nsx

Southwest's customers made a lot of noise when the new fare-based Rapid Rewards was introduced almost two years ago. The new program turned both earning and redemption tactics upside down. Now that we are accustomed to the new tactics some of us like the new program.

Yet there's no getting around the fact that a program overhaul like this is a huge devaluation to customers who have become expert at gaming the old program. Southwest's change devalued my earnings by a factor of 3. But life goes on, and we need to remember the years of abundance. Considering the number of years that I earned 70% to 100% effective rebates on my Southwest ticket purchases, I consider myself still to be ahead in this game.

One other point. Frequent flier programs operate on the principle that the customer perceives a value which is higher than the airline's cost to provide that value. Part of this mismatch derives from continual devaluations, so that the customer's perception of redemption value always lags reality. The airlines need to keep devaluation moving so as to keep customers fooled. In fact, the airlines need to keep accelerating the devaluation to keep customers fooled. (This is the same situation faced by governments which choose to fund a significant portion of their operations by printing money: Only by accelerating the inflation can the government stay ahead of public expectations.)

At some point the accelerating devaluation exceeds reasonable limits and customer confidence in the value of miles completely evaporates. A new program can restart the process slowly after the old liabilities are voided, e.g. in Chapter 11 bankruptcy. Until then, expect devaluation to continue and to accelerate. Economics practically demands it.

mnredfox

I hope not, speculation all looks ugly.

Crazyhotelguy

+1.

LuvAv8n

Even if 50% were to happen, it would still be ugly.

However, any relief from the YBM international upgrades would potentially be welcome.

Dovster

Not for me -- at least not if it meant that a K fare could be upgraded with SkyMiles but DL wants almost as many SkyMiles as it does for an award ticket.

As things stand right now, an M fare runs me about $1000 more than a K fare would, 50,000 SkyMiles gets me upgraded across the Atlantic in both directions and on most (if not all) of my domestic segments, the M fare is much more flexible than the K, and I earn 1.5 SkyMiles and MQMs for my M fare -- and with Gold or Platinum status, that means that I get almost as many SkyMiles as the upgrade costs me, and I can make Gold with two itineraries per year or Platinum with 3 -- and that gets me four SWUs.

I also have very little difficulty right now in getting upgrades, but if they are allowed on K fares, the competition for them will increase sharply.

xliioper

I don't see anything new here. Pretty much the same old speculation with no real new inside information. He seems to somewhat base it on the recent website redesign. Huh?

HongKonger

I can throw darts at a board too!

If I were DL I'd make sure any changes for the next year were completely different, just to screw with the heads of the speculators.

dean1121

blah blah blah, same old same old.

I'll believe it when I see it.

Deadtail

I don;t know why LedgeT won't weigh in again. It's weird.

Deadtail

Glad I could be your source of grounded wisdom.

Vuelos

Maybe the mob with pitchforks and fire scared him away? Consider the post by another member here recently calling out the rumor and LedgeT specifically. Was quote, well, not nice.

http://www.flyertalk.com/forum/delta...otal-croc.html

Deadtail

LedgeT still posts here, but for some reason stopped standing behind the rumor guarantees. LedgeT wasn't the only one either.

Vuelos

Re-read my post above yours.

LAX88

I agree. Things are fine with me as they are. It also makes business sense. DL makes it hard to redeem miles for premium fares, but requires less miles and makes it relatively easier to upgrade provided you buy a more expensive YBM fare. I'm happy with that.


They're clueless. My guess: AMEX isn't giving good referral bonuses for SkyMiles cards.

GRALISTAIR

OMG - I thought this thread had gone to meet its maker.