FFP's cannot be seen purely as an isolated stand-alone business. They are loyalty programmes so the loyalty generation aspect is the key consideration.
The purpose of them primarily is to encourage customers to spend their cash on the flights in order to generate the FF points/miles. Very few DC customers are FT savvy. Very few DC pots are constructed in the way that FT'ers have populated their accounts. Most accounts are largely full of points earned the hard way. It's how much incremental business BMI believed they had earned from offering a world beating FFP that is the key consideration for them in deciding the profitability of DC.
It isn't just a matter of redemptions cost and miles selling to partners.
All would normally be true of a FF scheme.....But, anecdotal evidence would suggest that there is not much linkage nowadays between DC customers and BD customers, the last time I flew BD metal was LHR-MME! I know I'm not alone. I suspect that the chopping and changing of routes has driven BD loyalty to an all time low, witness the jungle jets and low load factors everybody reports. My conclusion is then that DC is worthless as a loyalty scheme for BD and as far as IAG are concerned all these * big hitters we keep hearing about would far rather catch a number 9 bus than fly BA so I really don't think IAG are bothered about them as they prefer to fly * and will just decamp to the next best generous scheme, see the other thread discussing exactly that.
The one banker for BD will have been the positive cash flow benefit of DC whilst we we all earning. But now we are all burning, that benefit to BD reduces,allbeit that they won't pay partners, Hopefully!, till after we've flown...
I reckon it is exactly a case of redemptions cost and miles selling to partners. As others have said maybe a 2 for 1 switch into BAEC is the best we can hope for
