Originally Posted by avidflyer

I agree. The only thing I believe that continues to keep FF programs alive is the very difficult inventory planning task and the balance of maintaining tight inventory control and growing the business. We have been in a downward inventory position for several years now. Under the CURRENT (flat to declining) inventory position the Airlines hold all the cards and the FF program appears to not add a lot of value. Once the economy turns and the Airlines are chasing more share by adding back in capacity/inventory THEN the FF programs are worth their weight in gold. Unlike most businesses, Airlines cannot add back capacity one seat at a time. It is 100+ or nothing (on longer routes) and that is when they need the FF'ers to fill those airplanes, particularly on business travel days. That is the whole idea of these programs but they were designed for a growing business not a declining (top line) one.

I will predict that we have one more cycle of FF program push before they eventually go away. The tools to manage inventory/capacity are getting VERY good (though the growth chasms still need to be crossed) and at some point will get so good at predicting demand (along with a good variety of AC gauge and reach) that the ALs who have the technology/capability to manage inventory will not need it.