Originally Posted by Cambo

"Some" airlines seem to forget the whole purpose of their loyalty program: To reduce price competition and let people book flights which are more expensive on their metal than on metal of the competition. That people are prepared to pay more for a seat/experience because of the goodies they additionally get. Reduce those goodies and people will consider the competition and the airline will lose out on bookings. With the consequence that people who book later can get better pricing (because the cheaper booking classes are still (need to be) available and you lose out on the extra money you could make on the more expensive booking classes, etc. This is a self-reinforcing effect

Make the goodies reduction to big and people give you the middle finger for the loyalty goodies at all and become free agents, which in turn does move the flight/airline selection to a price competition, which you desperately try to avoid with your loyalty program.

Airlines also seem to forget that once they "grow", the number of flights grow, the number of destinations grow, and the more attractive that the airline becomes for frequent flyers. So, I'd dare to say, if an airline doubles the amount of flights, the flying by frequent flyers will increase more than that, maybe even significantly more. So, when your flights double, take care to be able to honor/handle 3 times the amount of goodie requests, IE, increase your lounge capacity more than proportionate.......