Have a few questions on how FF plans work
 

Was hoping someone can answer these? Couldn't find much in a quick search.

1. How do they work? Say if I have a BMI FF membership and fly on Thai. BMI credits me 10,000 miles for a 5,000 miles trip in Business. Does Thai pay anything to BMI for this? As Thai has taken my money but BMI has given me miles.

2. If I redeem with say US Airways they don't charge any YQ for LH flights but BMI charges me YQ for the same. So who actually gets to keep the YQ? Is it sent onwards to the airline or does the ticketing airline keep it?

3. If I buy a LH Business ticket through miles on a US redemption how much does the other airline stand to make? Do they have set rules or do they tally up how many flights each other has sold?

4. If I buy a NYC-LHR-MAN ticket on AA, does AA pay BA for the LHR-MAN ticket or do they in turn cancel that out against a NYC-BOS ticket that BA have sold? How do they price the markets? On miles flown or ticket prices?

Thanks ^

I don't know that you're going to get any specific answers, since most if not all of the programs consider the information you're looking for to be proprietary information.

However, for what it's worth some others who claim to know have said that as to questions 1 and 3, there is a cross-payment in principle, but some airlines have an agreement between/among themselves to offset flights bought for miles from one FF program on another carrier with flights bought using miles from that carrier's FF program on the initial carrier.

As to your question 3, I think many of us would like to know the answer to that question.

the airlines have a method of settlement for ff mi issued & redeemed for/between each other as well as payment for code shares, tickets endorsed for irrops....the procedures have become more complex, at 1 time it was mostly settlement for tickets....

I think you are asking about airline alliances and not frequent flyer programs. FF is on the consumer end of the airline industry and the alliance is obviously the corporate side.

I think airlines use alliances to spread the costs they incur and to increase their efficiency and destinations.

That is just my basic view on it. I am sure there are theoretical papers written about this topic, you can try to find answers there. If that does not help there is always Wikipedia.

Not much on there or google that explains it.

is there something you are looking for other than curiosity?

Just that.

Actually I am most interested to know why some airlines charge YQ on awards and others don't.

Surely if your competitors are charging it then it makes sense? Or else do they not charge so they can fill more seats. So they make money off awards or just filling up empty seats.

Hence why most of the above questions cropped up.

Just speculation, but not mere speculation:

There are at least two factors that affect whether an airline charges YQ on award tickets (and undoubtedly more factors than just these two).

1. Common practice in the (local or regional) industry. In the US, for example, locally-based airlines don't do so as a general practice, so if one decided to implement the practice it could find itself at a competitive disadvantage.

2. Legal and regulatory constraints, including consumer protection laws. In some places (the U.S. for example) you cannot call something a "tax" unless it is in fact a tax, and you can't say something is "free" unless it is free. So, you can't advertize that a customer can earn "free flights" or "free, but you must pay taxes" when you add a normal cost of providing the service and also charge for that. (How about "free, but you must pay the cost of our employees' salaries, fuel, overhead, equipment capitalization, and profit"? Doesn't sound so inviting, does it?)

(Of course, #2 also has an effect on #1.)

Valid points but UA and CO charge YQ where as US does not. Both same alliance/market.

I guess I'm missing something. When did United start charging fuel surcharges on award tickets?

Check out this "Wiki" instead:

http://flyerguide.com/wiki/index.php/Main_Page