headingwest

A quick question, and one that I've often wondered about...

I'm sure for a lot of people the possibility of attaining Gold status without flying Aegean is very useful. But what exactly is in this for Aegean if these members don't actually fly with the airline?

Surely Aegean don't make any money from airline miles being credited from other companies, as they have to pay out, in some form or another, when members redeem. And if a member isn't flying on Aegean, then they are not even paying revenue directly to the airline. Can someone explain the logic to this!?

greenarmy

Presumably there must be a spread between the average money in from other airlines buying the miles, and the average out from buying redemptions. Although interest rates are not that high at the moment, as it will take even someone crediting 48K a year to Aegean a number of year to build up enough miles to take the whole family on a big award trip, Aegean are essentially getting an interest free loan (perhaps even interest positive) for a couple of years every time a miles gets credited.

Also, I would suspect the number of Gold members who *never* fly Aegean is actually on the low side, even if there are a number who fly them only every 2-3 years. For most non-Greek Europeans it is hardly a chore for you to take a trip to Greece/the Islands for your summer holiday every 2/3years and being an Aegean Gold makes you far more likely to fly on them. Even if you are an America based flyer who usually flies domestic on UA, if you are the sort of person who takes out a FF membership of a European Program, and also therefore sees the potential of using miles to travel outside of the US, you are likely to travel internationally too! And if you are coming on holiday to Europe every now, you are now far more likely to fly on Aegean.

Perhaps they still make a loss overall on it, but I suspect it is not quite as slam dunk as it may appear.

Tokyoite

why not?
many airlines have similar conditions!!

headingwest

Quite possibly, but that doesn't answer the question!

Can you tell me which other programmes offer the same possibility?

greenarmy

Off the top of my head and definitely non-exhaustive:
OneWorld Emerald can be achieved through American Airlines AAdvantage without flying them (and in fact, is often easier to reach the spending required from partner business fares)
Star Gold can be achieved in Lufthansa's program without flying them.
SkyTeam Elite Plus can be achieved from Delta, or from AF/KLM's program without flying them.
Alaska Airlines' highest tier can be reached exclusively from partner flights (and also can be easier to achieve from partner business fares).

East_and_West

headingwest

Interesting. I didn't know that so many other programmes off this.

It really amazes me that they can afford to offer status, even if they don't get any revenue directly from the passenger.

RedChili

I think almost all programs offer this possibility. It's usually only the very top level (e.g. M&M HON) which requires flying with the specific airlines of that frequent flyer program. Whenever somebody is flying Star Alliance, the airline in question has to pay A3 a certain amount of money for the number of miles that are credit to the member's account, so A3 gets income from this. And when you use the gold card, it's the airline that you're flying with which is paying for your benefits, so that doesn't cost A3 anything at all.

jannosk

RedChili

In that case, A3 has to pay the other carrier. But in the end, A3 still makes money on the business. It's like when you're changing money. The bank always makes a profit no matter how you exchange. Before your vacation, you change money from your own currency to that of the country you're visiting. When the vacation is over, you change back what you haven't used. The bank makes a profit on both exchanges. It's the same with frequent flyer programs.

Tokyoite

These Star Alliance Airline programs (off the top of my head) do not have requirements to fly with them to attain/retain Gold status:
LH Miles and More
OZ Asiana Club
O6 Lifemiles
ET Shebamiles
TG Thai ROP
CM Copa connect miles
SA South African Voyager
TK Turkish M&S
etc...

fransknorge

:D!

But as BA and IB are owned by the same group, it is more akin to saying you can get *G by flying OA only (though of course IB is a proper member of OW, and as discussed extensively in another thread OA is not)

irishguy28

Because it would overly restrict the natural "catchment" area for what is, relatively speaking within Star Alliance, a geographically-limited carrier.

Rather than phrase the question in the rather negative light, I would instead say that A3 have hit upon a rather happy medium; flying on A3 makes qualification easier, but by no means is flying on A3 actually required to gain status.

And I would say overall that the number of programmes that require a certain amount of flying on the "native" carrier in order to obtain status is rather small; the default is that any qualifying flights taken on any partner should do.

sokolov

Of course they make money. It can be a good business.

Aeroplan isn't even owned by an airline (although Air Canada is in the process of re-acquiring a stake in it).