Originally Posted by
AlohaDaveKennedy
Because of the black swans. The dollar may make foreign travel look good, but things like airplanes dropping from the sky and terrorist attacks may suddenly curb demand. You can never predict when the herd will suddenly stampede or we would all be rich playing real estate and the stock market. Delta is tap dancing in a minefield by turning on its customers.
So who bucks the trend? I just did a pretty good redemption on AA. 130,000 miles for a trip that would have been less than that a few years ago, but would have of course been 386,593 miles on Delta, with 194,732 points needed per night to stay at a Hilton. Perhaps AA and United try to win the propaganda war by devaluing less than Delta, but I am skeptical given Doug Parker's history with loyalty programs and United's unique view of how it should take more miles to fly a foreign carrier. It is a race to the bottom with even Southwest joining in.
I do not see any of the big airlines taking a position that miles were worth X when they were earned, and we are going to devalue existing miles at all. The issue is how low they will go, with AA, UA and WN going just not quite as low as Delta. The foreign carriers such as BA and Virgin will not require as many miles but will continue to increase their "cash fee for tax reimbursement" to a level that makes their programs virtually useless.
And even if things turn bad again, I do not see airlines needing to turn to the sell of miles to wholesalers to survive. That was yesterday's technique before the industry became an oligopoly.
My premise is that mileage earners are no longer important to the economics of the airline itself, and there is no reason for them to fear a "stampede" like you describe. There is no where for the herd to go, and the other airlines have little interest in customers who really want to fly all over the world in premium class without paying any real cash to the airline. The best days are behind us. Hope that everyone enjoyed them.