MilesBuzz! - How about changing the rules for earning miles?

I am totally astonished about how someone can earn 8000+ flight miles for a $150 fare!!! With all the bonus, the same fare also generates 20000 miles to be used in the future.

Can't the airlines do the math? Someone with status and time can play this game 5 times and earn himself/herself a FC ticket to Europe for just $750. In the process, that person gets free upgrades within N.America.

My solution for the airlines is to only award "direct" flight miles to any ticket. That way, it will discourage the mileage runners and free up higher class seats. At the same time, the airlines should try to sell biz/1st class tickets at more reasonable price. Lastly, don't award any miles for ridiculously low sale fares.

http://www.flyertalk.com/forum/eek.gif What did I just type? Looks like I am ready to take fireballs. http://www.flyertalk.com/forum/eek.gif

Fireball #1: They can give these out because in essance they are free, they just don't make the seats available at the lower award levels (use CO's for example) so you have to use 2X the award to get an any time award. Hence, the bonus' do the same thing, you get twice the miles for your trip but it takes twice as much to use them. In the end its the same thing except the consumer thinks he/she is getting a great deal, go to any CO thread when the bonus' were going wild, everyone was so happy, yet we can't use any of those miles or if we do its at very high exchange rates.

You want to discourage mileage runners and free up higher fare seats!!!!

Why do you think these fares are at $150 in the first place, they can't sell these at higher fares if they could they would. As far as upgrades, there is a reason they don't clear until X days out, the airlines know the odds of selling a full rev F or J ticket. And it isn't good chance (of selling the F/J fare) by the time your u/g clears.

Mileage runners fill seats that other wise would go empty on a plane that is going on its route regardless. The airline gets something for that fare that they otherwise could never recoup.

Finally, where can I get a $150 ticket and get 8000 base miles and 20000 total miles..

I'll book those right now if you can show me

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by FT wannabe:
I am totally astonished about how someone can earn 8000+ flight miles for a $150 fare!!! With all the bonus, the same fare also generates 20000 miles to be used in the future.

Can't the airlines do the math? Someone with status and time can play this game 5 times and earn himself/herself a FC ticket to Europe for just $750. In the process, that person gets free upgrades within N.America.

My solution for the airlines is to only award "direct" flight miles to any ticket. That way, it will discourage the mileage runners and free up higher class seats. At the same time, the airlines should try to sell biz/1st class tickets at more reasonable price. Lastly, don't award any miles for ridiculously low sale fares.

http://www.flyertalk.com/forum/eek.gif What did I just type? Looks like I am ready to take fireballs. http://www.flyertalk.com/forum/eek.gif</font>

Did you write this letter also?

http://www.flyertalk.com/forum/Forum1/HTML/007342.html

If they were not offering the bonus miles, there is a good chance that seat would have gone empty, and they wouldn't have the $750. Hilton is giving you 50,000 bonus points (actually more if you book online, etc) for what you could get as little as 2,400 points for.

Upgrades don't cost the airlines much, they certainly are not turning away people who want to pay for Business and first to give to upgrades. Same thing with free first class seats, they aren't turning away a paying customer to give up their seat.

Why not take it to the other extreme? Get rid of the consolidator, tour, etc fares? They cost way too little money. Don't sell any seats on hotwire or priceline, they certainly don't generate enough money. Loyalty, as any airline entering bankruptcy will show, is something the airlines need very badly right now.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by TrojanHorse:
You want to discourage mileage runners and free up higher fare seats!!!!

Mileage runners fill seats that other wise would go empty on a plane that is going on its route regardless. The airline gets something for that fare that they otherwise could never recoup.

Finally, where can I get a $150 ticket and get 8000 base miles and 20000 total miles..

I'll book those right now if you can show me

[/B]</font>

Well, I was able to book SFO-BNA rt + tax for less than $100 on CO/NW about a month ago, go figure. When I pull that fare out, I had my mouth wide open for 5 seconds... (BTW, I didn't bite the offer since I don't have the time...)

If the fare will be gone unsold since the biz/1st fare is so high, why don't the airlines sell them at, say, $600 fare coast-to-coast with 21 day advance purchase? I'll buy that any day if my other option is to fly coach for $400.

You said mileage runners help to fill up planes - TRUE! But without the mileage runners, the airlines should be able to fly smaller airplanes or reduce schedule...

[This message has been edited by FT wannabe (edited 08-21-2002).]

So you're refering to CNTU bonus? I think Hilton has no choices but to offer that to generate cash. But airlines should have more flexibility on their biz plan.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by cordelli:
Upgrades don't cost the airlines much, they certainly are not turning away people who want to pay for Business and first to give to upgrades. Same thing with free first class seats, they aren't turning away a paying customer to give up their seat.</font>

Think about the example I gave in the previous messages. I'll pay 1.5x fare on my leisure travel any day, but not 4x.

To answer your other point, I think airlines are in the process of trying to get rid of travel agents. It will take some time, but it is happening.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by yashan:

Did you write this letter also?

http://www.flyertalk.com/forum/Forum1/HTML/007342.html</font>

That sounds like some middle school students wrote that letter...

My rule-of-thumb( http://www.flyertalk.com/forum/thumbsup.gif ) is...
If the fare is reasonable, no reason to switch to another airline without FF program. On the other side of the token, with all the sale fare, there're no reason why I should fly an airline without FF program.

Incredibly naive.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by cactuspete:
Incredibly naive.</font>

Please elaborate.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by FT wannabe:

You said mileage runners help to fill up planes - TRUE! But without the mileage runners, the airlines should be able to fly smaller airplanes or reduce schedule...

[This message has been edited by FT wannabe (edited 08-21-2002).][/B]</font>

Mileage runners are such a small % of the flying population that if all mileage runners bailed at once, it would have such an immaterial impact on any one airline. The abscense of mileage runners are not going to allow the airline to downsize a plane. there are just not enough of them to affect the size of aircraft on a route.

Also, do you think that the abscense of a few low fare MR's on a trans con (say EWR-LAX) on a 738 are going affect what plane is on that route, what are they going to put an RJ on the route?

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by TrojanHorse:
Mileage runners are such a small % of the flying population</font>

Agree. But that small number of people only fly bogus mileage runs at ridiculous low price like the one I point out initially - getting 1st class seat to Europe at $750 plus occupying the first class seats domestically all the time.

It doesn't take an expert to figure out the math that no airlines can profit from those mileage runners. So why not eliminating them by changing the mileage accural rule slightly by awarding only "direct flight" mileages on regularly price flight. And no mileage accural for cheap flight.

