Originally Posted by
Raffles
Miles are different because you are filling seats which normal supply and demand has failed to fill.
This is why revenue based redemption is stupid.
Lets imagine well-timed flight A is $200 and badly timed flight B is $125. Under revenue based redemption, many people will still choose flight A and fill seats which could have been sold for real cash.
Under the current system, you simply make no seats available for flight A and push people onto flight B to fill seats that would otherwise be unsold.
Unless revenue based redemptions are also capacity controlled they will displace cash paying customers - which benefits no-one. Similarly, those empty J seats will remain empty when a revenue based redemption is 10 x the miles of a Y redemption - which simply pushes more pax into Y where the seats would sell.
Actually there already IS dynamic pricing of awards...and there has been since I got into the game over 20 years ago: 'saver' awards vs. 'standard' awards. In fact, anyone else remember when on UA a standard award meant no capacity controls; if there was a seat open for sale you could get it with miles? Ah, the good old days....
Saver and standard awards are the first step toward dynamic pricing for award tickets. And as smb points out, as points become more and more revenue-based, selling an award seats at a point price based on supply and demand makes more sense than ever.