Originally Posted by pdx1M

While I don't disagree that much with what you say I think what airlines would really want to do is to alter customer behavior to increase spend and margin. That is actually different from just finding the big spend or margin customers.

Best example: a business flyer on OPM who has a choice of two airlines for a trip next week at essentially the same fare and acceptably equivalent schedules. How does an airline get that customer to choose to make that trip with them? FF programs are a good tool for influencing such decisions and so long as that customer is buying a ticket that contributes margin and provided that the revenue management systems are good enough not to generally underprice that seat versus what the airline could get if they didn't sell to that customer, then the airline wants that piece of business. It isn't at all clear to me that a pure revenue or even margin based FF program will influence that customer's purchase choice.

The airline isn't in the FF program for the purpose of "being fair" or even "rewarding their most profitable customer" - they are in it to improve their business. It isn't at all clear that the move to dollar based programs in their current simplistic form actually does that efficiently.