On the other hand, airlines should take a closer look at the yield management software. Because whatever it is doing, it is not filling up the seats at profitable scale. Maybe some assumption they put into the software are not valid anymore...

Flame this guy all you want, but his central premise is right.

I don't agree with most of his suggestions, but to not think that the majors will -- and that Right Soon (to quote a little Shawshank) -- be more directly tying FF miles and status to revenue generated, not simply miles flown ... that, my friends, is the height of naivete.

Yes, the Q/T fares on CO, the L/U's on DL ... these fares will not earn miles of any kind, status or otherwise, in the very near future. Meanwhile, you might get 150% status miles for full Y, and 200% for full C or F. Alternatively, majors might award a base mileage plus a certain number of miles for each dollar spent.

TW was far ahead of its time in its attempt to tie revenue to miles earned. Their program will resurface in any number of incarnations within the next 36 months.

Anyone want to bet I'm wrong?

Mook

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by FT wannabe:
On the other hand, airlines should take a closer look at the yield management software. Because whatever it is doing, it is not filling up the seats at profitable scale. Maybe some assumption they put into the software are not valid anymore...</font>

Bingo.

Yield management was pioneered in days when airlines could reasonably expect a mid-to-high single-digit percentage increase, year over year, in air miles flown.

Further, the proportions of leisure vs. business travelers, the percentage increase in average fare paid, the average distance per flight ... these numbers all stayed remarkably constant through the Reagan / Bush Sr. / Clinton boom years.

Ah, but with a recession comes a different set of rules, and on 9/11, the rulebook went right out the window.

The 20 years of data airlines have powering their yield management software is ... well, maybe worthless is too strong a term, but certainly no longer dependable.

But who's going to blink first, scrap that data, and start over with a radically rehauled fare and FF structure? Or will all 6 majors go lemming-like over that cliff instead?

Mook

Yes, such an idea as tieing mileage to fares may surface in the near future, and unless it surfaces at ALL the airlines, whichever one pulls this stunt on us will simply lose all loyalty business.......

"So Long " is the tune from me: I cannot and will not give my business to an airline that makes it so difficult to earn free trips. My time on the road is too valuable to me: I suffer the indignities of today's airport when I could drive, and I set up meetings in faraway places when I could just set up the teleconference equipment or do it by phone----- all of this will be my response if I don't get what the originator here seems to want to describe as improper.

I don't see it that way. I see it as a contract (unenforceable, yes, but a moral contract nonetheless) between me and ____ airline. I keep flying. They provide me with a certain amount of thanks. I keep flying.

When they pull the plug, SO DO I.

This benefit is just too valuable for myself, my staff, and everybody's motivation. If it's not there, expect my two dozen associates to be driving to any close meetings, and zipping the wallet for anything not crucial that's a planeride away. Oh, and they can FORGET loyalty. If they ever wanted to undo that and set us up as price hawks, fueling the "race to the bottom" (which the established majors would lose, and Southwest et. al. would win), just undo the frequent flyer programs........ Be forewarned; I speak not for just myself.

Have a LOVELY day.

To elaborate on Mook's post, I'll along NYTimes' analysis that one of the unexpected problems yield management ran into was the growth of the Internet, which allowed businesses to see once and for all just how much they were getting gouged... nothing like the free flow of information to upset well made plans...

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by SST:
Yes, such an idea as tieing mileage to fares may surface in the near future, and unless it surfaces at ALL the airlines, whichever one pulls this stunt on us will simply lose all loyalty business.......

</font>

From you, perhaps. Not from me. I fly fully-refundable fares 50% to 75% of the time, typically on 25-cent-per-mile and up domestic fares, and would frankly welcome some acknowledgement of the fact that my 30,000 miles brought United more money than your 100,000 miles (for instance).

And (to quote a little Slim Shady) there's a million of us just like me. Airlines have got to see that catering to people like that are a win-win. The greatest number of benefits go to those providing the airline the greatest amount of money, and these are people who fly less often while spending more, meaning that the total benefits expended on this group will go down.

Let's see ... a system that rewards higher revenues, and lowers costs. And you don't think the majors are headed that way?

Mook

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Mook:
Flame this guy all you want, but his central premise is right.

I don't agree with most of his suggestions, but to not think that the majors will -- and that Right Soon (to quote a little Shawshank) -- be more directly tying FF miles and status to revenue generated, not simply miles flown ... that, my friends, is the height of naivete.

Yes, the Q/T fares on CO, the L/U's on DL ... these fares will not earn miles of any kind, status or otherwise, in the very near future. Meanwhile, you might get 150% status miles for full Y, and 200% for full C or F. Alternatively, majors might award a base mileage plus a certain number of miles for each dollar spent.

TW was far ahead of its time in its attempt to tie revenue to miles earned. Their program will resurface in any number of incarnations within the next 36 months.

Anyone want to bet I'm wrong?

Mook</font>

If that happens, then more business will head towards Southwest!

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Mook:
I don't agree with most of his suggestions, but to not think that the majors will -- and that Right Soon (to quote a little Shawshank) -- be more directly tying FF miles and status to revenue generated, not simply miles flown ... that, my friends, is the height of naivete.

Yes, the Q/T fares on CO, the L/U's on DL ... these fares will not earn miles of any kind, status or otherwise, in the very near future. Meanwhile, you might get 150% status miles for full Y, and 200% for full C or F. Alternatively, majors might award a base mileage plus a certain number of miles for each dollar spent.
(snip)
Anyone want to bet I'm wrong?

Mook</font>

The purpose of Frequent Flyer Miles is not to generate revenue directly, but indirectly by creating flyer loyalty at a low marginal cost to the airline. As pointed out, there is relativly little direct cost; the cost of upgrades is the cost of having a FC section. For most FF tickets, these are trips that would not have been made at all if there were not FF tickets, and the marginal cost is very small.

At present most elite level members are business travelers and spend their miles on upgrades. You only have to read the various posts here on Flyer Talk to realise the importance of upgrade availability to carrier loyalty.

For a simple calculation, assume that a Gold elite (UA) takes 10 cross country trips of 5,000 miles. He will earn 20 x 500 mile coupons and 100,000 FF miles.The coupons will upgrade 2 round trips. The miles will upgrade another 5 round trips. Add in Hilton miles, credit card miles, 1K (Platinum) upgrades and upgrade availability for UA elites is presently close to being limited by seat availability. I know nothing of the current Yield Management model, but suspect this is not a complete coincidence. Giving additional FF miles to elite travelers will not improve the elite upgrade situation. Nor will taking miles away from leisure travellers who use their miles predominently for tickets change the upgrade status for elites.

