Fredd

I'm trying to search through all the trees in these threads to find myself a forest.

Could the forest simply be a major move toward a revenue-based model in which cold cash trumps status and loyalty is discounted? As of now, the answer is clear to me but YMMV.

Many newly bumped-up MMers, 2MMers, 3MMers, etc. are understandably happy. Others (I'm among them) cynically recall the old saying, "When everybody is special, nobody is special."

Knowing nothing about the airline industry, I doubt that the new UA considers many of us frequent flyers to be all that important to their bottom line. I wonder if the purpose of the changes to MP is to motivate us either to spend more or just go away.

What do others think?

UA-NYC

Remember that was the main aspect of the leaked program that had everyone up in arms - $2K/$4K/$6K/$8K moving up the four status levels. Everything else mentioned by Lucky seemed to pretty much happen aside from that.

Won't be surprised once they're well past the integration if they try to again work revenue targets into all status levels, esp. if there's further industry consolidation.

Shareholder

Let's recognize that the program is already revenue based since those paying higher fares earn more EQMs or status credit and thus get their elite status quicker with fewer miles in the seat. If one pays for F all the time, even domestically, 1K is earned after flying 65K or so not 100K. That's a fair discounting for paying more. The rumoured model is still problematic because it can't easily factor in split itineraries where the fare is shared between two or more carriers, UA and its STAR partners. How is that situation credited to us in a way we actually know how much was spent with UA? I am sure the day will come, but am not afraid of its arrival.

KansasMike

The original America West Airlines had a revenue-based FF program. I was fine with it and was surprised it didn't spread to other airlines.



I'm MP 1P via segments. Three years ago I made 1K on segments, which is a very tough way to gain status, especially on a Colgan Air prop. I have to fly to a number small towns that, due to limited competition, have very high fares. If the airlines want to maximize revenue, then it would seem logical to tilt their FF programs in that direction. It's frustrating to watch people make 1K by summer each year who spend significantly less than I do.

So, my advice to UACO would be to figure out how to reward your most profitable customers and modify MP accordingly.

From a business point of view, I cannot see why they would want to reward unprofitable customers regardless of how many miles they fly.

Jorgen

To those who are upset about the erosion of frequent-flyer benefits, I have this to say:

Get used to it.

At some point in the past, the airlines got into an unsustainable arms race for the highest-mileage customers, working to one-up each other to offer better and better privileges to those who were willing to concentrate all their flying on one airline. Like all arms races, though, this was a negative-sum game... all the airlines would be better off offering *no* frequent flyer benefits, as long as the others didn't offer any either. And like many arms races, it had to come to an end; this one is currently in the process of ending via a peaceful demilitarization; all airlines are synchronously cutting back on frequent flyer benefits.

From the customers' point of view, there was a nice golden age, but it's over now, and it's only going to get worse. Unless the war gets started up again by the entry of a new competitor (unlikely, as new airlines such as Virgin America seem to be very much opposed to benefits-for-FFers business models) then we'll see a continued rationalization of frequent flyer benefits.

It was good while it lasted, but if you're gonna get angry every time they cut "your" benefits then... you're gonna spend a lot of your life being angry. Instead, adjust your attitude; don't expect your so-called "loyalty" to be worth anything, and be pleasantly surprised when it does. Let's face it, it's not like *other* industries reward buying all your stuff from one vendor nearly as generously as the airline industry does.

Fredd

Your entire thoughtful post is consistent with what I've heard others say and makes sense to me. ^

MoJ0

...or until there's more consolidation, fewer seats, fares rise, and people fly less. Rinse, repeat.

