Originally Posted by
RustyC
I think this is another way of saying what I had posted in the Delta thread, namely that if the airlines want to make it only about revenue for them, then for many customers it'll become only about price.
I'm set to be one of the hardest-hit, with 2-3 of my trips in a given year being Asia trips. Instead of up to 35,000 miles (if bonuses are included), it would be more like 9,000 on the ticket I'd usually get. Delta typically would be $200 or so above the floor (usually set by some Asian carrier with miles useful only in its own FF program). The miles won't drive the decision like before.
We still don't know what the fallout of this will be for DL or UA. The article basically agrees with those of us who've warned that the cuts are so severe that they disincentivize brand loyalty. People who fill sale seats at slow times have the most choice of any flyers, including sometimes the choice not to take the trip at all. DL is looking at the fare amounts and saying they don't deserve the benefits, which is the same mistake casinos have repeatedly made in looking down on low rollers. They learn the hard way that they need to attract both the high spenders and low spenders.
This is one of those cases where they have to feel the damage to change the thinking. There's plenty of precedent for negative changes having to be rolled back, but they think this time's different because of supply/demand and lack of competition due to mergers.
You offer a good analysis, but I think the key consideration is what you offer at the very end, which I've bolded. We're looking a very reduced competition here, which could well reduce the prices airlines might otherwise pay for the degraded FF programs.
Of course, things get considerably more complicated when we delve into the details of many folks accruing miles more through credit cards than flights, of DL being a pretty efficient airline (which attracts customers the old fashioned way, based on performance) and UA a problematic one (thus its losing formerly loyal customers), of the various audiences using FF miles and status for different, sometimes (but by no means always) overlapping purposes (premium international flights vs. domestic economy vs. upgrades), etc. But the bottom line could be what the authors argue: with accruing miles and status via actually flying becoming tougher (and more or a hassle), some customers will simply revert to price and convenience as the bases for their flying choices.