Originally Posted by ozstamps
A far simpler system is more likely, such as the Southwest one I mention above - 1 free flight per 10 paid etc.
Cost to DJ is then near nil for all awards as all awards are capacity controlled on part empty flights.
Agreed that capacity control seems to be the key to making the FF program - any FF program - not just work but be profitable. In that regard, note that Southwest has just moved the goalposts on its Rapid Rewards program:
"Beginning February 10, 2006, all Awards issued will have no systemwide blackout dates and will be subject to seat restrictions. Restricting the number of seats for Awards helps us maintain our low-fare leadership and keeps the program lucrative for you.
Please plan ahead when making your flight reservations as certain holiday or peak travel periods will be in high demand and your desired flight may not be available for Award travel."
Interesting that AFAIK the only US airline that offered redemption on the basis that if there's an empty seat it's yours can no longer sustain that model. Presumably they looked at increasing the redemption cost in credits (which would have the same effect of reducing the overall number of award seats redeemed) and decided that controlling the inventory would earn them more in paying customers.