Originally Posted by
CrazyJ82
Based on scattered reading over the years, I get the sense the feeling in the industry is that if you had it to do over again, you would never design airline loyalty schemes the way they have come to be. They do a poor job at the margins of rewarding big spenders versus merely good planners, and via alliances often incentivize consumers to buy a competitor's product when they're in direct competition (ie CX vs BA on the LHR-HKG route). Most other loyalty schemes I know of are based on spending rebates and not primarily volume rewards. So I've resigned myself to the fact that airlines will eventually go the same way.
But the thing is: the premise of your argument is flawed. Despite glossy pretence otherwise, FFPs are not intended to reward anything. Airlines do not wish to reward anyone, they just want to make people fly more than they normally would, which is an entirely different logic.
From that point of view, the reason why some flights and itineraries are cheaper than others is precisely because airlines feel that the cheaper ones will be harder to sell, whilst the more expensive ones have such high natural demand that all seats will go at almost any price.
Now adapt that logic to spend: people who buy at high prices are effectively buying seats that the airline is confident that they will sell anyway, and in that sense, there is little need to incentivise anyone to buy them. By contrast, the cheap fares are the ones the airline feared would likely remain empty, and in that sense, you want to encourage people to buy them and indeed, encourage them to buy them over cheaper alternatives that may be offered by competitors.
Ergo, encouraging those who buy the most expensive seats and discouraging those who buy cheaper ones may, in many ways, go against the very logic of why FFPs may be useful, and indeed likely result in them becoming superfluous (you reward people who will buy anyway) to the point that you will soon find that you might as well discontinue them altogether as they switch from profit centre to cost centre because of your own strategy.