I'm intrigued by this idea of "penalties" (points) for less-than-perfect performance. For every minute that the flight is late you get 10 points (or whatever). For every minute it takes to get your bags to the carousel it's 10 points, whether you check bags or not. (That way everybody gets a minimum number of points for a perfect flight.) Subject to (generous) maximums.

You could have some really terrific ads with this. For example: "Ladies and gentlemen, this is your captain. We apologize for the weather delay..." (Cabin erupts in cheers.) Promote it as a competitive advantage, that other airlines won't put their money where their mouth is, so to speak, and that your airline has an added incentive to aim for perfection.

Of course, that's contingent on Independence actually doing a decent job. If everybody's earning maximum points, it'll only slow defections to other airlines.

I think you're hearing a lot of people wondering about point redemption. If you have "Less Than Perfect Points," then it would be fitting to make them redeemable for things people can use with imperfect performance. Hotels stays, for example. But I'd agree that an international partner would make sense. Obviously I'd look at the Dulles international carriers, which I'll list here: Aeroflot, Air Canada, Air France, ANA, Austrian, BMI, BA, BWIA, Grupo Taca, Ethiopian, KLM, Korean, Lufthansa, Saudi Arabian, SAS, and Virgin. Might also consider Cunard's QM2 for your ultimate award.

As for elite status, there are still plenty of perks you can offer: first boarding, preferred baggage handling (if that's possible), blocked seats, free alcohol (passenger and companion), accelerated point earning (for imperfection, of course), guaranteed window or aisle preference (to the point of calling up a non-elite at the gate to issue a new boarding pass), priority rebooking/standby, preferred alternate carrier rebooking (if substantially delayed and as available), one courtesy refundable nonrefundable per year, two free cargo shipments per year (might be good marketing anyhow, and you could call this the "I forgot my golf clubs" benefit), employee "good job" tip coupons (so elites can reward and motivate your exceptional employees), and, for super elites, a personal visit to Independence's flight training center with some airplane simulator time. Elites also get a dedicated reservations line and 12 hour advance e-mail notice of leisure fare sales (such as weekend specials). Might also consider one free family emergency trip (e.g. funeral) per annum for elites.

On rewards and perks, always think of things that (1) the business traveler can't get reimbursed by his/her employer and (2) they can actually use (or at least aspire toward). I agree with the other poster who said that, as a business model, you don't necessarily want people to carry near-zero point balances because they can (or want to) redeem quickly. You want them working toward higher rewards. It's a fine line, though. The rewards can't be too out of reach.

Good luck!