Originally Posted by
raehl311
You almost never want to frustrate customers.
There have been some very interesting discussions taking place that there are in fact a number of specific circumstance when you actually DO want to frustrate customers. When you have a group of customers who are not making a profitable contribution or worse who are actually taking money from you. (See you WSJ article on Best Buy)
Originally Posted by
raehl311
$4,000 on deeply discounted fares is still $4,000. If the airline didn't want to sell those fares at those prices, then it wouldn't price them that way - but the fact is, in order to pay to move the planes around, the airline needs nearly full planes. And a plane full of passengers on K fares is better than a plane with 4 people who paid $7k any day of the week.
See: Southwest. Low fares, but full planes.
If you can count on a passenger to regularly fill a seat on your plane at the prices you are charging, that's a good thing. Is it as good as a passenger who pays $7,000 for one seat? No, but you're not going to keep an airline afloat with those types of passengers alone.
I agree with you -- you need all those different customer segments with customers paying the highest yield that you can extract from them while filling the plane as full as you can. However, that doesn't mean you need to incentivize everyone or base incentives on a simplistic measure such as miles. Instead airlines can differentiate incentives -- and increasingly are. Airlines who have been moving to 25% mileage earning as the standard on competitive economy tickets have been doing better in the market than those whose programs offer 100% mileage. DLNW not only see this, but are now part of the same virtual company that is moving in this direction. After all, when full fare economy is earning more mileage than discounted business class (125%), you know changes are on the way.