And, as others have pointed out, there are just so few Mileage Runners to affect anything. Doing whatever to them would have no effect.

My guess is that you may see more non-upgradeable fares, but I doubt that you will see miles vanish even for low fares. You may laugh at the family taking two kids to visit Gradma once a year, but that free ticket every third year is important. They may not fly often, but there are lots of them, and the airlines need their loyalty as much as they need the 100,000 milers.

If any carrier had figured out how to maintain loyalty without miles, or by changing the system, they would have done it long ago.

Just some thoughts,

Bruce

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by RobertS975:
If that happens, then more business will head towards Southwest!</font>

Why would you think SWA's price will beat major airlines' fare? I just pull up the following coast-to-coast fare...

From southwest.com
Sep 11) OAK-BUF (w/ stop @ PHX)
Sep 18) BUF-OAK (w/ stop @ BWI + 1 unspecified stop)
$348

From travelocity.com (UAL)
Sep 11) OAK-BUF (w/ stop @ IAD)
Sep 18) BUF-OAK (w/ stop @ ORD)
$345

If I want direct flight, I can fly SFO-JFK for $356.5 coast-to-coast to save time.

Heck, if I am a FF w/ status, it's a no brainer for me since I would get upgraded from time to time if biz seats are available. And for ~$300 coast-to-coast, the airline should be earning money if they fill the plane.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by brucemcal:
My guess is that you may see more non-upgradeable fares, but I doubt that you will see miles vanish even for low fares. You may laugh at the family taking two kids to visit Gradma once a year, but that free ticket every third year is important. They may not fly often, but there are lots of them, and the airlines need their loyalty as much as they need the 100,000 milers.</font>

Very good point! The airlines need pax, any pax, human or cargo. However, airlines should not be selling $150 coast-to-coast fares with miles accural. The loophole is too big for the airline to recover the cost.

Everyone is saying that the difference in cost of operating a biz and a coach seat is marginal to the airline. Maybe. But, if the airline can't generate additional revenue from these biz seats, maybe they should install more coach seats instead. The extra legroom in biz/1st class can mean more coast seats, just like SWA.

If airlines want to fill planes, they should do it with FF program OR ridiculous cheap fares, but not BOTH.

The mileage runners, although small in numbers, are occupying those premium seats at close to - 0 - cost. And they are diluting the quality of service in premium class. That is, diluting the loyalty of other pax paying higher fare for the premium service.

[This message has been edited by FT wannabe (edited 08-21-2002).]

[This message has been edited by FT wannabe (edited 08-21-2002).]

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by brucemcal:
If any carrier had figured out how to maintain loyalty without miles, or by changing the system, they would have done it long ago.
</font>

But that's just the point, isn't it?

The pure leisure traveler has little or no loyalty to a specific airline. Only when they're located near "captive" airports will they fly one airline consistently.

Yield management states that you can simultaneously price your product to make it attractive to pure leisure travelers, while also making your product the choice of price-insensitive business travelers through last-minute availability, FF miles and status, availability of upgrades and awards, etc.

But yield management is broken. Clearly, in this climate, you can't do both. Airlines will have to choose one or the other. Those that choose the former will be forced to adopt measures such as those mentioned above -- they'll crunch the numbers and find it's simply not worth it to maintain those benefits for families flying $180 trans-cons.

Those that choose the latter will, if they're brave, maintain or even upgrade those benefits, hoping to pluck the high-margin business traveler away from the increasing Southwesternizing of the others.

My only fear is that there won't be any major airlines in the latter group. As a whole, we're not talking about the most dynamic, stick-out-your-neck industry in the world, you know.

Mook

There is this widespread notion out there that FF award seats cost the airline little because they are 1) seats that would have gone empty anyway amd 2) trips that would not have been taken but fot the award seats.

This notion is wrong... I personally have never taken an award flight that wasn't quite full, and the majority of them have been oversold flights for which volunteers have been sought. FFs earn miles flying between LGA and ATL, ORD and DFW etc., but they do not redeem miles for these kinds of flights.

A couple of points to consider and remember:

1) Once a flight takes off, any revenue lost from an unsold seat is lost forever.

2) Airlines WILL NOT stop giving miles on lower fares such as DL L/U's etc. They will instead increase the mile yield on higher priced fare classes.

3) While not the most scientific of surveys, look at airline capacities. Even at the absolute PEAK of the economy the best airlines were not doing better than 89% of capacity filled or so. That means that 11% of seats were EMPTY, adding in another 6-7% of seats given towards FF programmes and it is appx 82%. There is plenty of room to give "free" seats.

4)Most of the public has very little idea of runs and the like and is very limited idea of how to reap maximum benefits. Look around you! How many people do you know that are really savvy on this stuff?? Personally many of my colleagues travel like hell and have no idea about most stuff and don't care about it.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by RobertS975:


This notion is wrong... I personally have never taken an award flight that wasn't quite full, and the majority of them have been oversold flights for which volunteers have been sought. FFs earn miles flying between LGA and ATL, ORD and DFW etc., but they do not redeem miles for these kinds of flights.</font>

The plane being full or not is a function of the yeild management software. No airline can wait until the day before the flight to open it up to award flyers. The software, which we all know doesn't do that great of a job anymore, will let them know a year out how many seats till probably go empty, and be used for awards, etc.

While I earn miles from New York to Atlanta, I will also redeem them for New York to Atlanta if it's a connection to get me someplace else, or if the price is too high. We all to often think of New York to Chicago and New York to Los Angeles, without thinking many people on the New York to Chicago may be just on the first leg of a flight to Los Angeles.

In the past 2 weeks or so, all 6 major US airlines announced schedule reduction. The prospect for award availability is only going to get worse, if not so already. There is an article somewhere that I remember saying that it'll take the airlines more than 100 years to redeem all the miles out there. With reduced schedule (even fewer award seats) and generous miles accural on cheap fares, something has to yield, right?

With the proposed beef-up Skyteam and UA-US alliance, I can see the trend of ever increasingly more miles chasing fewer seats. With codeshares, the top status tier is going to be easier to reach than ever. And that means fewer upgrades too...

Maybe not too soon in the future, the only way to redeem miles are cheap razors for 20000 miles. http://www.flyertalk.com/forum/rolleyes.gif

[This message has been edited by FT wannabe (edited 08-23-2002).]

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Mook:
But yield management is broken.</font>

Not "broken" so much as operating on wrong assumptions - the assumption that the number of pax on a flight a year ago is a reasonable approximation of the number that will fly this year that same day (adjusting for weekends and holidays).

