GUWonder

Blame the audience, for the audience is driving the market and how the market is supplied.

And those who have the expertise -- including on FT -- and do the analysis don't necessarily always have the time or interest to put up unabridged versions for general audiences or to engage in in minutiae discussion about all that they know and how they got there.

Time for people is a resource in finite quantity, and there have always been consequences to that, consequences which mirror what happens today. Even in the "good old days", it wasn't any better.

travelinmanS

I believe that these new programs won't do much to hurt the big 3s business domestically. What will happen, however, is the person who flew 2-3 times a year to Asia will re-consider always flying on Delta/United and will throw their business to foreign carriers where service and amenities are much better. I would expect a lot of "capacity rationalization" over the coming years on Asian flights by UA/DL and a corresponding increase in capacity by foreign carriers.

Boraxo

+1 Many of us accummulate 100k+ miles plus bonuses annually solely through paid tickets. The CCs points are a small fraction of my total pile. Homey (like the vast majority of people) don't churn cards or manufacture spend. And I predict that game will soon be ending.

You shouldn't assume that true BIS flyers are damaged - many of us are better off under the new system. Mostly it's the low budget travelers that lose out.

As for the honey trap, that's probably true but only for stupid people. I always select flights based on price and convenience, being at a UA hub usually makes that an easy decision particularly when you factor in the perks (free checked bags) but I will fly AS, WN or any other airline that makes sense if it saves time & money. Anyone who blindly pays extra to fly a particular airline is a fool, and that's been the case for years, excepting those on the margin of elite status levels.

Agree about CCs - I think the vast majority (excepting those few churners/spenders who save for C/F international) overvalue the miles when the same spend gets you unrestricted cash to spend on travel or anything else.

Disagree about hotel programs - the points are actually more useful to me than miles because I never have enough hotel points to meet my needs and rooms where I vacation are expensive, i.e. Vail in March. However I would agree that contrary to airlines the elite benefits for hotels are not useful unless you travel enough to qualify for SPG Plat or Hyatt Dia.

AMRivlin

I am a mild churner (where I will keep a lucrative card 2-3 years, then close it) At one time used to be a BIS 1k/elite. When my career changed and the market shifted, I resorted to using credit card offerings to fill in the lost benefits (priority access, seating, baggage, lounges, miles)

In fact I think the credit card offerings have become better over time. AMEX Plat, $450 less many promotions, I generally come out ahead in terms of value.

When I reach enough for long haul redemptions in J, I will cash in.
If there is a transcon selling for $900 in Y, I will generally use miles for a flight.

I even bought into Lifemiles as a backup pool for when I was short on UA miles.

I don't go as far as calculating the value of each mile, but I do take into consideration what is cheaper and where can I get more value.

A cashback card (even if it was 4%) doesn't net me the value I achieve with Airline cards.

For full disclosure, I carry about 8 "annual fee" cards, and about 4 no annual fee cards to keep my average age up, and my credit score lingers around 800.

Tchiowa

I have to challenge this analysis. Flying is the number one source of my miles, probably 70-80% of my miles. Second is using the Chase UAL branded card to charge my flights giving me about a 1/3 boost in miles per flight. The rest of the sources are trivial to me.

Tchiowa

Yes, but at the same time they will attract those who normally pay a high price for tickets. My R/T to Asia on UA starting next year will net me over 60,000 MP per flight ($ spend X bonus for status + UA branded CC paying for the ticket). Yes, that makes me want to choose them.

Dieuwer

The pool of HSCs (High Spend Customers) is finite. If UA attracts a new HSC, he/she mostly likely comes from DL or AA. Conversely, DL might attract a new HSC, which UA is losing.
The net gain is ZERO.

angatol

.....

Andy2

Yes, but what I am pointing out is that a number of FTers in the Credit Card section claim to have gotten 1,000,000 or more miles from churning the Citi AA Executive card. And some of those posters claim to have cancelled each new card in order to get the annual fee refunded. Those posters use manufactured spending to get the $10,000 of spending on each card.

I have gotten a couple of these cards, but I do not find it ethical to cancel the card without paying the annual fee. Still, we are talking about 110,000 AA miles for around a $400 outlay.

A road warrior has to do an awful lot of flying to get 1 million miles. Many years ago, that road warrior would have an enormous competitive advantage of getting free seats. He would have more miles than anyone else and there were few enough miles in circulation that the airline made a lot of free seats available.

Now that road warrior is more indifferent as to which airline he flies when mileage accumulation is considered. While he is flying, someone else if earning through these techniques a ton more miles than he can hope to earn by flying. The road warrior has more difficulty getting free seats, so mileage accumulation with respect to flying a certain airline becomes less important, regardless of whether the airline uses a distance or revenue basis for awarding miles from flying.

That difference between today and long ago is completely ignored in the article. I do not believe as many people choose to fly a specific airline solely to ear miles from flying. They are more likely to do so to achieve status.

darthbimmer

Indeed. Many of us business travelers stand to gain from the switchover to revenue based points. A lot of us book close-in fares and consequently pay a lot more than most leisure travelers. As a quick data point, I booked flights on Monday for a round trip to PDX on Wednesday. On UA out of SFO with the current distance based system I would have earned 1100 base miles. On WN with its revenue system I will earn more than 5000. This is a 5x difference all else equal.

Maxxis

Indeed these generous credit card offers are pretty much unique to the US market, much like protagonist said. Due to the high APRs and large percentage of Americans paying credit card interests, these card companies can afford to attract more potential interest payees to its user base with these offers.

My home country of Taiwan for example, has APRs capped at 16%, and 89% of the credit card user base pay in full every month with the average credit card debt being less than USD 130. It is not hard to imagine why 1% cash back cards and airline mile cards are so hard to find. Banks simply don't make enough profit from card holders to offer these benefits.

Airline miles are a different story, since some can be "traded" for monetary value. People can and do redeem reward tickets for others for cash, therefore these third party redeemable airline miles actually have a cash value of USD 1.5 to 3 cents per mile.

Tchiowa

In theory, true. But the pool of low spend customers, while larger, represents very little as far as profit margin. And they are completely fickle, shopping for price only. So the airlines go after the HSC.

Dieuwer

How are hotel points useful to you if you never have enough of them to be able to use them?

pbiflyer

I would suspect the same as money. Useful, spend it when you can, but never can have too much.

rajuabju

I guess I'm just a big bad bear that loves honey.