Originally Posted by
kokonutz
I've said it a hundred times over the past couple decades: if I were to start a FFP from scratch NO WAY would I go with a miles-based structure. It never ever made one lick of sense to me. But to airline execs raised in the days of regulated prices it made perfect sense because in those days distance = price, or at least the two were fairly well correlated. And even post-regulation that model still could generally be loosely applied. But by the time I was doing 100k miles a year in the late 90s that model was gone and I could fly from DC to Singapore for less than I could fly to Des Moines, Iowa.
So it may well simply be that today's airline execs were, like me, raised in the post distance=price era and so divorced their companies from that model. But having their social media feeds filled with cheapskates bragging about how they were hacking the airlines certainly was rubbing salt.
Anyway, again, all still just speculation...
I believe the reason airlines went with miles was two-fold -- first being that they didn't want to create a taxable event for customers and using dollars would put the programs front and center with the IRS. Miles are harder to value.The second is at the time, I don't think the airlines could easily track revenue. Mileage was easier as it meant base miles for each segment were set once and could be easily tracked.