SkyMiles to be based on dollars spent?

Old May 26, 10, 9:13 pm
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Originally Posted by SamuelS View Post
Friends don't let friends fly on Ryanair.
Ah yes, that'd be why I fly FR... I have no friends here to advise me not to

Originally Posted by SamuelS View Post
The British (and European) public is starting to realise that the cheap fares of Ryanair are not 'superlow cost' after all.
Eh? FR was almost $100 cheaper than BA for the last intra-EU trip I needed. And they very well can be superlowcost if you book ahead and don't check anything.

Originally Posted by SamuelS View Post
BA does a good job of articulating that here: http://www.britishairways.com/travel...penxtype=click
You aren't seriously using BA propaganda to advance a comparison vs FR? This is amusing on many levels.

First, who'd believe a word of BA's propaganda? For years, BA was worse even than DL.

Next, for years BA stuck their noses up at FR and pretended they didn't exist. Now they have to address them directly on their own website. Ho di ho.

No, these guys here do a much better if incomplete job of articulating why BA sucks:

http://britishairwayssucks.org/

Originally Posted by SamuelS View Post
The superlow fares have extra costs - ranging from paying fees to actually pay for the ticket, fees to check in (hardly an optional extra), fees for baggage (a lot more than you think), even getting hosed paying for Ryanair buses to/from their inconvenient airports with no other transport options.
Not at DUB or MAN. Main terminal, main airport service.

There were extra costs, it's true. Including 35E for checked bag and 4E for priority boarding. But guess what, the ticket price was 4E. And so, FR was still almost half the price of BA for the itin I last needed.

Even if they hadn't been, and the overall cost was the same, I'd use FR over BA.

Disclosure, since you may not be aware of this: I understand BA's mentality very well having been NRSA on them for fifteen years, among other things.

Originally Posted by SamuelS View Post
Ryanair is legendary in telling customers where to go when they cancel a flight - "come back in 3 days when we have the next flight scheduled".
All true. But MOL tells his customers openly to go to hell in the event of irops. There's no pretense of "Medallion" level service.

I find this honest and refreshing. It's a lot better for example than DL's :-: best in class :-: claim, which is undermined daily by their own awful SM program performance.
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Old May 26, 10, 9:23 pm
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Originally Posted by redtailshark View Post
Ah yes, that'd be why I fly FR... I have no friends here to advise me not to



Eh? FR was almost $100 cheaper than BA for the last intra-EU trip I needed. And they very well can be superlowcost if you book ahead and don't check anything.



You aren't seriously using BA propaganda to advance a comparison vs FR? This is amusing on many levels.

First, who'd believe a word of BA's propaganda? For years, BA was worse even than DL.

Next, for years BA stuck their noses up at FR and pretended they didn't exist. Now they have to address them directly on their own website. Ho di ho.

No, these guys here do a much better if incomplete job of articulating why BA sucks:

http://britishairwayssucks.org/

.
My daughter when she was in school in FL went all over Europe for virtually nil thanks to FR. That said, are you saying the BA comparison is inaccurate? If so specifically what is incorrect? Simply linking to an anti-BA web site doesn't really give much evidence except like all airlines they lose luggage and piss off customers. http://ryanairsucks.com/ is another site.
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Old May 27, 10, 12:49 am
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Originally Posted by redtailshark View Post
You aren't seriously using BA propaganda to advance a comparison vs FR? This is amusing on many levels.
It saved me typing. It's all factual. Propaganda by definition is meant to skew. The fees listed are all true! And yes, you can pay a small fortune if your average joe heading off for a 7 night holiday in the sun (no carry-on only there...)


Originally Posted by redtailshark View Post
But guess what, the ticket price was 4E. And so, FR was still almost half the price of BA for the itin I last needed.
Guess what. I priced up several Ryanair journeys and other airlines (notably BA) were cheaper when factoring in my checked baggage (coming back off a cruise), cost of cc handling fees, cost of check-in, and not even factoring in refreshments or other incrementals!


Originally Posted by redtailshark View Post
Disclosure, since you may not be aware of this: I understand BA's mentality very well having been NRSA on them for fifteen years, among other things.
Disclosure, since you may not be aware of this: I understand BA's mentality very well having worked for them for several years.


Originally Posted by redtailshark View Post
All true. But MOL tells his customers openly to go to hell in the event of irops. There's no pretense of "Medallion" level service.

I find this honest and refreshing. It's a lot better for example than DL's :-: best in class :-: claim, which is undermined daily by their own awful SM program performance.
It's ok to be different

I like the priority: boarding, check-in, assistance, phone reservations. I like the first class upgrades. Miles are secondary as I've said three times now. I find Delta immeasurably better than Ryanair.

I guess that's why there is room for more than one airline in the world - we all have different needs, wishes and desires!

