Originally Posted by
akcae
The point that Gary Leff has been making, and I agree with, is that the airlines are slowly killing the golden goose of FFPs by turning them into rebate programs based solely on revenue. They're rewarding most the most price insensitive customers (i.e., those paying most $$), and rewarding least those most price sensitive, which is the exact opposite of what FFPs are designed to do. FFPs, by offering aspirational awards, have turned something that is a commodity, a seat on a plane, into something people feel brand-loyal to. They're undoing this process now and killing any sense of loyalty people have towards them. It may work for now, but it is their undoing in the long run. The FFPs have for a long time been the most profitable line of business within the airlines, and there's a reason for it.
Totally agree. The two other things that surprises me a lot is that the profitability of the Big 3 is more than 50% of global airline profits (I read this somewhere and am not a 100% certain), and not for once did these airline management think that it could be because of their loyalty programs and not in spite of. The second is the massive blind spot they now have -- foreign carriers as well as the remaining 3 US airlines (Alaska, Southwest and JetBlue) can go after the loyal frequent flyers much more aggressively and even successfully.