FlyerTalk Forums - View Single Post - Will Frequent Flyer programs end?
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Old Jul 24, 19, 1:10 pm
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Remember, the entities we know as "airlines" are primarily credit card marketing firms that happen to operate aircraft as a means of connecting customers to credit cards. While the pesky expensive flying machines are a necessary cost, it's really the FFP that holds the whole thing together and makes the primary product, the credit card, so appealing to many. The FFP is a huge profit center, even in years when the airplanes are losing money.

The real question will be whether any FFP will wholly outlast its underlying airline. Some would argue that's already kind of happened with some of the airline mergers. But it's not that farfetched to think that an airline could go Chapter 7, but somebody buys the FFP asset and continues to monetize it because of credit cards, albeit with a new rewards chart.

A potential silver lining here is that the credit cards may be one thing that prevents the programs from all going to the pure-rebate model the way Southwest has. (Perhaps not a coincidence, WN is the one that has made money for decades on the core flying business. Of course WN also has credit cards, but it does not need them to survive.) There is a lot of marketing capital in the elusive aspirational awards, even though the general public often doesn't know how to best redeem them.
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