The problem is not that airlines are giving away too many seats - it's that they're flying too many empty seats no matter what they do.

Airlines say they're going to cut flights.
Folks, they don't cut flights if the flights are anywhere near full! In that case, they'd start raising prices.

And yield management isn't going to solve the problem. The problem is, to quote Yogi Berra, "If people don't want to show up, you can't stop them." The airlines now see a need to "right-size" the planes to the number of PAX.

The occasional free ticket (what's the average, about 6% to 7% across the board?) isn't adversely affecting the bottom line - it would be, though, if people quit flying "their" airline because of the lack of a frequent flyer program and began basing their decisions solely on matters of convenience and price. The airlines would have to coax each passenger each day instead of having the "cushion" of loyalty to get folks to take their planes even if they cost a bit more, or departed at a less convenient time.

No, frequent flyer programs *make* money for airlines (even when you don't count the miles they sell to their "partners").

FT wannabe, Interesting handle!

I don't see anyone having directly addressed your question "If the fare will be gone unsold since the biz/1st fare is so high, why don't the airlines sell them at, say, $600 fare coast-to-coast with 21 day advance purchase? I'll buy that any day if my other option is to fly coach for $400."

I have not worked in an airline pricing dept/tarrifs/yield mgmt but let me take a stab at answering this.

It is important to understand the goal - you want to preserve the brand and perceived value while providing promotions/spiffs. If you directly cut the price or offer a promotional price, you immediately lower the perceived value. In the future, when the market recovers the price paying pax are willing to pay will be much lower.

If on the the other hand you offer the same product at a lower value (calculated in FF miles) but make it necessary to show loyalty or spend hours in obscure discussion board or subscribe to "insider secrets" - they all increase the halo and the perceived value.

THe airlines have tried discounting F/J broadly but they know it is a dangerous path that can permanently alter the perceived value of their premium products.

If there is a permanent change in market dynamics, the airlines can adjust the premium charged for the premium product. For example, in Asia most local premium travel is at a much lowere premium to coach travel.

Marketing and customer relationships, particularly brand values are not directly reduced to dollars and cents. Hope this answers your questions and sheds light on many FF perks.

There really aren't that many people who are doing the cheap mileage runs and cashing in for first class tickets. I've been doing it and I love it. I work with people who travel frequently (teachers), but I've never talked anyone into doing mileage runs.

I'm known as the weird guy who will fly to Europe or Asia and stay one night, then fly back.

The fact that I am flying a $50 first class ticket to Europe in summer when my colleague is flying a $1000 coach ticket doesn't impress most people as a reasonable trade off. Almost all people plan a trip and want to fly on a particular day and go there directly. The accumulation of extra miles by taking a couple of side trips and a couple of extra days traveling on a plane and sitting in airports is just not worth the extra time involved.

I am happy with my upgrades, miles, and perks. They are happy with their succinct, highly planned trips. To each his or her own idea of what is $ or time-worthy travel.

I never had airline loyalty until I started this mileage accumulation lifestyle. If miles were to go away, then so would my specific airline loyalty.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by enjoystravel:
Marketing and customer relationships, particularly brand values are not directly reduced to dollars and cents.</font>

Isn't this exactly the problem of the airlines are facing? Loyalty is about giving something back to the customers and hoping the customers will return in the future. When bankrupcy is imminent, the future is now. If airlines really are trying to avoid going under, they should try to squeeze every penny possible out of every flight and other operation NOW. When the economy recovers, they sure can raise the price again.

The fact that airlines are giving away potentially revenue away by holding biz class fare high is simply suicidal. Just 2 years ago, my company actually URGED me to fly biz class to Europe for $7000 when I SUGGESTED that I didn't mind flying $1000 coach. This year, the same company is heavily SCRUTINIZING my $400 domestic ticket. What am I trying to say? The vast majority biz class paying pax are real business travelers. And biz travelers' behavior is strongly related to how the economy performs. The fact that airlines are not recognizing our economy is in deep trouble really have me worried. I just pulled out a typical biz class ticket for $3276.50 SFO-JFK on UAL.com. I'll bet that all of the biz class tickets will be unsold and become upgrade baits for mileage runners.

As for retaining brand quality, you think having a whole bunch of mileage runners in business class paying $150 SFO-BNA really help the brand?

Why not trying to sell these tickets at a reasonable level now? Maybe someone will pay a few extra dollars for them?

Just an exercise:
United airlines says they are losing a million dollar a day, and they are flying ~2000 flight daily. That means they are losing ONLY $500 per flight. If 3 coach pax are willing to pay $200 more to secure biz seat, UAL can actually be profitable...

[This message has been edited by FT wannabe (edited 08-24-2002).]

[This message has been edited by FT wannabe (edited 08-24-2002).]

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by satori:
There really aren't that many people who are doing the cheap mileage runs and cashing in for first class tickets. I've been doing it and I love it. I work with people who travel frequently (teachers), but I've never talked anyone into doing mileage runs.

I'm known as the weird guy who will fly to Europe or Asia and stay one night, then fly back.</font>

Finally got a real mileage runner on this thread. I am not trying to blame you for airlines' trouble. The problem lies in the imcompetent airline management who fails to recognize the growing exisitence of your clan. They deserve to go under.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by satori:
The fact that I am flying a $50 first class ticket to Europe in summer when my colleague is flying a $1000 coach ticket doesn't impress most people as a reasonable trade off. Almost all people plan a trip and want to fly on a particular day and go there directly. The accumulation of extra miles by taking a couple of side trips and a couple of extra days traveling on a plane and sitting in airports is just not worth the extra time involved.

I am happy with my upgrades, miles, and perks. They are happy with their succinct, highly planned trips. To each his or her own idea of what is $ or time-worthy travel.</font>

So, are you saying my original suggestion of awarding only "direct" flight miles won't work. How about eliminating miles for sub $200 flights?

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by satori:
I never had airline loyalty until I started this mileage accumulation lifestyle. If miles were to go away, then so would my specific airline loyalty.
</font>

So much for generating loyalty from frequent flying mileage runners.

You guys are waaaaay overestimating the impact of mileage runners. Their simply aren't enough of them for it to matter. The arguement would be valid if it was even 1% of our business. It is not. 25% of our Premiers don't even know they are premier, or what it means. The majority of our 1p/1k folks make it based on real business travel. I understand the arguement, but it simply isin't an issue.

