Originally Posted by
escapefromphl
Delta's bet is that 90% of the 99% just decide on price, so this change to hugely decrease the amount of miles they receive just won't affect things that much. Caring about your frequent flier status is not in the future of the average middle class American.
So lemme get this straight...DL believes that people will make choices on dining location, mortgage, banking etc just to collect miles, but actually FLYING is exempt from this effect?
Originally Posted by
BearX220
It's the whole broad middle swath of frequent flyers, between the 1% and the Hefty-bags-for-luggage crowd, that is persuadable by FF incentives to throw more business to Airline X with some sacrifice of convenience or economy. These changes drive that very large cohort to resort to shopping on price, with less brand loyalty, and subsequently less PRASM to the airline. And if there's an airline out there that knows about cratering PRASM right now, it's United.
Bingo. And what we have learned from UA is that it's bad for PRASM if even a moderately large number of mid-tier spenders leave. Those are the folks that book in advance and fill the cheap fare buckets so the last minute fares can be as expensive as possible and in essence pure profit. That is what revenue management is all about. Otherwise, DL could just flat price each ticket based on distance and minimum yield (say $.30/mile) and call it a day. But they can't fill the planes that way...hence the dance...