Originally Posted by
sdsearch
And notice that the only airlines which have ever gone to this somewhat-money-based scheme are ones which have only single-class planes. Because money-based schemes (on the redemption side0 are completely untenable for a multi-class airline (no one who ever flew economy would ever be albe to redeem for a business/first award again, and it's business/first class seats that more often go unsold and so are relatively "free" for the airline to "give away"). In the legacy world, it's common to have business (first domestically int he US) class cost only 2x to 3x the miles, even as it costs 5x or 10x the dollars. That difference couldn't be maintained with a "simple" cash-based scheme.
Great post,
sdsearch!
One minor correction: VX, Virgin America, is not a one class airline. They sell a very nice premium cabin (nicer seats than the legacies offer on most domestic aircraft but not as nice as UA/AA premium transcontinental F). Also, Air New Zealand has a primarily spend based FF program, and they are a multi-class premium international airline. The VX and NZ FF programs are a terrible value for those of us seeking to buy cheap economy tickets and redeem for expensive business class tickets.
While as a very savvy FTer, I am not typical, I get a 100% return on my flying by earning on cheap economy tickets between cheap city pairs and redeeming for expensive business class tickets between expensive city pairs. If legacy FF programs were cash based, I could not do so. However, those expensive seats I redeem on LX on AF in business class would not be otherwise purchased from me on those airlines at the $8000 business class fares if FF did not exist. So LX and AF are not loosing much $ by giving me those seats that would otherwise fly empty. What they are giving me is worth far more to me than it cost them to give it. That is the key to successful legacy FF programs that the likes of WN miss.