What if all frequent flyer programs and frequent guest programs were to adopt a system similar to TWA Aviators? That is, members were rewarded with elite status based on what they spend rather than how many miles (or segments) they accumulate and how many nights they stay. After all, aren't these programs designed by their companies to attract business? Here is an example of the sort of thing I mean:

Suppose you frequently take short trips at a very low fare that equates to $100 per segment. You do these with a airline that will give you elite status for flying 30 segments. Thus, you obtain elite status with that airline by spending $3000.

On the other hand, suppose you only do 5 trips a year at 4 segments each, but as a business traveler, you cannot plan far enough ahead and spend an average of $250 per segment. This amounts to $5000 and you do not qualify for elite status since you only had 20 segments.

Which of these two travelers is more valuable to the airline? Certainly the business traveler spending $5000 has generated more profit for the airline.

Suppose that all of the airline and hotel programs were to provide elite level tiers based on dollars spent rather than frequency.
For example:

$5000 qualifies for elite level 1
$10000 qualifies for elite level 2
$20000 qualifies for elite level 3

I came up with these number using 20, 40, and 80 segments times the $250 per segment cost.

A similar schedule for hotel programs might be:

$1500 qualifies for elite level 1
$5000 qualifies for elite level 2
$7500 qualifies for elite level 3

I came up with these figures using $100 a night as the base cost and Mariott's Marquis scale for number of nights (15,50,75).

Would not such a system be fairer to the business traveler? Who do the program want to attract anyway? I am not suggesting eliminating traditional qualification levels, but merely adding another way to qualify.

the more business ($, SFr, DM, etc) a company brings to an airline, hotel, car-rental, etc. company the better price they will achieve (rebates/discounts) - that's already the case today.

and as a recompensationfor what the fflier endures (and that's measured by time/distance/and class) he gets some miles for future upgrades or trips in his free time.

I think this is fair and reasonable for all involved parties: those who pay get a better price, those who suffer get some comfort, and the airlines are more likely to have full flights.

The discounted eco-traveller contributes too to the comfort of business-class- and first-class-travellers. Only because of so many people who can afford today to fly (in eco) are the airlines able to provide such a big choice of offers to the business-people (more choices/options like flight times, direct flights, connections, etc.).

I have problems with any incentive program that is not in the best interest of the party paying for my ticket (my employer). I truly enjoy business travel and its reward, but I feel obligated to make a diligent effort to do it as economical as possible.

Corporate Travel Managers have been upset at TWA since they came out with this program. It runs counter to most organizations travel policy.*


*The magazine Business Travel News www.btnonline.com has covered this heavily in the last year.



[This message has been edited by Craig6z (edited 07-10-1999).]

I too am forced to economize for the sake of my employer, but I (and my employer) still end up paying a great deal of money for my travel. All I am trying to point out is that if you do end up spending the kind of money that I listed, don't you deserve elite status, even if you fall below the required segments, miles, or nights?

As I travel throughout the country and have to choose the most economical flight, regardless of carrier, to meet my employers requirements for reimbursment, I often miss qualification for elite status simply because I did not fly a single carrier enough.

On the other hand, as many of my trips are at the last minute, the fares I pay are exorbinate. So I often generate the levels of revenue for the programs I have listed, and yet do not receive any kind of elite status.

I am not suggesting that companies or individuals spend more simply to attain elite status, merely that if you do generate this kind of revenue for an airline or hotel, you should be rewarded for it.

I'd much rather stay with the status quo. Many promotions these days are targeted towards business class/full fare etc. Dollar based schemes are more prone towards wasteful spending, and I am sure that corporations would not welcome them.

If you are spending large amounts of money but not getting elite status, ask your travel agent to get you one.

[This message has been edited by pgupta011 (edited 07-10-1999).]

...or book all of your last minute trips on TWA to get their revenue deal.

Please don't misunderstand, you deserve credit for trying to spend the least amount of money. The problem I have with TWA's program is it creates an environment where the less diligent employee can get "enhanced" benefits for manipulating a company's travel policy.

