<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by venk:
After reading through a number of airline message boards, one can't help but notice the trend that almost everyone feels that their airline is decreasing the "free" FF benefits (ok CO more than AA) and/or degrading service unless you pay big fares.
A letter I got from CO hinted that what CO is doing now in terms of policy is the right thing to do to stay solvent and that any other airline which doesn't do this is going to be in big trouble. CO is clearly betting on high-fare ticket fares (low volume high margin) than lower fare higher volume traffic (which I suspect is a majority of the FF population). Is this greed as some have hinted or really the sane thing to do in this environment?
I guess my main question is are we in a phase where the frequent fliers are making decisions based more on value than on loyalty? If frequent switches and flying multiple airlines at a relatively cheap price becomes the norm than it makes sense for airlines to cater to those that provide them high fare margins than those that do cheap mileage runs.
Is the prevalence of cheap mileage runs doing a disservice to those that must fly regularly but cannot pay premium prices? Would it make sense for the airlines to differentiate between those two types of travellers or just ignore both and concentrate on the "high-end" crowd as CO has clearly set out to do?</font>
In order for an airline to be really successful, it needs to build loyalty among BOTH business and leisure travelers.
Aside of Bob's reason posted above, the airlines must realize that their most frequent business travelers also take vacations. If you make leisure travel unbearable (or un-upgradable, or non-rewarding, etc.), then that high-margin traveler might take ALL of his business elsewhere, assuming he has a choice on his business routes (and unless he's flying an obscure route, he does).
I think AA strikes a good balance between rewarding their EXPs *really* well, but making the lower levels worthwhile at the same time. I always have a choice between UA and AA. In 2000, I flew about 65 segments on UA, most of them business-related (on a mix of fares, some full-Y, some not). It was the treatment I received on one leisure trip that caused me to move all 65-70 segments to AA in 2001. (And I've been happy ever since.)