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Can frequent flier miles help bail out banks?

Can frequent flier miles help bail out banks?

Old Nov 15, 2008, 12:13 pm
  #1  
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Can frequent flier miles help bail out banks?

Frequent flier programs are said to be the most successful marketing idea of all time. Since American Airlines began AAdvantage a quarter of a century ago, more than 124 million travelers count miles with one or more of 140 airline programs, many of which have scores of airline and non-airline partners, hotels, car rental firms and credit card providers. Some frequent flier programs have as many as 200 partners. Nobody needs to fly to earn miles. Many airlines make money from FFPs by selling miles to program partners. United Airlines and American Airlines are said to generate more money in this way than by selling airline seats.

That's quite a universe.

No sooner had my think bubble filled up with asterisks and exclamation marks when a call comes in from Stanley Zilch, the fecund chairman of Blue Skies Travel Research Institute, a research institute in Broken Springs, Colorado.

Stanley reminded me that with 14 trillion unredeemed miles sloshing around the system there is more liquidity mileage, so to speak, than in today's beleaguered monetary systems. And with each mile worth an estimated 2 U.S. cents, that adds up to ....

http://www.iht.com/articles/2008/11/...l/trfreq14.php
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Old Nov 15, 2008, 3:43 pm
  #2  
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Rather than save the banks, it is, IMHO, far more likely that we are on the way to seeing the end of the bank tied FF programs.

The 2-3% interchange and other steep charges have been supporting the FF bonus programs to the benefit of FTers (and overall harm to the less sophisticated card users and the economy). But that interchange overcharge is on the way out--look at what happened in Oz--and without it the FF card bonuses and programs in current form cannot continue.
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Old Nov 15, 2008, 4:32 pm
  #3  
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Originally Posted by biggestbopper
But that interchange overcharge is on the way out--look at what happened in Oz--and without it the FF card bonuses and programs in current form cannot continue.
See Delta / AmEx - the latter now a bank AND historically relying on interchange fee - with the recent revision to "Always Double Miles" to "Double Miles on purchases from Delta" . . .
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Old Nov 22, 2008, 9:42 am
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Yeah, the FF programs are a perk which will disappear.
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