Originally Posted by
The Lev
I think you are correct that "some" SE's will drop to E75K and some E75K to E50K, but I suspect there will be a pretty major culling of E50K's and below. That will free up lounge space (for more credit card people
) and save on fees AC has to pay Star partners when we use their lounges.
Many of hose who 'usted-to-could' be E50k and drop out will likely just get a card with lounge access if they fly 5 or 6 times a year.
AC gets a portion of the $600 for the card and annually and say… 1% from the points. Average spend of $6k per month That’s another $700 to AC. Round it down to $1000k per card holder for 5 lounge visits accompanied in a year = revenues of $100 per visit. If I recall *A partners paid $35 a visit a few years back…
Yes, AC needs to offer a value of redemption on those 72k points earned, but they also got 10 flights booked on AC stock in my example (why book on another airline is paying $600 a year for benefits). And with dynamic points redemptions the loss for AC is the opportunity cost of not selling that seat (with a relatively minor incremental cost relative to the whole).