly econ, and on routes where the plane doesn't usually fly 100% full, so that extra seat isn't costing them much.

yet the programs still reward the cheapskate but LOYAL flyer, as their low margin ticket is still filling the off-hour flights and have value.
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AEROFAN
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 10:48 am

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 ticket indirectly how? Explain that one to me. And who pays is not relevant - explain that one to me as well.

The airline should differentiate between the corporates who travel on 45-50% discounted ticket and those pax who pay full fare. If this is not obvious to you well -well what more can I say
 
Skymonster
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 7:57 pm

Quoting Aerofan (Reply 27):
The airline should differentiate between the corporates who travel on 45-50% discounted ticket and those pax who pay full fare. If this is not obvious to you well -well what more can I say

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 decided that the corporate's volume/dollar-spend is important enough that they'll discount AND give the same number of miles!

Andy
There are old pilots and there are bold pilots, but there are no old bold pilots
 
MidnightMike
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 8:28 pm

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. 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 frequent flyer programs for the airlines are money makers. There are numerous programs in place that people can generate points, not just flying with the airlines, such as hotel agreements & rental car partnerships, in turn, the companies pay the airlines a certain amount of money for this, not all the people that collect points actually cash in their frequent flyer points.

What you do not understand, is that the seats for frequent flyer members, are not free, one way or another, they are actually paid for.

Besides, airlines only block out maybe 5% - 10% of their seats for frequent flyer members, the highest load factor is on average around 86%, so, in theory, the airlines should have empty seats to offer.
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Starlionblue
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 8:30 pm

Quoting Jetdeltamsy (Thread starter):
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.

Yes it does... And has been said, if you only fly very discounted tickets, it takes much longer to get status.

Quoting Ikramerica (Reply 26):
yet the programs still reward the cheapskate but LOYAL flyer, as their low margin ticket is still filling the off-hour flights and have value.

Talking about me now are we  Wink. Well cheapskate or no I still spend several tens of thousands of dollars at AA each year. Even at the lowest fares it's the only way to get into the high tiers. So why shouldn't I be rewarded?
"There are no stupid questions, but there are a lot of inquisitive idiots." - John Ringo
 
zeekiel
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 8:52 pm

Quoting MidnightMike (Reply 29):
The frequent flyer programs for the airlines are money makers. There are numerous programs in place that people can generate points, not just flying with the airlines, such as hotel agreements & rental car partnerships

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 exchange for airlines marketing their products as part of packages, FF bonus points and other deals.

Quoting MidnightMike (Reply 29):
maybe 5% - 10% of their seats for frequent flyer members

Exactly. Each airline has a complicated yet hopefully efficient algorithm for allocating fares and fare classes. The revenue management systems they use, they won't reveal  Smile.

Cheers

Zeekiel
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AirScoot
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 9:29 pm

Quoting Zeekiel (Reply 31):
Exactly. Each airline has a complicated yet hopefully efficient algorithm for allocating fares and fare classes. The revenue management systems they use, they won't reveal

I think they throw darts at a printed out Excel spreadsheet  Wink
 
B747-437B
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 9:33 pm

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 standalone entity. They will be spinning off 12.5% of the company to raise C$250m in cash.

Anyone who thinks airlines aren't making HUGE money on their FF programs is a fool.
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richardw
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RE: Eliminate Frequent Flyer Programs?

Fri Jun 24, 2005 9:39 pm

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 functionalities and member newsletters. I think I'm in about 6 programmes, not many miles because I only fly on deeply discounted tickets. I am also a member of that other programme, which is the loyalty to price or a good deal, but you don't get a card with that one.
 
N77014
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RE: Eliminate Frequent Flyer Programs?

Sat Jun 25, 2005 12:27 am

The data collected by carriers about the habits of their best customers alone make keeping FF programs worth it.
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ssides
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RE: Eliminate Frequent Flyer Programs?

Sat Jun 25, 2005 12:44 am

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.

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 it is really, really important to have some sort of elite status. For example, if you're Executive Platinum on AA, you get unlimited upgrades on full-fare tickets, along with tons of other free stuff. You're advocating a system that already exists.
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PA110
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RE: Eliminate Frequent Flyer Programs?

Sat Jun 25, 2005 1:15 am

By creating elite qualifying miles, I think many airlines have started to differentiate between a simple loyalty customer and a true frequent flyer. The loyalty customer who takes one or two trips a year, has an affinity credit card, earns grocery miles, etc... will take far longer to earn rewards, and is not have access to other perks offered to elite status fliers.

A.nutters can continue to argue high value tickets versus cheap fares, but in reality most true frequent flyers - even if purchasing cheap nonrefundable fares - will usually generate far more revenue for the airline than the occasional high end passenger who might not travel as frequently. More often than not, even the most frugal business travelers will end up paying slightly higher fares due to the last minute nature of their plans, and the lack of availability of lower fares.
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YYZYYT
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RE: Eliminate Frequent Flyer Programs?

