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A simple "Revenue Based Program"

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Old Dec 24, 2003 | 6:18 am
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A simple "Revenue Based Program"

I've often thought about this. Now it seems that it would be advantagous for many, or at least some, particularly Super Elites. It would be a true "Revenue Based" FF program.

It's based on the concept that money is more important to an airline than how much time you sit in their planes. And I imagine it would be stupendously easy to implement, should they decide to do so.

Quite simply, you earn 2 miles/points for every dollar spent.

Spend ~$2000 on an essentially full fare (Freedom) YVR-YYZ and receive ~4000 miles, just like now. Buy a slightly discounted fare instead (Latitude) for ~$1500, and receive ~$3000 miles, just like the recent past. But a highly discounted fare (Fun) for ~$600, and receive ~1200 miles, sorta like right now. Even buy the ultra cheap Tango fare for ~$300 and finally earn points, albeit only ~600. And buy the ~$2500 J fare and receive ~5000 miles, for a ~25% class of service bonus.

There could be other bonuses as well. Buy on one of AC's websites, and earn an additional number of miles, perhaps 10% more. Other fees, such as that for paper tickets, might be exempt from earning miles. But stioll others, such as lounge membership and admission fees, change fees, and so on, might also earn miles, perhaps at a different rate (1 mile/point per dollar?)

It would be truly fair to all concerned. Spend $500 on YVR-SEA and get 1000 miles (just like now.) Spend the same $500 on YYZ-LHR, and earn the same 1000 miles (just like in the near future.)
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Old Dec 24, 2003 | 6:42 am
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Those of us that start and end every flight with Jazz,and pay a hefty fee to AC for this,would like to see revenue come into the equation.Like your thoughts.
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Old Dec 24, 2003 | 6:45 am
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Yes it does sound better for the domestic travelers. But then the international travelers may start complaining!
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Old Dec 24, 2003 | 6:54 am
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Actually, it sounds better to those who pay more, regardless of where they fly. If they pay premium fares on overseas flights, they'll still be leading the pack in terms of miles earned.
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Old Dec 24, 2003 | 7:48 am
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From both the airline and travellers perspective this makes absolute sense to me.

It wouldn't make it as nearly a painstaking process for me to make elite since I normally buy full fare tickets.
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Old Dec 24, 2003 | 8:00 am
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At least two hotel programs have moved in this direction: HHonors and Priority Club. And one of Starwoods recent targeted promos that went to some members was based on "spend" rather than nights/stays. And when you consider programs like LH's, it really is more geared toward the price paid given the 50%-discounted Y, 100%-Y, 200%-J/C and 300%-F. And some like SQ, CX and now BA, just don't give anything for other than their highest economy, J/C and F fares.

Of course, the major problem with this comes when flying partner airlines, and some major variations in fares based on where on it flying from. Folks in Cairo would never make top tier elite because fares are so low!

But remember, CP was among the first carriers to tailor points/miles to fare paid when it dropped discounted economy on domestic routes to 50%. Many US carriers have followed to varying degrees in the coming year. AC's removal of status miles from some of its lowest fares is another step in distinguishing the yield it receives from various discount fares.

I think we are close to the end of this revenue-based refinement because using fares themselves is just too complicated. [Does a consolidator ticket get miles/points based on the fare printed on it, or the fare actually paid?]
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Old Dec 24, 2003 | 8:08 am
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I would like to see both. The normal AE accumulation of status miles but also have the different tiers tied to dollar amounts spent on airfare.

I am not sure what the amounts would be, but I will put out a suggestion for arguments sake.

Prestige $10,000-20,000
Elite $20,000-35,000
SE $35,000 +

Just a thought.
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Old Dec 24, 2003 | 8:17 am
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Cool! I'd still be SE.
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Old Dec 24, 2003 | 8:44 am
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Not sure if they still have this but I know a couple of years ago some of the US majors had this type of system in place for the tiers.
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Old Dec 24, 2003 | 9:55 am
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Shareholder's points about the consolidator fares and partner airlines (what about people with big MCOs? ) are good ones. Of course, the problem with partner airlines exists now. I wonder if the folks at Aeroplan like giving Elite status to people who have done two SIN runs on UA at a cost of about $1,100 US?

Fairmont's frequent guest program is also both revenue and nights based. They give Gold for $3,500 spending and Plat for $10,000. I think that's a fair way to go.
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Old Dec 24, 2003 | 10:09 am
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Ken hAAmer:

... &lt;SNIP&gt; ...
It's based on the concept that money is more important to an airline than how much time you sit in their planes.
...&lt;SNIP&gt;...
Quite simply, you earn 2 miles/points for every dollar spent.
...
There could be other bonuses as well.
</font>
You are essentially describing VIA's preference program. Tier level strictly dependent on number of dollars spent. Top level has dollar and segment criteria.

Bells and whistles. Once you make a higher level you earn more points for redemption per dollar spent. Does not change the level qualifying criteria. Also extra points for things like booking online.

http://makeashorterlink.com/?U241113E6
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Old Dec 24, 2003 | 1:46 pm
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Hello all,
Thank you for all the interesting posts -- I was thinking that a modified model of the BA Exec Club may be good for Aeroplan. Those who spend the big bucks earn more miles and the status while those who just want the miles can spend on the cheapest fares. While all members can upgrade using miles, only those with status will be issued "x" number of upgrades. Perhaps the best of both worlds??
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Old Dec 24, 2003 | 1:53 pm
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I'm not sure it's really that "simple..."

As long as you credit your miles to one programme, it may be reasonably simple. But, let's assume for a moment that I have a Star RTW ticket with a number of flights that I want to credit to several different Star FF programmes. Since the ticket is changeable (for a fee) it's absolutely impossible to figure out the exact revenue per segment until after all travel is completed. Do you think the airlines want to mess with this, and, would you want to wait for up to a year for the "mileage" (dollareage?) to post? And, if your status miles don't post for a year how do you handle elite qualification?

------------------
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Old Dec 24, 2003 | 1:56 pm
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I think the LH model would be the one to follow rather than BA Exec Club. If I'm that big a spender and an international traveller I'd be going for BA Gold rather than SE in AC.
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Old Dec 24, 2003 | 2:07 pm
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Aeroplan would also have to restructure their entire rewards system... A 25,000 mile short haul ticket would under Ken's model now cost you $12,500 in flights... (2 per $1 spent)...

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