It may be true that employees are manipulating the system to get additional fare cost miles through the TWA system, but FF programs in general have to be one of the biggest sources of inefficiency in corporations with employees who travel anyway. Admit it, haven't we all taken a connecting flight instead of a non-stop at times because we can't get there directly on the airline we want to accumulate our miles on? And that lost time is time when you are not operating at peak efficiency for your company. I would venture to say that this is a far greater loss of corporate value that the minor additional cost that someone might try to get out of a TWA higher cost fare to get more FF miles.

Djlawman

Kaner,

I fly lots of inexpensive short segments (over 80 per year) and east/west flights that require 4 segments.

My experience is that the 30 segments in your example with, for example, Alaska will get you 15,000 miles and just barely MVP (their 1st level elite).

On the other hand, 5 United trips from Seattle to New York, Atlanta, D.C., Boston, and Orlando, gets only 20 segments, but amasses 25,000 status miles which would also qualify for Premier (UAL's 1st level elite status).

So the big difference is that flying 30 commuter flights takes a whole lot more effort. (May God shorten purgatory stays for frequent commuters, they have already been there.)

Usually exorbitant last minute fares are about as bad on one airline as on another, just like plan-ahead-fares are just about as good on one airline as another. As an employer, I am not going to quibble over a slight difference in fares ($100 or less) and will encourage my employees to select the airline of their choice. Happy employees are long-term employees.

If, however, the difference is HUGE say $450 for a last minute ticket to ORD on Southwest and $1,400 for the same ticket on United, then they will fly Southwest. They know I will find a way to make it up to them with by sharing my upgrades from time to time.

I work for a very small company (7 employees) and every dollar counts.

Our clients pay our travel costs. Many times I've been complimented on my diligence in getting an airfare below $250.

The trend appears to be towards offering bonuses for higher fare. I believe CO and AA are offering double miles for full fares. THAT is a smart way to do it.

------------------
"I will not be pushed, filed, stamped, indexed, briefed, debriefed or numbered. My life is my own."

I strongly support revenue based (rather than mileage based) perks in FF programs.

Consider this: you're in sales, and you bring in a single 1 million dollar sale, but another salesperson makes 20 10,000 sales. Who should get more commission?

Now consider this: you're an airline, and you have a passenger who buys a single $2,000 SFO-NYC ticket, and another who buy three $400 SFO-NYC tickets. Whom should you extend more perks to?

Re: revenue based perks make costs more difficult to control: is it really the airlines' reponsibility to design perk programs that help control costs?

dgolds- the analogy breaks down because of the wide variation in prices for the same airplane seat. And as the saying goes - if it aint broke dont fix it.

BTW I travel a lot on business, try to get the best possible ticket prices but often am forced to get last minute tickets.

Re: is it the airlines responsibility, it may not be entirely the airlines responsibility but it is certainly in their interest to do so. Otherwise they face a backlash, and more threat from upstarts.

[This message has been edited by pgupta011 (edited 07-11-1999).]

the one that brings me (beverage business: costumers = Restaurants) 20 smaller costumers gets the higher commission, yes my costs are higher, but my prices/margins also and I prefer the wider distribution (availability of my my products) and the smaller risks (of becoming dependent of that one costumer, of loosing somewhen 1 Mio turnover at once).

dgolds,

Consider this: I am an employer who has one employee who makes a $1,000,000 sale and one who makes 20 $10,000 sales. But the second employee can be relied upon to make his/her 20 $10,000 sales each and every month and the first employee may or may not make one or two $1,000,000 sales per year.

Of course, we will celebrate the $1,000,000 heartily when it happens. But, at the end of the day, which employee makes it possible for me to make the most realistic projections for my business.

Now if the first employee makes one $1,000,000 sale every month, then s/he is the Golden Sales God/ess and this whole discussion is moot because Mr/Madam Golden Sales God/ess already has all the stars in his/her crown and is sitting in the front of the plane.