Originally Posted by
sbm12
Of course. And it is worth considering all of them. Just not in a vacuum.
No. Because if the rewards are now at one-way prices there is no requirement for r/t redemptions and there is no asymmetry. And it doesn't increase the difficulty of redeeming..
Let's set up a very simple example, just for argument's sake.
Let's assume 1 award seat per flight.
Let's assume 2 customers. One booking a one-way award (at 50%) and one booking a roundtrip (at 100%, obviously). Thus, the total value of the miles in this case is 150%.
If the customer booking the roundtrip gets the seat first, CO has had to give up 100% of the 150% available award miles in this case.
If the customer booking the one-way trip gets the seat first, then the customer needing the roundtrip is shut out of his or her entire trip (the asymmetry) and CO has only needed to redeem 50% of the 150% available award miles in this case.
Clearly, there will be other choices for the roundtrip redeemer, but the point is, every one-way redemption, because of its asymmetry, has the effect of reducing overall
roundtrip inventory. Thus, its effect on overall roundtrip inventory reduction is a factor of two.
This model only works if we can reasonably assume that there wil be more roundtrip redeemers than one-way redeemers, something we can, of course, reasonably assume, with a comfortable margin.
In fact, as long as one-way redeemers are one passenger below 50% of all award ticket redeemers, this model will have the macro effect of reducing roundtrip award inventory, thus increasing the value of the miles to CAL.