terpfan101

Not sure which board this belongs to, so figured a general miles and points forum would make sense!

I've heard all about the revenue based program and whether or not they would spring up, especially at Delta where rumors were pretty strong. Anyway I was reading some other article today when I saw a link to the following article: http://www.bizjournals.com/bizjourna...iggy-bank.html

In it the author argues that one shouldn't accumulate without spending miles which is something I definitely agree with. He then goes on to say the following:

So is this old news (I know its from October 2012)? I never saw this talked about as definite to occur. If so, thoughts on which airline's plans he was shown? Seems pretty clear that it'd be Delta.

nall

There are (were?) some very large threads discussing this on the Delta board.

icarusKiD

Yes there were many threads about it. Delta calls it medallion qualifying dollars (or something like that) Google it. It's more of a hybrid than SW. The dollars you spend are thresholds to meet while still accruing miles. Your avg spend per mile must be $.10 per mile to meet their qualifying tiers.

Carolinian

They are frequent buyer programs rather than frequent flyer. They may be great if all your travel is for biz in higher buckets, but this concept sucks for mixed fares travellers - part biz and part leisure. If one carrier keeps the current system, they are likely to get a lock on most mixed fare travellers and that is a huge market share.

nall

I don't want to start a whole other discussion here, but it's possible that may just be "Phase I."

DallasEsq

I don't think it works for me personally, because I'm anything but a high rev pax. However, it does seem fair and consistent with rewarding the customers who keep you in business. What I'd be interested in seeing is how it would impact two major carriers in a competitive market if only one were to do this.

CFFrost

I don't have stats on this or anything, but I think that sale of points to banks (and other entities) is a big part of the business model for many of the major airlines.

luv2ctheworld

Wirelessly posted (BB Curve: Opera/9.80 (Android; Opera Mini/7.5.32193/29.3075; U; en) Presto/2.8.119 Version/11.10)

The worst will be the Fare Based Award Ticket Redemption (FBATR) that DL has been kicking around. It will make redemptions similar to WN's points system. It will effectively make business class award tickets non existent or beyond the reasonable value equation.

DallasEsq

Good point. Maybe we will be seeing some type of hybrid for accrual but revenue for status.

pinniped

Can't the airlines effectively do this within their existing structures using Elite Qualifying Points? AA has long had this concept...although not really leveraged as much as they could. Instead of 0.5, 1.0, and 1.5 they could get more granular and ramp it up higher for the higher fare buckets. Not that I *want* them to do this...just saying they could do it without a system overhaul and without a lot of fanfare that would get them clobbered in the mainstream media.

Well, that could cover the earning side. FBATR is another animal...it would effectively render everything a simple rebate program.

Long ago, I thought the system of mileage was intended to keep the airfares at arm's length from the rewards. When this was all hatched in 1980, with the sole target of FFPs being business travelers and the sole way of earning miles being to buy plane tickets, I imagine that a straight rebate would have looked and smelled a bit too much like a kickback.

Now that all of these companies are essentially credit card marketing firms that operate aircraft as a side business, I guess it's less of a big deal.

austin_modern

'cept for many many many people qualify for status on AA using EQM.

terpfan101

That is what I was thinking, most airlines already reward less miles for discount economy tickets and extra for premium cabin travel. I think thats a pretty good compromise.

I do hope that the new Delta elite requirements are the end of their changes but based on the author's article, it sounds like one or two airlines are definitely going to do this switch.

As far as a revenue based program for both earning and burning, I love it for an airline like Southwest or Jetblue. However for Southwest especially, it works very well as they don't have a true premium cabin and don't fly internationally (until fully adding Caribbean routes from AirTran). Previously their system made it that you would only ever redeem credits for a long expensive flight but the problem with that is they were capacity controlled. Now you can effectively use it for any flight since earning is all the same. However to call it a frequent buyer club or a rebate program is more accurate. I think it probably makes one less loyal when you're getting back a % as a rebate than the current programs we have today.

Another thing I would wonder about is if say Delta does this, how does that impact their relationships with other alliance partners.

pinniped

True, but my point is that they could find a way to reward revenue within their existing systems and structure. Say, a new tier that is *only* reachable with EQP. Some current ExPlats would love it; some would hate it. By doing this and spinning it as a "new feature", they can start to go down this path without winding up on the front page of the Wall Street Journal as they do it.

All I'm saying is that there are ways for them to get where they want to go without blowing up the entire legacy FFP structure. I have to think there's *some* value in keeping the mileage-based aspirational awards in the system. After all, they still have their capacity controls in place. The J/F seats they actually have a good chance of selling aren't available as awards unless I want to spend an insanely high number of miles.

Perhaps just wishful thinking on my part...an FFP would become a lot less interesting and valuable to me if it was just about clearing out my account the minute my existing credits are greater than the cost of the next flight I plan to book.

TravelerMSY

It wouldn't have to be too high of a revenue minimum to keep the mileage runners out. Just say nobody gets top tier for under 7 CPM in spend. I have to believe the ranks of top-tiers earned at really low CPMs has got to be really small though. And they're all on FT.

hobo13

Everytime I see this, my brain interprets it as FUBAR.