Sat Jun 25, 2005 1:21 am

Quoting FlyAUA (Reply 13):
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!



Quoting Ikramerica (Reply 26):
As for this "penalize discount fares" argument, it is already done at most carriers

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 accumulation at all.

Quoting Trolley Dolley (Reply 16):
Trolley Dolley

and

Quoting N77014 (Reply 35):
The data collected by carriers about the habits of their best customers alone make keeping FF programs worth it.

I'm sure that is a huge part of it - remember, not only do they track flying habits, but they also have many OTHER spending decisions tracked as well, if the plan inlcudes non-airline partners like Aeroplan does (hotels, car rentals, gas, even retail partners etc...). And this data can also be sold.
 
ikramerica
Posts: 13772
Joined: Mon May 23, 2005 9:33 am

RE: Eliminate Frequent Flyer Programs?

Sat Jun 25, 2005 1:31 am

Quoting YYZYYT (Reply 38):
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 accumulation at all.

forgot to mention that for many airlines, consolidator fares (priceline, cheaptickets) don't earn miles at all.
Of all the things to worry about... the Wookie has no pants.
 
fbgdavidson
Posts: 3563
Joined: Thu Oct 14, 2004 6:25 am

RE: Eliminate Frequent Flyer Programs?

Sat Jun 25, 2005 1:55 am

Quoting FlyAUA (Reply 15):
Fraiser... long time no see

Hi! Have we met before?
"My first job was selling doors, door to door, that's a tough job innit" - Bill Bailey
 
BOAC911
Posts: 280
Joined: Sun Sep 19, 2004 9:47 pm

RE: Eliminate Frequent Flyer Programs?

Sat Jun 25, 2005 2:31 am

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 pay for new fleets of aircraft. Cash still counts, and it will always be more more valuable than accumulated frequent flyer miles.
 
ltbewr
Posts: 12427
Joined: Thu Jan 29, 2004 1:24 pm

RE: Eliminate Frequent Flyer Programs?

Sat Jun 25, 2005 2:42 am

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. They are a valuable tool for marketing and I don't see them dying soon although I do see revisions to limit points on cheap fares, more points required for redemption, and fewer available FF claim seats.
One problem for airlines is that the unclaimed points can be an accounting liability and all airlines have unclaimed points values in the equivilent of millions of tickets. I also think they should limit and be more careful in thier ads for these plans, such as suggesting that everyone will be able to get a free FF flights, 1st class LAX or JFK or ORD to HON. They should also limit the points one can get via affinity credit cards, hotels, car rentals in a given year or multi year period.
I have benefited from 3 free USA transcon Round trip FF benefit flights despite being a casual traveler. I think of it as an extra discount for my other purchased flights, as an perk when I have to travel for work and to comp for the inconvenience the assignment has put me into.
 
Lufthansa
Posts: 2303
Joined: Thu May 20, 1999 6:04 am

RE: Eliminate Frequent Flyer Programs?

Sat Jun 25, 2005 2:59 am

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 a small businessman and they make up a hell of a large chunk of the economy...therefore...they ADD UP!!!! and also, they don't have the power to negotiate corporate discounts etc.

What i would like to draw attention to here is the fact that what this guy is really complaining about is the attitudes of ppl who fly say, 10-15 times a year, after being recognised as having "status" demanding a little extra. After all, they were 'recognised' as elite memebers where they not?

What freqent flyer programs are about is about the lifetime value of the customer. Lets say I am a wanna be and I actually only travel 2 times a year...... but I joined this program and it is basically pointless..... They still gained my business over the competition. That, believe it or not...actually does add up over the lifetime of the customer. They're never going to get upgraded because they'll never get anywhere near elite and if they do get enough miles for free tickets it would have been through credit cards and not flying. If it was done through credit cards...as has been explained, the airline actually did get paid money for the ticket.
 
Lufthansa
Posts: 2303
Joined: Thu May 20, 1999 6:04 am

RE: Eliminate Frequent Flyer Programs?

Sat Jun 25, 2005 3:00 am

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 a small businessman and they make up a hell of a large chunk of the economy...therefore...they ADD UP!!!! and also, they don't have the power to negotiate corporate discounts etc.

What i would like to draw attention to here is the fact that what this guy is really complaining about is the attitudes of ppl who fly say, 10-15 times a year, after being recognised as having "status" demanding a little extra. After all, they were 'recognised' as elite memebers where they not?