I remember making Premier Exec. back in the early 90s... not on segments or miles, but expensive short flights out of ORD to MSP, MCI, DTW, STL, CLE, EWR. The letter read something like "we understand you fly fewer flight miles, but spend considerably more, and want to reward your loyalty"

It was an interesting exercise going back through last year's ITINs to see what my actual spend was. Man did I (my company) drop a lot of $ on taxes!!!

entropy

Onepass is already a revenue-based reality. Not a long-term revenue reality, but a short term one. Any time any elite buys a Y or B class fare, they get their F seats. So a 1K on an E fare can get beaten by a silver on a B-fare. Even a GS on an expensive but not M fare is outranked by a silver buying a Y/B fare earlier.

Fredd

WN implemented a new policy in 2011 and I for one never noticed.

Quote:

While there's a common-sense element of fairness to the new scheme -- loyalty is better measured by dollars spent than by flights or miles flown -- the effect of the over-weighting for pricier tickets is a less valuable program for flyers accustomed to earning a free flight after eight cheap short-hop flights and redeeming for a pricey long-haul flight.

And it is just such flyers who unleashed their vitriol following the announcement of the new program's details.

http://abcnews.go.com/Travel/southwe...2756964&page=2

Does that ring a bell?

Forward to 2012:

Quote:

Southwest introduced a dramatically different Rapid Rewards program this year, switching from a system based on the number of flights taken regardless of length or fare to one based on the fare paid. The higher the fare, the more points earned. It's a boon for business travelers who buy pricey last-minute tickets or fly coast-to-coast frequently, but it angered Southwest customers who buy cheap tickets and take short flights, because they don't earn free tickets as rapidly as they did in the past.

The airline says it is adding new members at a rate that is 50 percent higher than in the past since the program debuted.

Indeed, the following timely poll is now up on FT's main page:

Should elite status be attained by how many miles are flown, by revenue from the amount spent on airfare, or by a combination thereof?

Miles

Revenue

A combination

So far it appears to be a three-way tie.

halls120

^^ to the new reality. When you look at PMUA's FF program, it probably was too generous.

Not to push this to Omni, but the consternation over the reduction of FF benefits is replicated in real life, as our governments struggle to control benefits previously bestoyed. Whether it's FF bonus miles or SS, people don't like reductions - even if they are unsustainable in the long run.

mherdeg

I noticed. For a WN traveler whose bread-and-butter route is SFO-LAX and who pays mostly advance-purchase fares, the shift from a per-segment award program to a per-$ award program dramatically reduced the awards opportunities.

Boghopper

Same here. I pretty much stopped flying WN when the change happened, as the benefits actually became less than the EQM/RDM I get on UA for the same route.

PBAudit

When the Frequent Flyer programs were established (early 80's), they served as a good proxy for profitabilty (revenue). Remember that the lowest fares required a Saturday night stay and business travelers were paying a much higher average cost per mile. Southwest was still a regional airline and only exerted pricing pressure on a limited basis.

Given the relative high cost per mile, the vast majority of Premier Executives and 1k's were traveling for business, and thus were paying higher fares (to avoid Saturday night stays).

As a general rule, the more miles you fly, the more likely you were traveling for business and the stronger liklihood that your average $ per mile was much higher. Thus, there was a major incentive for the legacy airlines to make their top tier benefits much more attractive to attract these high mileage/high revenue/higher profitability flyers.

It has only been the last 10 years (?) that this relationship has been severed. With low prices on one way travel and the ability to gain miles on other (alliance) airlines, it is not uncommon to achieve high status with a much lower cost per mile. There is no longer a strong correlation between high mileage and high profitability.

If you take the perspective of the airlines, they are simply trying to adjust their existing program to generate a higher revenue per mile. Add the focus on profitability, not market share, the changes (Global Services, Selling upgrade, Y fares getting priority, etc) over the past several years make sense.

Southwest, took a radical step and scrapped their original (segment) based program to a revenue based program. It was easier for Southwest to pull this off, since awards automatically expired after a year. You cannot accumulate awards (segments/miles), indefinitely as you can with the legacy airlines.

Undoubtably the legacy airlines have considered going to a revenue based program, but are unable to do so because of the accumlation of (billions of) miles.