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canadianpylon
Topic Author
Posts: 337
Joined: Thu May 01, 2003 10:18 pm

FF: Points For $$ Or Miles Flown?

Thu Mar 31, 2011 3:26 am

I'm interested to see what everyone thinks about the Point FF reward system vs a Mileage based reward system.

Both JetBlue and Southwest have a points based system that provide points based on money spent (higher $$ tickets rewards more points), where it seems that most legacy carriers provide points/miles based on fare class and mileage travelled.

On one hand, the points system means you get the same number of points regardless if the flight is direct or 1, 2+ stops.

On the other hand, a mileage flown based system can encourage longer routings, if everything else is considered (price, schedule, etc...)

Personally, I think the points systems makes more sense, because it better reflects an actual perk value based on what was purchased. However, I think the idea that for the same price, I can get routings that are longer to get more points/miles. Case in point, I fly to YWG-MCO next week, and I intentionally booked the routing to go through DEN as opposed to ORD to gain an extra 600+ United miles.

Thoughts?
Always looking for the longest route with the most transfers.
 
VonRichtofen
Posts: 4270
Joined: Sun Nov 05, 2000 3:10 am

RE: FF: Points For $$ Or Miles Flown?

Thu Mar 31, 2011 3:59 am

Mileage based points is by far better for the traveler. You don't pay anywhere close to $1/mile with your airfare so the dollar based point FF programs are a rip-off.

Economy class ticket I flew in Nov was YYC-IAH-EWR, then EWR-PHX-YYC netted me 6500 points (miles) for an air fare of about $480.

[Edited 2011-03-30 21:01:47]

[Edited 2011-03-30 21:02:53]
 
BD338
Posts: 576
Joined: Sun Jul 04, 2010 3:00 am

RE: FF: Points For $$ Or Miles Flown?

Thu Mar 31, 2011 4:25 am

I have a feeling that within the next 5 years or so, the US majors/legacies will have all moved to a points per $ system. If WN (the largest US domestic can make it work) then the others will follow. At the moment FF loyalty based on miles does not necessarily reflect the value of a customer to an airline. For example, who is more valuable to an airline the occasional traveler who flies LAX-SYD and LAX-LHR once a year on lowest fares (say $3500 total revenue) or the traveler who flies 12 times a year LAX-PHX on a higher fare rate but not full fare (say $4000 total)? One qualifies for silver status (the SYD guy) and the other doesn't based on miles/segments?

A revenue based points system is how I see the industry going in future years. The writing is on the wall with extra fees for bags, meals, "premium" seats etc. won't be long before FF programs become the next casualty in the new reality.
 
signol
Posts: 2652
Joined: Tue Oct 30, 2007 5:18 pm

RE: FF: Points For $$ Or Miles Flown?

Thu Mar 31, 2011 11:42 am

The airline Kulula in South Africa's FF program offers simply a % of the cash you spent on flights, as a rebate towards your next flight. Or you can save up the "cash" to get a free flight once you have enough.

https://www.kulula-air.com/info/jetsettersinfo.aspx

signol
Flights booked: NWI-AMS-JNB-DUR, JNB-AMS-NWI
 
RamblinMan
Posts: 785
Joined: Sat Oct 09, 2010 3:57 pm

RE: FF: Points For $$ Or Miles Flown?

Thu Mar 31, 2011 5:16 pm

Quoting VonRichtofen (Reply 1):
Mileage based points is by far better for the traveler. You don't pay anywhere close to $1/mile with your airfare so the dollar based point FF programs are a rip-off.

Do you ACTUALLY think that it would be either 1point/dollar or still require 25k points for a domestic award? Please look up WN's new program and educate yourself. It is by no means a "rip-off." In fact, it is MORE generous than before for everybody but folks who only fly them shorthaul on deep-discount tickets.

Quoting BD338 (Reply 2):
If WN (the largest US domestic can make it work) then the others will follow.

They can do this precisely because they are domestic. Carriers with both a domestic and international network face a far more complicated problem... the first to switch over would gain domestic travelers but drive away international. Worth it?

Quoting BD338 (Reply 2):
traveler who flies 12 times a year LAX-PHX

BTW, with one more one-way segment, this guy WOULD be a low-level elite on almost any carrier.

Quoting canadianpylon (Thread starter):
the points systems makes more sense, because it better reflects an actual perk value based on what was purchased.

It's hardly better than the way they do it now. Neither the mileage flown nor the price paid actually reflects yield 100% of the time.
 
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canadianpylon
Topic Author
Posts: 337
Joined: Thu May 01, 2003 10:18 pm

RE: FF: Points For $$ Or Miles Flown?

Thu Mar 31, 2011 6:58 pm

Quoting RamblinMan (Reply 4):
It's hardly better than the way they do it now. Neither the mileage flown nor the price paid actually reflects yield 100% of the time.

But is it more reflective of the value of the perk? Theoretically, two people can buy tickets for the same price, one non-stop and one with 2+ stops. With the mileage flown scenario, the person with 2+ stops will get more mileage rewarded. Worse off, airlines tend to charge more for non-stop flights, so the person paying more may actually get less reward miles.
Always looking for the longest route with the most transfers.
 
RamblinMan
Posts: 785
Joined: Sat Oct 09, 2010 3:57 pm

RE: FF: Points For $$ Or Miles Flown?

Fri Apr 01, 2011 10:07 pm

Quoting canadianpylon (Reply 5):
Theoretically, two people can buy tickets for the same price, one non-stop and one with 2 stops. With the mileage flown scenario, the person with 2 stops will get more mileage rewarded.

Just to play devil's advocate, this may be intentional. If someone is willing to take a 2-stop just for the miles, let them do it, then (hopefully) get a higher fare for that seat on the nonstop. The real problem for the airline lies on the redemption end of a revenue-based program in that it could easily lead to an inefficient distribution of award tickets.

At any rate, never said it was perfect, or even better, just that switching to a revenue-based system is not necessarily going to be beneficial to the airline or the passenger. I'm sure everybody will be watching Southwest VERY closely.
 
Flytravel
Posts: 663
Joined: Tue Dec 22, 2009 4:37 pm

RE: FF: Points For $$ Or Miles Flown?

Sat Apr 02, 2011 12:20 am

I think the points system is interesting, but the miles based awards system is more familiar. In this case, I'm not sure if WN's program will be embraced or just be puzzling for attracting pax who are familiar and coming from a legacy program, and RR won't be the attraction but just the rest of what WN offers (no first or second bag fees, change fees, fare, nonstop availabilities) that will be the attraction of taking WN.

Anyways, taking a 1-stop or 2-stop is to the benefit for the airline that the pax is supporting more than one leg and thus understandable why more miles are offered, even if fare is lower.

Also, the pax that supports a long haul route (e.g. international) even at a low bucket fare) supports a route that the airline wants to fly that is less subject to LCC competition. The airline anyways limits the number of low bucket fares on the long haul routes.

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