FlyerTalk Forums - View Single Post - Impact of frequent flyer programs on airlines
Old Apr 17, 2005 | 8:09 am
  #39  
DLSTR
 
Join Date: Dec 2001
Location: MUC
Posts: 412
I see FFP to change a lot in the next years

IMHO the FFP are going to change dramatically over the next few years.

The way FFP are designed is in my opinion a big error, as these programs were rewarding frequent flights instead of rewarding high spending. This was not that big a problem when they were introduced in the early 80s, as fares were substantially higher and less diverse than they are today. For example there were no 199$ transcons during that time.

The problem is that many FFPs, specially in the US, reward people the same, whether they have spend $2000 for 6 el-cheapo tickets to Europe or two walk-up fares for $2000. Most likely the guy buying the 6 el-cheapo tickets is even rewarded more in respect of miles and status. As an reward he most likely earns top-tier and can probably get a Award ticket in Business Class for his miles, which sells for at least $3000. The business guy buying the two expensive tickets hardly gets anything. This is in my opinion not smart business.

Although DL stepped back from their Skymiles "enhancement" with lower miles for lower fares, I think this is a general, worldwide trend. Many airlines all over the world, as LH, BA, SQ, TG and others either allow only limited mileage earning on lower fares or are currently in the process of implementing this.

An interesting scheme is Air New Zealands new Mileage program, in which you earn Airdollars. These Airdollars are awarded to you according to the fare you bought. You spend them on regular flights on regular fares, no more mileage redemption chart necessary. The airline even has the benefit of charging Airdollars according to the demand of the flight.

Take this one step further and award the miles according to the amount spend, you are at the scheme I am expecting over the next few years.
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