FlyerTalk Forums - View Single Post - Revenue based programs coming, according to this article
Old Mar 27, 2013 | 5:19 pm
  #17  
sdsearch
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The author's facts are wrong, so why not their conclusions?

One key claim of the author is:
"The major alternate carriers—Southwest (NYSE: LUV) and its AirTran subsidiary, JetBlue Airways (NASDAQ: JBLU) and Virgin America—already have revenue-based frequent-flyer programs. The more you spend with those airlines and their partners, the more points you accrue in their respective frequent-flier programs."
Not at all. With Southwest, you still earn a flat 600 points for just about every partner activity, except credit card and dining. Doesn't matter if your hotel room is a cheap Super 8 or an expensive Hilton, you get the same 600 points (before any bonuses). Doesn't matter if you rent a subcompact or a luxury car from Avis or Hertz, you get the same 600 points. Now, maybe that will change at some point, but so far the biggest airline with a so-called "revenue-based" program isn't 100% revenue based. (Also, earning on Southwest flights isn't as simple as based on revenue, it's even more dependent on the type of fare you buy, which may or may not mean more revenue!)

Having said all that: All the above airlines which have gone to a mostly-revenue program are airlines which don't belong to alliances or have much in the way of airline earn or redeem partners.. However, an airline that belongs to an alliance has to maintain some system of earning and redeeming across the various airlines in that alliance.

The one thing you can't do across an alliance is earn status (by the rules of another airline in the alliance). So it's much easier to make status-earning acrrual-based (as Delta just did to some degree) than to make earning, or especially burning, of an airline in an alliance (or with tons of worldwide partners, even if not in an alliance, as in the case of Alaska), be totally revenue based.

And, as has been mentioned before, factoring in revenue into status earning, as well as into some bonuses, is not new at all. (We've all seen bonuses that upon reading the fine print only turn out to work with fairly expensive fare buckets.)

Last edited by sdsearch; Mar 27, 2013 at 5:25 pm
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