HELP WANTED

Company ??? has current opening for mileage runners. The newly created part-time position is open to anyone who is willing to travel. Verbal and spoken English skills are not required. Successful applicants will be allowed to play games, chat on the phone (be warn that the company will not reimburse the cost), and even sleep during the working hours. Paid $7 per hour with over time. Equal opportunity employer.

the fine print

1) All frequent flyer mileage and perks such as upgrade coupons earned are company property.
2) Limit for meal reimbursement: $4 breakfast, $6 lunch, $8 dinner. Employees are encouraged to enjoy their airline food on board.
3) No reimbursement for hotel stay. Employees are expected to sleep in the airport lounges.
4) Mileage runners are required to fly anytime to anywhere on coach upon request by the company. If the airlines upgrade the seat to business class, thank them.

the close door meeting between the upper management

CEO: Geez, even with the money and benefit we pay for the extra employees, we come out ahead when we redeem their miles for our first class tickets.

CFO: Right on the nose. It makes my job so much easier.

CEO: Make sure the tickets are paid by the corporate mileage earning credit card.

CFO: http://www.flyertalk.com/forum/eek.gif Wow. No wonder you are the CEO.

CEO: We can even make them to expedite some mail delivery too.

CFO: Saving money and creating job opportunity... I think you should consider running for the presdient.

CEO: http://www.flyertalk.com/forum/biggrin.gif http://www.flyertalk.com/forum/biggrin.gif http://www.flyertalk.com/forum/biggrin.gif http://www.flyertalk.com/forum/biggrin.gif http://www.flyertalk.com/forum/biggrin.gif

[This message has been edited by FT wannabe (edited 08-25-2002).]

ft wannabee

...your 'employment' scenario, I believe, has already been done. Sawadee! http://www.flyertalk.com/forum/smile.gif http://www.flyertalk.com/forum/wink.gif

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by FT wannabe:
the close door meeting between the upper management

CEO: Geez, even with the money and benefit we pay for the extra employees, we come out ahead when we redeem their miles for our first class tickets.

CFO: Right on the nose. It makes my job so much easier.</font>

This is why CEO's get thrown off their jobs. Airlines will not allow you to redeem miles from someone else's account to give you free First Class travel if they suspect there was renumeration involved. A professional mileage runner who is paid a salary and has tickets paid for by the corporation certainly qualifies.

A business-plan fit for Enron or Worldcom or a dot-com.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by beaubo:
ft wannabee

...your 'employment' scenario,... http://www.flyertalk.com/forum/smile.gif http://www.flyertalk.com/forum/wink.gif</font>

Has FT wannabe read this thread?: http://www.flyertalk.com/forum/Forum1/HTML/007112-2.html

Also, read about it in USAToday from 2 years back: http://www.usatoday.com/life/travel/leisure/2000/ltl259.htm

Hehehehe...I did get a chuckle out of it, though (mileage running as employment). I quit my job to travel using a lot of the miles I had built up (only problem was that I was 33 and may still have to get another job one of these days).

My favorite mileage run was one last year on a $188 ticket to Portland that had four different special offers tied in, plus elite bonuses, and earned 31,000 total miles. Best so far this year was $156 to Seattle and 21K, and I've got a $108 Kansas City coming up for a measly 12K. The award of choice is a RT to Asia (50-80K, best with Hawaii stopover) to take a month or two off from the frantic mileage running. It's worse than you thought! So, hate me.

As for 1:1 conversions, that's so...primitive. But many foreign carriers that were johnny-come-latelys to FF programs and don't really understand them still do it that way. They get to say they have a program, though it doesn't exactly drive traffic like having a promotion-laden one like WorldPerks does.

Back to the original topic: "How about changing the rules for earning miles?"

It is coming,

Effective January 1, 2003, Dividend Miles members will not receive miles or segment credit toward Preferred status for tickets purchased in H, K, V, Q and L nonrefundable fare classes. (http://www.usairways.com/dividendmiles/preferredlevels/silvergoldguidelines.htm)

Since US airways are planning to codeshare will UAL, do you think UAL is far from a similar announcement? That is an unofficial announcement for the end of mileage run as of March 2004 as very few will be qualified next year.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by GGpillow:
You guys are waaaaay overestimating the impact of mileage runners. Their simply aren't enough of them for it to matter. The arguement would be valid if it was even 1% of our business. It is not. 25% of our Premiers don't even know they are premier, or what it means. The majority of our 1p/1k folks make it based on real business travel. I understand the arguement, but it simply isin't an issue.
</font>

I have no idea which source you quote from. But according to more reliable info (http://www.webflyer.com/programs/notiflyer/#art_112), change in US Airways preferred mileage accural rules will result in 37% fewer elites for 2004. I am not suggesting that all 37% are mileage runners. However, these 37% seems to be mainly leisure traverlers as business travelers are more likely to buy Y fares.

BTW, after reading through more than 100 posts already from mostly fuming mileage runners about the US Airways news, I am even more convinced than last night that the airlines (assuming all majors will follow) have made the right move!!!

My argument is that it is more economical for the airlines to cut capacity than to keep feeding off these mileage run fancies.

Let's see.. mileage runners are maybe .001% of all travelers? Sounds like a great reason for a pejorative strike. At the same time, USAir is kissing off 36.999% of its frequent travelers (non-mileage runners).

I hope USAir now goes Chapter 7 for this action. The rest of the traveling public is better off without them, even though it means decreased competition.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by FT wannabe:
My argument is that it is more economical for the airlines to cut capacity than to keep feeding off these mileage run fancies.</font>

FT wannabe, I think you are wrong that most business travellers by Y tickets. I have been top tier on United and US Air the last 3 years on business (mostly) and a few personnal trips. Very few have been Y tickets, I plan ahead on my business trips and get low fares in most cases. I suspect I am not alone. I think impact of this will be to reward the carriers with the most non-stops serving the most people and to generally dissapate loyalty to any one carrier by any customer. I skip on non-stops to stay with my favorite carrier, now it will be all shcedule based. In addition, I think a lot of people will simply travel less. Its tough enough to travel as CP or 1K, without would really be draining. None of those things seem good for the majors

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by FT wannabe:
However, these 37% seems to be mainly leisure traverlers as business travelers are more likely to buy Y fares.
</font>

This might be true for execs of Enron or Worldcom.... http://www.flyertalk.com/forum/smile.gif but I think I have flown on a Y fare once for biz. Its either H,K,V fares on short hops or F/B trans-*. If im paying for F/B I don't need status to upgrade, I already am. If I'm flying on the cheap.... US isn't gona be it. And if I'm flying up front... it will be on AA, laptop power in a FC seat.. what a novel concept...

[This message has been edited by jcrb (edited 08-27-2002).]

