Originally Posted by Shareholder
Registration reduces the likelihood of having to give out bonuses to everyone and wasting costly AE miles. In most such promotions there's a relatively low "sign up" rate, so AC's liability to such bonuses is low. Consider automatically giving out 5K or double miles to every AE member who flies YVR-SYD rather than just those who register. Here's the numbers:
230 passengers, 75% AE collectors = 172 passengers
Double Miles represents 15Kx172 = 2,580,000 AE miles @ 1¢ = $25,800 per return trip
x 60 days of promotion = $1,548,000
And that's just one route! So consider the cost savings to AC for not having to purchase bonus AE miles for every AE members flying during the period. It makes a compelling business case not to be so generous and throw miles away by opening promos up to everyone without some screening down the numbers. And the liability. (That's also why the most generous mileage promos have been restricted to full fare and J overseas flights where AC's margins are good enough on these passengers that the cost for extra miles can be accommodate from the fare's margin.)
For some unbeknown strange reason........I never realized this issue was one of cost. Nonetheless, I am concerned about your math. Although it is accurate theoretically, it implies everyone who gets the bonus miles would eventually redeem the points for travel......and a certain percentage never do. I think the figured is 17%.
Regardless, thanks for the explanation.
CFB