Last edited by SamuelS; May 27, 10 at 12:55 am
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Old May 27, 10, 1:00 am
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they really risk alienating us cheapskates if they try to pull a stunt like this!
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Old May 27, 10, 3:20 am
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You could write a tome on this subject, but just few observations.

1) The airlines make a lot of money on int'l premium fares where they sell seats for way over anything approaching costs plus a reasonable return on capital. The only way this model works is because they give a kick-backs (i.e miles and other perks) to business travelers flying on OPM and because there is less competition on many international routes. If revenue based programs get too generous, employers will stop paying for premium fares or demand that the kickbacks go the company. (For reference the UA GS program does not provide any extra miles or UGs... just better service and higher priority for UGs).

2) The elite programs tend to be very sticky.... i.e. keep the customers loyal. There is a lot of revenue to be lost if the elites (including the high mileage moderate revenue ones) have no reason to be loyal.

3) The mileage and UG benefits provide an effective discount to those pax unwilling or unable pay for premium fares. Without these discounts, these pax will fly a lot less.
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Old May 27, 10, 4:26 am
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Originally Posted by 5khours View Post
You could write a tome on this subject, but just few observations.

1) The airlines make a lot of money on int'l premium fares where they sell seats for way over anything approaching costs plus a reasonable return on capital. The only way this model works is because they give a kick-backs (i.e miles and other perks) to business travelers flying on OPM and because there is less competition on many international routes. If revenue based programs get too generous, employers will stop paying for premium fares or demand that the kickbacks go the company. (For reference the UA GS program does not provide any extra miles or UGs... just better service and higher priority for UGs).
I am interested in your evidence for your above underlined statement.

Premium tickets are priced to sell and to generate premium margins. Most employers already receive "kickbacks" in the form of corporate discounts on these fares.

Originally Posted by 5khours View Post
2) The elite programs tend to be very sticky.... i.e. keep the customers loyal. There is a lot of revenue to be lost if the elites (including the high mileage moderate revenue ones) have no reason to be loyal.
Whether they are sticky or not doesn't matter if they don't influence behavior that is more profitable than the behavior without the card. As capacity is reduced to realistic levels the planes will be filled with or without someone acting against the interest of his company taking unnecessary trips to try to score a vacation or paying extra just to fly DL to earn personal miles or someone demanding compensation in the form of mileage and special treatment to be occupying a cheapo seat that could have been sold without a kickback.
Originally Posted by 5khours View Post
3) The mileage and UG benefits provide an effective discount to those pax unwilling or unable pay for premium fares. Without these discounts, these pax will fly a lot less.
I agree that the mileage UG benefits are a way of hypocritically trying to get around the legitimate restrictions that companies place on paying directly for premium travel for their employees.

If you are right that people would fly less without these benefits, then perhaps the business need for their travel simply wasn't there in the first place and this spending is therefore an unproductive drag on the American economy and waste of fuel.

If the UG benefits disappear and people still want more comfort in their travel in order to be induced to fly, then the airlines will be required to offer it rather than to hide behind the FFP and only offer it in a complicated casino lottery game to those who like gaming games rather than to those who are willing to pay for it. Imagine if everyone were receiving safe, humane and decent service. It would be like having a functioning national transportation system...

Last edited by Klm is Dead - Long Live KLM; May 27, 10 at 6:08 am
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Old May 27, 10, 4:29 am
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.....

Last edited by Klm is Dead - Long Live KLM; May 27, 10 at 6:09 am Reason: dup
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Old May 27, 10, 5:03 am
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Originally Posted by SamuelS View Post
I don't see myself as being 'bribed' with miles. Earning miles is quite secondary to the smoother travel experience, priority check-in, priority access to phone or airport representatives, priority boarding, and space available upgrades.
OK. So, you see yourself being bribed with receiving a better travel experience that in some ways is much worse than you would have had 30 years ago under regulation, but at least better than most passengers have to put up with today.

Yet, you brought up the miles and the biz class ticket yourself as the key factor before. So, clearly your thinking is evolving here.
Originally Posted by SamuelS View Post
I'm pretty sure many agree with me on this point. In today's hectic travel world, those little extras make the difference from flying being a veritable ordeal, to something far more bearable - if not quite civilised and enjoyable. It's worth so much, I'll even do superfluous mileage runs if I'm somewhat short on my 'organic' flying from hitting GM.
The 'cost' to DL to provide these to say 15% of their flyers is probably fairly minimal compared to the increased loyalty DL enjoys from this flyer group.

If DL was to nix the mileage qualification, and instead tell me that unless I spent $40k + a year on F and YBM fares then I wouldn't earn GM status, I'd probably rarely, if ever fly on DL again.