Maybe US Air finally figures out the math they can cut 37% customer (which translate to a much lower percentage of revenue) and 37% capacity and still come out ahead...

For biz travelers on cheap fares, now the perks are gone. I guess they will compete on the schedule and route system instead. If all majors follow suit, the effect will be just even out...

After all, business travelers will still travel. Leisure travelers will still go places. The only ones who got screwed are just mileage runners...

I dont think it is that simple. Yes, if they all do it there will be an evening out. I think this might be good for American or others but bad for US Air. US Air doesnt serve as many markets with direct flights it seems to me. Also, I think a real impact will be to fly less and to consolidate. I fly two airlines, if all airlines do this I will consolidate to one, and it wont be US Air because I cant fly non-stop to the west coast and only limited to Asia and Europe. I do enough M and Y to be elite on 1 carrier and that will be United or American so I can fly to Asia and Europe in business. Also, flying is becoming a generally horrible experience, and videoconferencing is improving a lot. Business people will more and more decide to not take that trip. That is a lot bigger problem than mileage runners and this doesnt address it, it makes it worse. Simple, reasonable fares and decent service are what they need. I would pay 400 for a ticket instead of 200 for good service, but I cant pay 2000, and fewer and fewer people or companies will

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by FT wannabe:
After all, business travelers will still travel. Leisure travelers will still go places. The only ones who got screwed are just mileage runners...</font>

This biz traveler now flies AirTran more often then any other airline. I get a cheap business class seat (no fighting for upgrades), an incredible award promo (buy 3 RTs - get 2 free with your Amex), free drinks and a growing number of cities that they fly to.

Gee, you don't happen to work for an airline, do you?

All this is going to do is push people toward the discount carriers at a time when no carrier can afford to lose business.

I honestly don't know what your beef is with mileage runners or those who somehow earn their status on the cheap but it seems extremely petty and directed towards only a tiny percentage of the population. I sincerely hope that USAir and any other airline that adopts this policy ends up filing for Chapter 7. After all, the whole world with be WN as far as most of us are concerned.
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by FT wannabe:
Maybe US Air finally figures out the math they can cut 37% customer (which translate to a much lower percentage of revenue) and 37% capacity and still come out ahead...

For biz travelers on cheap fares, now the perks are gone. I guess they will compete on the schedule and route system instead. If all majors follow suit, the effect will be just even out...

After all, business travelers will still travel. Leisure travelers will still go places. The only ones who got screwed are just mileage runners...</font>

To be honest, I don't work for any airlines. I am either a lowly or no elite on all airlines. All I want is that I can travel at a price that I can afford with some reasonable rights such as requesting a window seat and seat assignment when I travel with my kids.

I said it too many times that mileage runners will be running the full service airlines to the ground if such changes are not imposed - and nobody cares. Major airlines rely on the business travelers who pay premium fares for their flights. If the FF programs becomes dilutive because of the the runners, there'll be just fewer and fewer incentives for biz travelers to pay premium. 'Nuff said?

As for deflections to other airlines, it doesn't seem the major airlines care. It all comes to a full circle at the end. SWA can become the #1 airline in the world; but I still don't see myself flying SWA.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Tino:
This biz traveler now flies AirTran more often then any other airline. I get a cheap business class seat (no fighting for upgrades), an incredible award promo (buy 3 RTs - get 2 free with your Amex), free drinks and a growing number of cities that they fly to.</font>

Maybe with the new changes, majors can operate more competitively against both the foes on AirTran for business pax and Southwest for the cheapies, who knows?

Air Canada has been doing something like it for many years: Non-ref. coach earns only half of actual mileage or so, while full Y earns full mileage.
I believe that connecting flyers get mileage flown because the airlines want to compensate for &or encourage PXX to tolerate inconvenient connections. Why fly nonstop PIT-ORD when you can earn double miles xCVG or xDTW? http://www.flyertalk.com/forum/wink.gif Remember NW's 500-mile connect bonus?

------------------
Play the travel game 3 vacations into the future! :)

I don't want to say "I told you so," but ....

As I mentioned near the top of this thread, I think the enlightenment on the part of the airlines that certain fares should count more than others towards FF status is long overdue.

Unfortunately, the way in which U has chosen to act out the policy is sheer idiocy. I mean -- and I'm normally not one for ad hominem attacks -- it takes a special kind of stupid to come up with this plan.

What if their announcement were instead to have read as follows?

"As of January 1, 2003, qualification for Silver, Gold, or Chairman's Preferred will be earned based on qualifying points, rather than miles.

One point per dollar spent, plus one point per mile flown, will be earned for paid trips in First and Business class.

One point per dollar spent, plus one-half point per mile flown, will be earned for paid trips in refundable Coach.

One point per dollar spent will be earned for trips in non-refundable Coach.

In one fell swoop, you've effectively ended the practice of qualifying for status via cheap, non-refundable tickets, just as with today's announcement. The math would be simple: You could drop the requirements from 25/50/100K down to 15/30/60K and still ensure that practically every elite had spent at least $15,000 per year with your airline.

Is there something I'm missing with this approach?

Mook

How in the world are you doing your math? You seem to think that 99% of all elites are mileage runners, screwing it up for everyone else. Not true!!! Mileage runners (and most are not pure 'runners'; they also travel for other reasons and pay for it) make up an extremely small percentage of elite travelers. They ARE NOT diluting other elites' benefits, unless you count the occupation of something like one seat out of maybe 10000 per day as 'dilution'.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by FT wannabe:
I said it too many times that mileage runners will be running the full service airlines to the ground if such changes are not imposed - and nobody cares. Major airlines rely on the business travelers who pay premium fares for their flights. If the FF programs becomes dilutive because of the the runners, there'll be just fewer and fewer incentives for biz travelers to pay premium. 'Nuff said?
</font>

FT wannabee, you live in a warped and demented world. Here on FT there is a very very small percentage of mileage runners. Even if EVERY person on FT WAS a mileage runner it would still be a fraction of a percentage of fliers. Get it??

Actually, FT Wannabe sounds like a poor parodie of an Ayn Rand novel. A real Free Marketeer here. Perhaps, given the few posts, he is just a trial balloon from USAir or another airline, to see what the reaction is here. That, I suppose, is at least probable (sorry if I have mistaken you, FT; we're just looking to explain why someone would be on this board dissing the rest of us for our "hobby travel".)

