Originally Posted by
Wx4caster
What is the latest status of the DoT probe into frequent flyer mile deceptive practices? A 100% increase in award ticket costs might warrant some probing...
It's a price increase. Are we going to ask the DOT to probe the airlines every time they raise a fare?
When UA removed the award charts, it was an extremely clear signal that they were going to do the same thing that Delta did when
they removed their award charts. Rather than kvetch about it now, we should be thankful that they gave us about four years of relative stability before the prices started to go to SkyPesos levels. People have been in denial.
Originally Posted by
escapefromphl
The cause of this sort of massive devaluation is more closely linked to consolidation in the airline industry than to consumer behavior. Yes the Points Guy is flogging cards buts that’s a constant effect.
Indirectly, maybe, because airlines aren't operating at 60% load factors anymore. But even if there were more airlines, I don't think anybody would be running at a 60% load factor. We've been struggling with an ongoing pilot shortage; there's a shortage of new aircraft; and airfares are lower than they've ever been.
When airlines are selling 85% of their seats, giving some away cheaply for company scrip is a bad economic decision, so the carriers are trying to wean the public off of that practice.
Originally Posted by
zombietooth
I'm not so sure because I recently read an article about the success of frequent flyer programs and credit cards as profit centers, and a airline rep was quoted as saying that they had sold more miles in the last 24 months than in the previous 10 years, and that it was really helping profitability.
Airlines are not adding excess capacity, so flights are mostly full these days.
Whenever you create more currency without increasing supply, whether governments or private companies, inflationary pressures are added to the system. The natural course of things is for the value of FF miles to keep decreasing in value. We will soon see UA miles consistently trading below 1 cpm.
There may be a hard floor at 1 cpm, at least for Chase cardmembers, if you continue to have the ability to erase United Airlines charges from your bill at 1 cpm. But otherwise, this is 100% correct. The banks have bought a pig in a poke because people keep signing up for these cards. Eventually the gravy train stops, but not until people get fed up collecting miles.
And it's not clear that people will get fed up. The FT community might be heavily invested in F awards. The general public is much more worried about being able to get domestic Y awards. And while you'll still find some eye-popping numbers in domestic Y, you can also find some relative bargains.