What freqent flyer programs are about is about the lifetime value of the customer. Lets say I am a wanna be and I actually only travel 2 times a year...... but I joined this program and it is basically pointless..... They still gained my business over the competition. That, believe it or not...actually does add up over the lifetime of the customer. They're never going to get upgraded because they'll never get anywhere near elite and if they do get enough miles for free tickets it would have been through credit cards and not flying. If it was done through credit cards...as has been explained, the airline actually did get paid money for the ticket.
 
1MillionFlyer
Posts: 1937
Joined: Wed Sep 08, 2004 8:55 am

RE: Eliminate Frequent Flyer Programs?

Sat Jun 25, 2005 3:04 am

Quoting LTBEWR (Reply 42):
One problem for airlines is that the unclaimed points can be an accounting liability and all airlines have unclaimed points values in the equivilent of millions of tickets. I also think they should limit and be more careful in thier ads for these plans, such as suggesting that everyone will be able to get a free FF flights, 1st class LAX or JFK or ORD to HON. They should also limit the points one can get via affinity credit cards, hotels, car rentals in a given year or multi year period.

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 in the scheme of things.

I used 12 free tickets on DL last year, AND HAVE 2 LEFT all this on only 190 segments , that's why I have put up with reduced service levels and the nightmare that is ATL. If it wasn't for loyalty programs I would have been flying someone else for those 190 segments.

2 J Class BNA-LGW-BNA
2 F Class BNA-SJC-BNA
2 F Class BNA-YYZ-BNA
1 Y Class BNA-YYZ-BNA
1 F CLass BNA-LAS-BNA
1 F CLass BNA-PHX-BNA
2 Y classs PHX-LGA-PHX
1 Y class BNA-LGA-BNA

[Edited 2005-06-24 20:05:01]
Golf Foxtrot you are cleared for departure
 
PanAmDC10
Posts: 24
Joined: Tue Apr 12, 2005 3:03 am

RE: Eliminate Frequent Flyer Programs?

Sat Jun 25, 2005 3:20 am

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 know that they were created to try to foster loyalty, but I wonder whether some of the airlines would not be in trouble if everyone paid for their ticket, and there were no free tickets or upgrades.
If they had never been created, the airlines would not need to spend the large amounts of money to administer the frequent flyer programs they have today, saving a lot of money. Whether they really do encourage people to be loyal to one airline is questionable, so many people nowadays will go wherever the ticket is cheapest.
 
goingboeing
Posts: 4727
Joined: Sat Dec 04, 1999 1:58 am

RE: Eliminate Frequent Flyer Programs?

Sat Jun 25, 2005 3:33 am

Quoting Fbgdavidson (Reply 6):
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!

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-employees - that's the non-employees employers job. Take it up with them.

Quoting Fbgdavidson (Reply 6):

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.

You most likely read it on another message board...hardly the place for "factual" information. If FF programs were the cash cows that FFer's think they are, why don't any of the airlines highlight just how much they make off the FF programs? Why are the numbers literally BURIED in the quarterly and annual reports as "other income"...Why are expenses related to them never broken out? When you don't factor in the costs associated with running the programs and only point out the fact that Hertz paid $$$ for the ability offer FF points to a customer, then it LOOKS like it's a pure profit center. It takes people to run the programs. It takes utilities and rent to maintain the airport clubs. It costs the airlines in terms of potential lost revenue (can't sell a full fare F ticket when a super-de-duper titanium deluxe passenger just upgraded to the seat from his $100 ticket).
 
fbm3rd
Posts: 154
Joined: Wed Mar 30, 2005 12:20 am

RE: Eliminate Frequent Flyer Programs?

Sat Jun 25, 2005 3:38 am

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 miles. how much of the miles that folks have are from flying v. buying crap?
 
fbgdavidson
Posts: 3563
Joined: Thu Oct 14, 2004 6:25 am

RE: Eliminate Frequent Flyer Programs?

Sat Jun 25, 2005 5:00 am

Quoting Goingboeing (Reply 47):
The airline isn't responsible for providing perks to non-employees - that's the non-employees employers job

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 facing business try to entice people back with these kind of schemes? Supermarkets, banks, hotels, airlines etc etc. Of course the airline is responsible for these perks, they are done in order to keep repeat business!

Quoting Goingboeing (Reply 47):
You most likely read it on another message board...hardly the place for "factual" information. If FF programs were the cash cows that FFer's think they are, why don't any of the airlines highlight just how much they make off the FF programs?

Need I say it was a messageboard with a lot more fact than some of the fiction dreamt up on here. The comment was also made by a well respected poster with first hand insider knowledge of FFPs.

In response to your post I ask why is it all major airlines from legacies down to LCCs have FFPs? If they are as useless as you make out then why haven't the airlines dropped them like most carriers have been with other aspects of their service?

[Edited 2005-06-24 22:02:10]
"My first job was selling doors, door to door, that's a tough job innit" - Bill Bailey