Now the real announcement: if this news from USAir sticks, say bye to my business old friend. I once had 200,000 miles on USAir, earned from PSA and Republic I think, with a another good dash on USAir itself, and am down to about 30K today. Mrs SSt has about 30K too. (I've earned and cashed in probably 400,000 over the last 10 years on them)

We both dumped our BofA USAir credit cards immediately, and we're looking for our next and last free flight to Martha's Vineyard.

It's been fun, old friend, but why on earth should I waste either my company's or my own money to get your "miles" is beyond me. Ah well, my guess is you won't be grieving for me, or for any of us for that matter, because you'll never be a legitimate moneymaking business again. Give my regards to PanAm & Eastern!

You wouldn't be another one of those people who thinks that upgrades are breaking the poor misunderstood airlines backs would you?

Your analysis is laughable -- the number of people making "mileage runs" is trivial. And even if it weren't all that they're doing is buying those very same affordable fares that you're so interested in.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by FT wannabe:
To be honest, I don't work for any airlines. I am either a lowly or no elite on all airlines. All I want is that I can travel at a price that I can afford with some reasonable rights such as requesting a window seat and seat assignment when I travel with my kids.

I said it too many times that mileage runners will be running the full service airlines to the ground if such changes are not imposed - and nobody cares. Major airlines rely on the business travelers who pay premium fares for their flights. If the FF programs becomes dilutive because of the the runners, there'll be just fewer and fewer incentives for biz travelers to pay premium. 'Nuff said?

As for deflections to other airlines, it doesn't seem the major airlines care. It all comes to a full circle at the end. SWA can become the #1 airline in the world; but I still don't see myself flying SWA.</font>

Here are a few figures....

Number of FTers : ~25,000
Number of Mileage runners : 0

Tell me the name of one FTer on this board who has not travelled for business, nor for leisure and has flown 100% for miles three years running.

We may book extra segments or snag cheap fares but we still get counted in one of the two categories more than 50% of the time.

FT Wannabe, get your facts straight.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Bourne:
FT Wannabe, get your facts straight. </font>

The only fact that I know is...

All big 6 airlines are losing money with the current business model (should I say OLD).

Maybe that is because of all the cheap fares... Maybe USAir is doing the right things...

I also know that today is the day that all cheapie flyers and those works so hard toward the upgrades can get infuriated by the "necessary" changes. Just think, without these changes, there'll be fewer airlines to choose from in the not too distant future - and that directly translate to high ticket price.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by FT wannabe:
The only fact that I know is...

All big 6 airlines are losing money with the current business model (should I say OLD).

Maybe that is because of all the cheap fares... Maybe USAir is doing the right things...

I also know that today is the day that all cheapie flyers and those works so hard toward the upgrades can get infuriated by the "necessary" changes. Just think, without these changes, there'll be fewer airlines to choose from in the not too distant future - and that directly translate to high ticket price.</font>

The problem isn't "cheap" fares. There are several fine examples of airlines that are profitable with a fare structure that is lower than that of any of the majors.

"Mileage runners" (whoever they are) aren't flying for less money than anyone else -- nobody is offering a special discount for mileage runs.

US Airways isn't increasing fares with this move -- they're just punishing people who fly a lot when they happen to fly on lower fares. People who hardly ever fly (apparently you would be such a person) aren't impacted -- they don't earn elite status anyway. People who fly a mix of business and leisure (and what VFF doesn't?) are being told that their leisure travel no longer counts.

People who fly exclusively on the cheapest fares and who do so enough to qualify for elite status are also being told to get lost -- imagine that $15,000/year and your money is no good?

This helps the airline how?

Am I supposed to tell my clients that well, actually, I'm going to have to charge you $2,000 for what cost you $200 last week? Not too likely.

Are companies suddenly going to say to their business travelers "we understand, sure go ahead and book that $2,000 ticket -- those $200 tickets were too good to be true!" Not on your life -- it's about as likely as corporate IT saying "yes, macs are better. windows was a big mistake we'll switch tomorrow."

Yes, the model is broken. But these are the wrong changes -- the customer is not the enemy. If they want more money from the business customer then they ought to be talking to the business customer about what that customer needs and values instead of having this lame jack*** mouthpiece spout off about how this is the right thing to have done or making imbecilic comments in their press release and FAQ implying that customers somehow requested this by virtue of purchasing lower fares.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Mook:
What if their announcement were instead to have read as follows?

[i]"As of January 1, 2003, qualification for Silver, Gold, or Chairman's Preferred will be earned based on qualifying points, rather than miles.

One point per dollar spent, plus one point per mile flown, will be earned for paid trips in First and Business class.
...</font>

I think you're right -- if they had taken an approach along those lines it probably would have had all of the positive effects described without the downside of po'ing so many people.

But what you might be missing is that those positive benefits may not be what they're trying to achieve -- the fact that this announcement has not been coupled with any revision to the fare structure suggests that its sole intent is to try to force certain people to buy the existing sky high business fares. Someone believes that there is a market for that and that a stick like this will drive customers to higher fares.

What they are missing is that business fares are passed on to customers -- and customers are keenly aware of these costs. Nobody has been flying on cheap fares and pocketing the difference -- customers aren't going to say "ok, go ahead charge me more" they're going to say "oh, that's a shame. southwest is cheaper anyway why haven't you been flying them?"

The choice isn't between flying cheap fares on US and business fares on US. The choice is between flying US and flying someone else -- the cheap fares have allowed a lot of people to continue flying US Airways. Take them away (or take away the reason to buy them) and you lose the business.

Maybe the bet is that that's ok -- if we lose 3 out of 4 it's still a net gain so long as we drive the 4th one back to a "full" fare. I doubt that will work but maybe it's what they're trying...

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by FT wannabe:
All big 6 airlines are losing money with the current business model (should I say OLD).

Maybe that is because of all the cheap fares... Maybe USAir is doing the right things...</font>

Apparently someone is an MBA wannabe as well. This one's pretty easy. First, one of the Big 6 airlines is profitable. That's Southwest. The remaining 5 losers (AA, UA, NW, CO, DAL) are the ones with the bloated cost structures, inefficient operations and maddening pricing complexity.

Why is it that JetBlue, SWA and AirTran are profitable?

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by TomBascom:
People who fly exclusively on the cheapest fares and who do so enough to qualify for elite status are also being told to get lost -- imagine that $15,000/year and your money is no good?

This helps the airline how?</font>

If $15000 were to spend on 75 $200 C-C RT, then USAir might have said "Screw them, we can't profit from these people anyway." Since with the 75 RT, you will earn 750000 (2x bonus, 2x 2500 distance) miles along with your flights. 750000 means a lot of free seats promised in the future, and potentially lost revenue.

