Why or Will Airline Companies Devalue Miles?
Dec 12, 2011, 7:56 pm
#1
Original Poster
Join Date: Nov 2008
Posts: 374
Why or Will Airline Companies Devalue Miles?
Has anyone think about why airline companies have the pressure to devalue miles?
I guess it mainly depends on the $$$ airlines get from "selling" a mile, i.e., the $$$ customers need to spend to earn a mile.
For a customer, miles could be earned from two sources.
(1) From flying.
The cost is rising, as the price of ticket rises.
(2) From non-flying, such as credit cards signup and spending bonus.
The cost is doping, due to much better sign up and spending bonus.
The airline company will have the pressure to devalue the miles, if (2) takes a significant amount of the total miles they sold.
Well, due to fuel price rising, airlines net profit per mile from (1) could be actually dropping, which again will cause the devaluation of miles.
I guess it mainly depends on the $$$ airlines get from "selling" a mile, i.e., the $$$ customers need to spend to earn a mile.
For a customer, miles could be earned from two sources.
(1) From flying.
The cost is rising, as the price of ticket rises.
(2) From non-flying, such as credit cards signup and spending bonus.
The cost is doping, due to much better sign up and spending bonus.
The airline company will have the pressure to devalue the miles, if (2) takes a significant amount of the total miles they sold.
Well, due to fuel price rising, airlines net profit per mile from (1) could be actually dropping, which again will cause the devaluation of miles.
Dec 12, 2011, 8:51 pm
#2
Join Date: Jun 2010
Programs: Whatever's Cheapest, Accruing Miles, Redeeming for Premium Cabins, Not Chasing Status Unnecessarily
Posts: 2,264
Has anyone think about why airline companies have the pressure to devalue miles?
I guess it mainly depends on the $$$ airlines get from "selling" a mile, i.e., the $$$ customers need to spend to earn a mile.
For a customer, miles could be earned from two sources.
(1) From flying.
The cost is rising, as the price of ticket rises.
(2) From non-flying, such as credit cards signup and spending bonus.
The cost is doping, due to much better sign up and spending bonus.
The airline company will have the pressure to devalue the miles, if (2) takes a significant amount of the total miles they sold.
Well, due to fuel price rising, airlines net profit per mile from (1) could be actually dropping, which again will cause the devaluation of miles.
I guess it mainly depends on the $$$ airlines get from "selling" a mile, i.e., the $$$ customers need to spend to earn a mile.
For a customer, miles could be earned from two sources.
(1) From flying.
The cost is rising, as the price of ticket rises.
(2) From non-flying, such as credit cards signup and spending bonus.
The cost is doping, due to much better sign up and spending bonus.
The airline company will have the pressure to devalue the miles, if (2) takes a significant amount of the total miles they sold.
Well, due to fuel price rising, airlines net profit per mile from (1) could be actually dropping, which again will cause the devaluation of miles.