Maybe DL will decide that all their $15-$30k per year flyers aren't worth [redacted]. But that would be a heck of a lot of flyers, particularly domestic flyers.
That flying is an ordeal, most will agree with you. However, it would be better for the American economy and all Americans if the airlines were to offer service to everyone that is not an unbearable ordeal. You said it yourself, if you were not one of the cardholders being bribed, no way would you put up with the crapola product and service that DL is forcing down the throat of the majority of people who no longer have a choice who they can fly as the industry concentrates into local monopolies and national oligopolies.

FFPs provide an interference to allowing the market to do its work where there is competition by essentially buying off the criticism of what are often the most frequent and vocal passengers so that they can screw the rest of the customers even more and screw their employees.

While it is true that you have some additional benefits that others don't, most of which should be standard for everyone, there are some aspects of today's US airline industry that a Gold, Platinum or Diamond card won't help you with:

When you are on one of DL's planes in the future being driven by a poorly trained and inexperienced kid, with $100k in debt, no benefits and no career path, earning a McDonald's wage, sleeping on a couch at a buddy's house, eating only because of the help of food stamps and your airplane crashes and burns because you took off from the wrong runway or ran into ice for the first time or stalled on approach because the pilot was incapacitated from being too exhasted, you will be just as dead as the rest of the passengers.

In today's stage of industry evolution, FFPs are one of the contributing, distorting factors that lead not only to further reductions in service levels but also to safety being compromised.
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Old May 27, 10, 5:17 am
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Originally Posted by pbarnette View Post
This assumes that there is a sufficient market for that product and service to warrant differentiation.
It also assumes that a "free" market approach without significant regulation is a workable and sustainable model in the long term: the evidence so far points to this not being the case.
Originally Posted by pbarnette View Post
The reality is that, for most US domestic flights, it is a commodity because the value to the consumer of better service or hard product on a 3-hour flight is exceedingly low and you would never be able to recover the extra costs required to provide it.
Pricing to recover costs is not rocket science. Regulated utilities ranging from water to electricity to public transportation do it all the time. The US did it successfully for decades in the airline industry.
Originally Posted by pbarnette View Post
I seriously doubt that any airline could come up with a suite of products that provided sufficient utility to the customer at a cost that made it profitable, at least for anything beyond a very small network. You might see some boutique carriers try this angle (VX, for example, plans to serve something like 20 cities, max), but for any large, network carrier, the ROI for the investments in "quality" would almost certainly be negative.

Honestly, I struggle to understand why people keep barking for the airlines to compete on product and service.
Probably because they are so dissatisfied with the unacceptably low levels of product, service and safety that have resulted from so-called "free" markets that are mainly successful at lowering the price while ignoring the significant costs of having too low prices.

You are probably right that the market fails both the majority of consumers (that wants to have safe and decent service without exploiting employees) and the airlines (that want to compete without resorting to cutting deals with the government to engage in otherwise illegal behavior of unilaterally cancelling labor contracts and being exempt from prosecution for anti-competitive behavior).

There have been numerous interventions into the functioning of the airline market in the US. Unfortunately, most have been in the interest of propping up failed legacy carriers, abusing bankruptcy courts, exploiting employees and cutting corners on safety rather than in the interest of the flying public.

It is time that the market start to be subjected to some groundrules that force it to meet minimum standards of quality.
Originally Posted by pbarnette View Post
Many tried this and they all failed. Consumers have consistently voted for the lesser but cheaper product in the short-haul market. This is true in the US, it is true in Europe, it is true in Oceania, and it appears to be true in Asia. WN kicked the legacies' butts when they were still full-service. Ryanair kicked the legacies' butts when they were still full-service. Air Asia has been exceedingly successful in a market dominated by some of the "best" airlines in the business. There is simply zero evidence that quality trumps price.

Now, long-haul is a bit of a different beast, but even there, there is a lot of pressure on price and the market for premium services is relatively small and seemingly getting smaller. There again, the only way to be successful by appealing to notions of quality is to be a niche carrier.
"Quality" and "Premium Service" are not the same thing and are not interchangeable terms. One can offer premium service of very poor quality (such as the FC product in the states) and one can offer very high quality standard or economy product (if one does not passively release control of decisions about safety, minimum service levels, etc. to the whims of an imperfect market).
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Old May 27, 10, 6:52 am
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Originally Posted by Klm is Dead - Long Live KLM View Post
It also assumes that a "free" market approach without significant regulation is a workable and sustainable model in the long term: the evidence so far points to this not being the case.

Pricing to recover costs is not rocket science. Regulated utilities ranging from water to electricity to public transportation do it all the time. The US did it successfully for decades in the airline industry.
Translation: I want premium service, but there is no market for it. Therefore, I would re-regulate and raise prices for all, despite the fact that the overwhelming preference of the population at large is for cheaper flights, even at the expense of service.

