Originally Posted by
DataPlumber
Upgrades have always been space available. That upgrade or low miles award seat was/is one that was going out empty. ... Now, they're not going out empty.
... true, but domestic F seats aren't going out non-empty (before upgrades) for the most part just because demand is up. A huge factor that wasn't always the case is things like TOD cash upgrades. It used to be that the majority of F seats would go to elite upgrades, with the understanding that there always was the possibility that there would be fewer or no upgrades on a particular flight if there happened to be high demand for people paying full boat for an F ticket.
Originally Posted by
npretnar
I think that subsidizing your operations which lose money by profiting off of consumers who use your credit card with the promise of being able to 1) receive loyalty benefits; 2) use miles for various travel is not a sustainable long run profitability strategy. As loyalty benefits from spend become more difficult to use and (heaven forbid) AA ever massively devalues awards a la UA and DL, the value proposition of using the card to consumers on the margin also declines until the opportunity cost of switching to non-airline CCs is low enough that they forego airline CC utilization.
There's been speculation on FT for 20+ years that this was "just around the corner" - that we were almost at a tipping point - but it never seems to happen. I think one of the issues is that the majority opinion around here looks nothing like large segments of the traveling public, including those that have airline loyalty credit cards.
Originally Posted by
EXP100
The thought of free bags, priority boarding (which isn't really much of a "priority")
Those two things alone are good justification to pay for a $99/year credit card, even if you travel only once a year. Consider that the most common leisure traveler is probably a couple of some kind. One checked bag each on a domestic round trip costs more than the credit card. For those that don't check bags, priority boarding is a big benefit. Even as the ranks have swelled of those that have priority boarding, and even in situations where the base credit card non-elite traveler might be several groups behind Group 1, and even if they're at the very end of their boarding group, it's still going to be early enough to have room for their carry-ons without having to gate check them.
Those reasons alone are enough to justify an airline credit card for even a once-a-year traveler. And, assuming they're not heavily into "the game" as many of us are here, paying for one affinity credit card may be all they do. And, once they have that one, why not use it for many/most/all of their purchases? That might be enough for a pair of domestic RT tickets once a year. Consider the award pricing and availability situation for such travelers: tickets are widely available. I just checked award flights from my home airport to Las Vegas and Orlando for a random Tuesday a few weeks out, and there were plenty of options for 21K round trip. That's the same or cheaper than what it was 20 years ago. The gross award travel inflation that many around here complain about is certainly the case for international premium travel awards, but those are not relevant to the vast majority of travelers on a US-based airline.
I'm certain that McKinsey and BCG have done extensive crunching of the numbers and know what they're doing when they advise the airlines on such issues. What we don't know is in aggregate, how much airline revenue from credit card spend comes from the totality of the travelers/cardholders I describe above, vs the more typical FT user?