One thing that most people on FlyerTalk overlooked is what is coming next? I have to say reduced capacity. Who knows how small USAir need to be in order to survive. When the supply meet demand, that'll be the time tix price will rise.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Tino:
First, one of the Big 6 airlines is profitable. That's Southwest. The remaining 5 losers (AA, UA, NW, CO, DAL) are the ones with the bloated cost structures, inefficient operations and maddening pricing complexity.

Why is it that JetBlue, SWA and AirTran are profitable?</font>

There're many ways people rank airlines. My way of doing so is by the seat-mile. I believe the last time I saw the stat, USAir is still the #6 while SWA is only #7. When you rank the passenger count, SWA is #3 I believe.

Anyway, the main reason why SWA and JetBlue are profitable is due to the lower cost structure. Many factors contribute to the cost - and surprise enough FFP is actually one of them. Nobody can award double miles (and above) for sub $200 C-C RT. Not even SWA.

JetBlue doesn't even have a FFP until a couple months ago. And IMO, even after the cut, FFP on the majors are still better than the Rapid Rewards and True Blue. ATA's FFP, which directly ties to the revenue, also caters to the higher paying pax.

For all I care, USAir can now reduce its capacity to 0, and preferably via Chapter 7 so that such an unfortunate experiment can never rise from the dead again. They are worthless to me and I will never fly them. If USAir wants only full fare passengers, they can turn those lovely Dash-8s into corporate aircraft.

Whether they offer 2000 flights a day or 1 flight a day, my butt will never be in one of their seats, regardless of the fare I'm on while they have this rule.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by FT wannabe:
One thing that most people on FlyerTalk overlooked is what is coming next? I have to say reduced capacity. Who knows how small USAir need to be in order to survive. When the supply meet demand, that'll be the time tix price will rise.</font>

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by FT wannabe:
One thing that most people on FlyerTalk overlooked is what is coming next? I have to say reduced capacity. Who knows how small USAir need to be in order to survive. When the supply meet demand, that'll be the time tix price will rise.</font>

Thats the dumbest things I've heard all day....

Thinking that US can raise prices when it's future supply decreases to less than the current demand, assumes (incorrectly) that they have the only supply, and there is price inflexability of demand, neither is true. They will reduce capacity and increase price and lower demand because we will be flying other airlines.

Bye

Um, Mr. Math Genius,

Southwest awards flight credits not miles. It is possible to earn a free trip every 3-4 round trips (help me out here folks, I don't fly WN) regardless of fare paid on those 3-4 trips. One can then use that free trip for a flight that is potentially more expensive than the sum of the three-four cheap trips.

I don't know why you feel the need to beat this thing to death, but you're going to get zero support from the folks here on your unfounded and short-sighted (and caluclated) assumptions. Why not just get over it and get on with your life?

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by FT wannabe:
Anyway, the main reason why SWA and JetBlue are profitable is due to the lower cost structure. Many factors contribute to the cost - and surprise enough FFP is actually one of them. Nobody can award double miles (and above) for sub $200 C-C RT. Not even SWA..</font>

I just got onto this site recently, and enjoy it. Don't even respond to someone like FT Wannabe - he is just trying to incite you, and seems to be successful.

Don't fly him, and he'll go out of business.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by NW.BTR.Than.The.Rest:
Don't even respond to someone like FT Wannabe - he is just trying to incite you, and seems to be successful.
.</font>

At this point I am convinced that FT Wana works for either US or UA and is trying to make a good show of this to avoid FT generating bad press for them, as such he must be countered fully. Look at his first post in this thread, he comes from nowhere and fully predicts a week in advance exactly what kind of changes would occur. It was an attempt to "get us ready" for the anouncement. Well guess what, it didn't work.... nor will it.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by FT wannabe:
If $15000 were to spend on 75 $200 C-C RT, then USAir might have said "Screw them, we can't profit from these people anyway."
</font>

But US can profit from a $200 fare. So do your heros at SW and so forth.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Since with the 75 RT, you will earn 750,000 (2x bonus, 2x 2500 distance) miles along with your flights.</font>

Where does 2,500 miles come from? Most of US' traffic is short haul east coast stuff...

But at any rate 75 trips probably only bag me 150,000 miles -- not 750,000. Maybe 250,000 if the bonus environment is "rich".


<font face="Verdana, Arial, Helvetica, sans-serif" size="2">750000 means a lot of free seats promised in the future, and potentially lost revenue.</font>

Perhaps you've missed it -- US' load factor is around 75% -- paying customers are not being displaced by "free trips." No revenue is "lost" when someone redeems an award.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">One thing that most people on FlyerTalk overlooked is what is coming next? I have to say reduced capacity. Who knows how small USAir need to be in order to survive. When the supply meet demand, that'll be the time tix price will rise.</font>

There you go again advocating a rise in ticket prices -- I thought your interest was in attractive fares?

Ticket prices are on a one way road -- and it isn't higher. The sooner the majors come to terms with that and rationalize their fare structures and start focusing on the value that customers expect in exchange for their money the sooner they'll become profitable. They'll discover that business travelers are not the same as leisure travelers (even when they're traveling on leisure) and that policies designed to treat business travelers like leisure travelers won't work.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by TomBascom:
Ticket prices are on a one way road -- and it isn't higher. The sooner the majors come to terms with that and rationalize their fare structures and start focusing on the value that customers expect in exchange for their money the sooner they'll become profitable. </font>

Right, and wrong.

Ticket prices are going higher. For leisure travelers used to $200 trans-cons, that is. There won't be enough capacity left in 12 months' time to support those sorts of fares.

But at the same time, there's no way airlines can justify, or people will support, paying $2,000 for that trip in coach. The majors might like to think so, but with hateful policies towards their elites such as US is trying to introduce, is anyone going to be able to justify flying them vs. WN or J6?

What I think we'll see instead will be a compression of fare buckets, potentially into 3 or 4 instead of the 15+ we see now. Grandma and Grandpa will be paying $400 instead of $200 to fly SFO-MIA, while the last-minute traveler will pay $800 or $1,000 instead of $2,000 to fly the same route.

At least, that's what airlines will have to do if they hope to stay in business. Or they can follow US's route, and fly non-stop to Hell, with a short layover in Chap. 7.

Mook

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Mook:
Right, and wrong.

Ticket prices are going higher. For leisure travelers used to $200 trans-cons, that is. There won't be enough capacity left in 12 months' time to support those sorts of fares.
</font>

We'll see. I wouldn't bet on that though -- SW just cut their top fare. I agree with most of the rest of what you said except I think you're too high... The spread won't be that wide when it's all over.