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The mileage programs are ineffective

The mileage programs are ineffective

Old Nov 7, 15, 4:06 am
  #1  
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The mileage programs are ineffective

They only target a part of the market regarding the actual frequent flyers. What about the whole market that doesn't fly that often but is (can be) still a loyal customer?

My mom doesn't care/know about all the point programs, yet if the airline would target her, they would benefit out of this.
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Old Nov 7, 15, 4:56 am
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I don't get what you mean.

You still can be loyal to an airline by just flying that airline and earn miles (if possible.
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Old Nov 7, 15, 6:16 am
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How often does your mom fly?

Nonfrequent travelers are loyal to cost. Airlines reach out to them with cheap fares.
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Old Nov 7, 15, 7:32 am
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People who don't fly often can still earn miles through credit cards.
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Old Nov 7, 15, 10:14 am
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The mileage programs are ineffective

Airlines don't actually care that much about loyalty, they care about profit. Obviously the two can be related, but not always.

If airlines were to target your mom, you claim they would benefit from it. I would ask what they can do to target the infrequent customer, aside from miles from flights and allowing them to earn more miles through credit cards. And depending on what you think they should do to target loyalty from your mom, how would they profit? Would the program's cost be more than the relatively small amount they make off of an occasional flyer?

Generally they don't make much off of a flight here and there. The occasional fliers they care about are those that pay for full fare premium cabins.
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Old Nov 7, 15, 7:51 pm
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Originally Posted by MTTH View Post
They only target a part of the market regarding the actual frequent flyers. What about the whole market that doesn't fly that often but is (can be) still a loyal customer?

My mom doesn't care/know about all the point programs, yet if the airline would target her, they would benefit out of this.
Yes, FF programs target frequent flyers, hence the name. An airline doesn't really care if a 2x/year flier is loyal to them. Taking an extra 10% of travel off a weekly, last-minute planning, road warrior is vastly more profitable than 100% of granny's 2x/yr, planned 8 months ahead, flights.

Your mom's loyalty has no value to the stock price. And given that the programs are the single most valuable component of most airlines, I challenge your assertion that they are ineffective.
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Old Nov 9, 15, 10:17 am
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They're effective for the airline even with infrequent flyers. Many infrequent flyers let their mile expire, so it costs the airline nothing, yet they got some promotion out of it. Buy if the infrequent flyers learn how to keep their miles from expiring by using partners, then the airline makes money selling miles to partners.
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Old Nov 9, 15, 2:17 pm
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Originally Posted by MileageAddict View Post
People who don't fly often can still earn miles through credit cards.
This doesn't hold for every country, in some countries creditcard programs rare or not available. When your homelandairline has a bad frequent flier program, then it's hard to collect sufficient miles.
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Old Nov 10, 15, 2:10 pm
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Originally Posted by MTTH View Post
They only target a part of the market regarding the actual frequent flyers. What about the whole market that doesn't fly that often but is (can be) still a loyal customer?

My mom doesn't care/know about all the point programs, yet if the airline would target her, they would benefit out of this.
For the whole game to work, it needs to be just attractive enough to influence behaviour, whether flying patterns or credit card usage, while being just hard enough to use miles that many people can't or won't use them correctly but aren't driven to completely give up.

If it was easy for "moms who don't care", then benefits would have to be cut even further back for those who actually fly more than once or twice a year or use the credit cards.
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Old Nov 10, 15, 3:18 pm
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The problem with mom is that she can't sole source her flight and pay an airline a premium price to obtain more frequent flyer miles at her company's expense. She just ain't kickbackworthy. Some say, however, that the airlines aren't corrupt by playing various versions of the old kickback game under the guise of having a revenue based frequent flyer program and giving preferential treatment to "special" flyers. As I recall, when the subject of kickbacks and corruption came up United CEO Jeff Smisek even went so far as to declare "I am not a crook" and got on TV with some speech about his dog, Checkers.

Originally Posted by MTTH View Post
They only target a part of the market regarding the actual frequent flyers. What about the whole market that doesn't fly that often but is (can be) still a loyal customer?

My mom doesn't care/know about all the point programs, yet if the airline would target her, they would benefit out of this.
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Old Nov 12, 15, 6:01 pm
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Witrh the changes with Delta and United, the programs look much MORE like a kickback arrangement for gaming the system with travel and picking them than they already did. Companies also will be suspicious that some employees might wait to book (i.e. company has to pay a higher fare) to boost the PQDs/MQDs, RDMs or upgrade chances.