And, frankly, I think the market is working just fine. The legacy carriers are in a bad way because they took too long to adjust to the market and came into it as bloated hunks of mismanagement. They never bothered to learn what customers really wanted because, in a regulated environment, they never had to. Those carriers that have consistently focused on delivering what people actually want (as opposed to what they say they want) actually do ok.

There is a sustainable model for the airline industry, it just happens that you don't like the model.

Originally Posted by Klm is Dead - Long Live KLM View Post
Probably because they are so dissatisfied with the unacceptably low levels of product, service and safety that have resulted from so-called "free" markets that are mainly successful at lowering the price while ignoring the significant costs of having too low prices.
No, it is because there is simply not enough actual value to be had to generate sufficient demand to run an airline of any sort of size. Most people will suck it up for a couple of hours. They may complain about it, but if the alternative is a significantly higher price, a lot of folks aren't willing to make that trade-off.

Even if the airline could develop a suite of valuable products to be bundled in with the cost of airfare, the reality is that not everyone would want the same thing. Not everyone wants a meal, or cares about an assigned seat, or wants to check a bag, or needs early boarding ,or particularly values priority security. You want better service? Your best bet is the trend toward a la carte pricing.

And what is all this talk about safety? Air travel is an unbelievably safe form of transport, and there is no evidence I have seen that standards of safety have actually declined over time.
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Old May 27, 10, 9:30 am
  #101  
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Originally Posted by Klm is Dead - Long Live KLM View Post
Most employers already receive "kickbacks" in the form of corporate discounts on these fares.
Most employers receive corporate discounts from airlines? No. A substantial chunk of the largest employers? Yes, but it's not all of them either.

And the talk about "'kickbacks' in the form of corporate discounts" is just twisted use of language as: "kickbacks" are a subset of corporate discount arrangements; and corporate discounts are not a subset of "kickbacks".
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Old May 27, 10, 10:09 am
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Originally Posted by pbarnette View Post
Translation: I want premium service, but there is no market for it. Therefore, I would re-regulate and raise prices for all, despite the fact that the overwhelming preference of the population at large is for cheaper flights, even at the expense of service.

And, frankly, I think the market is working just fine. The legacy carriers are in a bad way because they took too long to adjust to the market and came into it as bloated hunks of mismanagement. They never bothered to learn what customers really wanted because, in a regulated environment, they never had to. Those carriers that have consistently focused on delivering what people actually want (as opposed to what they say they want) actually do ok.

There is a sustainable model for the airline industry, it just happens that you don't like the model.
The Airplane Geeks Podcast had Darryl Jenkins, author of The Handbook of Airline Economics, on their podcast last week. He mentioned quite a bit about the legacy carriers resting on their laurels over the past 20+ years since deregulation and are only now trying to innovate. The interview is quite interesting, and begins at 45 minutes in if you don't want to listen to the news.

Key quote from the episode: "The airlines need to innovate, liquidate or consolidate, the pain is just beginning."
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Old May 27, 10, 10:42 am
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Originally Posted by n301dp View Post
The Airplane Geeks Podcast had Darryl Jenkins, author of The Handbook of Airline Economics, on their podcast last week. He mentioned quite a bit about the legacy carriers resting on their laurels over the past 20+ years since deregulation and are only now trying to innovate. The interview is quite interesting, and begins at 45 minutes in if you don't want to listen to the news.

Key quote from the episode: "The airlines need to innovate, liquidate or consolidate, the pain is just beginning."
Thanks for the reference. Interesting.
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Old May 27, 10, 11:20 am
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Originally Posted by GUWonder View Post
And the talk about "'kickbacks' in the form of corporate discounts" is just twisted use of language as: "kickbacks" are a subset of corporate discount arrangements; and corporate discounts are not a subset of "kickbacks".
I agree with you. There is no sarcasm smiley on FT.
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Old May 27, 10, 11:55 am
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Originally Posted by Klm is Dead - Long Live KLM View Post
...When you are on one of DL's planes in the future being driven by a poorly trained and inexperienced kid, with $100k in debt, no benefits and no career path, earning a McDonald's wage, sleeping on a couch at a buddy's house, eating only because of the help of food stamps and your airplane crashes and burns because you took off from the wrong runway or ran into ice for the first time or stalled on approach because the pilot was incapacitated from being too exhasted, you will be just as dead as the rest of the passengers.

In today's stage of industry evolution, FFPs are one of the contributing, distorting factors that lead not only to further reductions in service levels but also to safety being compromised.
While I do agree with you on many fronts, I think we'll have to agree to disagree on the point above.

Mainline pilots are well compensated, and usually very well experienced. I'm guessing your talking about the compensation of regional carrier pilots. The low level of compensation at third party contracted carriers is an ongoing issue/discussion at commuter/regional airlines all over the globe, and particularly in the US. I disagree however that the low levels of compensation and inexperienced crew at regional carriers is as a result (or partial result) of a carrier providing a Frequent Flyer program.
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