But really the DL and UA changes were also motivated as a revenue play, i.e. we don't have as much competition anymore so we don't have to be as generous. Many of their biz travelers are hub captives, anyway. Those who travel infrequently (or even frequently) on low fares are figuring out that the rewards in RDMs aren't very much now.

The real puzzle is why the ULCCs haven't figured this out and don't have better programs. For the longest time the FF program was a competitive weapon used by the legacies against LCCs and ULCCs, but today the ULCCs could legitimately claim to be more rewarding and turn the tables. But Spirit only gives 50% flown at lowest level unless you're a cardholder, and the deep-discounted off-peak awards also are only for cardholders (this on an airline where many of the customers would be turned down if they applied). Mileage expiration is also way too aggressive.

With Frontier a mile flown is a mile earned, but awards are only slightly below the mile cost of legacies and expiration is also too aggressive.

It's also important to remember that FTers are atypical and that the average U.S. traveler either doesn't have a passport or uses it only for cruises or places like Cancun, and if you serve places like Orlando and Las Vegas (or have some way to get to Honolulu for a big-deal trip), that'll be enough for many non-FT people.
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Old Nov 22, 15, 11:11 pm
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I don't understand why airlines don't target families and their annual summer/winter vacations. I fly 1-2 year but were are a family of 3. If we spend 30-50k a year on gas, groceries, eating out, back to school with new laptops etc, that all gets translated to points. Even at the lowest 1x .01 value, that's $300 going to the airlines instead of amazon or best buy at the end of the year. Of course, if you dangle premium seats for a little more I might save them for a big trip.
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Old Nov 23, 15, 8:21 am
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Originally Posted by sigma6 View Post
I don't understand why airlines don't target families and their annual summer/winter vacations. I fly 1-2 year but were are a family of 3. If we spend 30-50k a year on gas, groceries, eating out, back to school with new laptops etc, that all gets translated to points. Even at the lowest 1x .01 value, that's $300 going to the airlines instead of amazon or best buy at the end of the year. Of course, if you dangle premium seats for a little more I might save them for a big trip.
Do you realize how hard it is to get 3 or more premium seats as "saver" awards on the same airline? The way most seat redemption algorithms at airline FFPs work, they're not often practical for families (they typically release one or maybe two seats at a time). So if the airlines marketed more to families, without there being award availability for families added, they'd have way more complaints.

The more people there are in a family, the more practical driving vacations are the less practical flying vacations are, even if you have miles.
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Old Nov 23, 15, 7:28 pm
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Originally Posted by sdsearch View Post
Do you realize how hard it is to get 3 or more premium seats as "saver" awards on the same airline? The way most seat redemption algorithms at airline FFPs work, they're not often practical for families (they typically release one or maybe two seats at a time). So if the airlines marketed more to families, without there being award availability for families added, they'd have way more complaints.

The more people there are in a family, the more practical driving vacations are the less practical flying vacations are, even if you have miles.
Yes I know awards are geared towards single flyers, mainly business flyers with expense accounts or tax write offs. If they flooded the planes with more awards I'm sure people would be more eager to spend their points/miles with an airline instead of the mall or direct cash out. I'm not familiar with loads but i'm sure if they wanted full planes especially in premium cabins, more award seats would help that.

For example, If a non-work travel family has 200k in points i'm sure they would to use that to supplement their summer vacation to Hawaii or Disneyworld. I doubt families can sustain awards year after year so there is no fear of cannibalizing paid fares.
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Old Nov 26, 15, 9:40 am
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Originally Posted by sigma6 View Post
Yes I know awards are geared towards single flyers, mainly business flyers with expense accounts or tax write offs. If they flooded the planes with more awards I'm sure people would be more eager to spend their points/miles with an airline instead of the mall or direct cash out. I'm not familiar with loads but i'm sure if they wanted full planes especially in premium cabins, more award seats would help that.

For example, If a non-work travel family has 200k in points i'm sure they would to use that to supplement their summer vacation to Hawaii or Disneyworld. I doubt families can sustain awards year after year so there is no fear of cannibalizing paid fares.
Except that making too much of that available cannibalizes the paid fares of someone else. Airlines have figured out how to manage capacity to keep lanes full, because at the capacities they have, there seems to always be someone else who wants or needs to fly, if you didn't. In a world where most seats can be sold, why should you expect a lot of award availability?
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