Excellent Point PremEx.

One thing I want to stress is that I agree that airlines get $$ for its elites. Although I pull the $168 rt sometimes, I do pull the $1400 Rt or $1800 RT. So there is a balance there. Also the occasional One way fares. I have also purchased 1st class on a full flight for $150 more or $300 more than another carrier. They do get my money as I am sure other elites do the same thing.

But I agree, the last minute tickets at $1500 should get a priority for the First class u/G vs the other 1K with a $340 ticket. I see it as fair. When I pay an "el cheapo" fare and get to ride in the front i am on cloud nine.. if I am in the back in the Exit Row.. I am happy

Fair is fine... but I agree they should not dilute the ranks more than is necessary to get additional revenue for the airline.

I don't know about other airlines, but CP always leave quite a bit of premium seats until last minute. If you do happen to buy a last minute full fare ticket, you will immediately jump to the top of the upgrade list within your level of elites. If you happen to be the top tier such as 1K or Exec. Plat, you will almost be guarantee a upgrade seat at the gate if there are any F or J seats left with your high tier and full fare ticket. No airlines is going to give away all their F or J seats for upgrade at the 72 hrs or 100 hrs mark, they ALWAYS leave some until the check in cutoff point.

Regards,
Empress

[This message has been edited by Empress (edited 12-02-1999).]

Right on, Premex! And I also want to congratulate you to your decision to drop Delta because they start selling their elite levels (AX black).

OK, Premex, I agree that if there was other ways of rewarding people who pay full fare, etc, that would work too. That happens periodically in those full fare double mile bonuses. I've earned about 20k extra miles this way by spending about three-four times as much as the average RT, so around $8000 more. Not a good deal IMHO. Most of these times I flew coach w/o any or slim chance to get into first.

I do think that a guy paying one full fare round trip should not get elite, or anything that low. But I am/would be somewhat upset if I flew 40 full fare short-hop non-stop roundtrips, let's say at about $600 a pop, spending $24,000 and getting on USAirways Preferred Plus. On the other hand, someone else flew the same 40 round-trips at an average discount fare of $200, plus five more. This person would be Chairman's Preferred after spending $1000 on the airline.

Now, if there was some other concrete benefit offered, I think everyone could be happy. But that's not the case. Given that, I think consideration should be given for the person who spent 24 times as much and only flew a handful of trips less.

My only point is that some consideration should be given to fare paid, but I think the ideal system should combine it with actual flight miles/segments, so if a high paying business passenger is close -- 10%? 15%? -- to an elite level they get bumped up.

I haven't reviewed TWA's or AA's elite for money programs, but if they are sufficiently high then that's fair too, but not as much as a combined system. In the end, it's probably just too complicated.

I paid $2200 R/T once to fly to Los Angeles coach. No upgrades possible even though first class was wide open. That just sucked, considering a few months down the road I flew the same route for $300 R/T and sat up front.

I care most about segment qualification personally; till this year USAirways did not even offer that. They changed it just in time for me since I would not have made the top tier otherwise.

BTW, I am using the example of the all full-fare traveller vs the all discounted fare traveller as an extreme example. Reality is obviously a mix. This year I flew 90% of my flights full fare. Next year I expect maybe about 40%.


[This message has been edited by dg1 (edited 12-02-1999).]

The airlines' marketing departments may say that frequent flier programs are designed to reward the loyalty of their customers, but the airline's financial results (which for those airlines which are publicly held American corporations is their highest fiduciary responsibility to their stockholders) are more closely aligned to the incremental revenue and profits they get from a customer's business than the customer's loyalty per se.

Consider for example, which of these two fliers should an airline "court" by structuring their FFP to give better benefits (but keeping in mind that the two different fliers may value different benefits differentially). Flier A is 100% loyal to the airline, never flies any other airline unless there is a gun pointed at his head, and spends $10,000 this year flying. Flier B is terribly disloyal, flies whichever airline is the most convenient for his schedule that week, sends a mere 25% of his business to said airline, but nevertheless spends $25,000 a year with them. (For purposes of this discussion, assume both Flyer A and Flyer B spend half their money on discount coach tickets and half on full-fare coach tickets.)

Who's more loyal? (Easy answer.) Who contributed more to the airline's bottom line this year. (Fairly easy answer.) Who's a more valuable customer for the airline to keep for the long-term? (Somewhat harder answer, I think.)

I think it was in a previous thread that somebody threw up their hands and said that it was clear there were two camps of posters, one for the airlines, one for the fliers. I don't think it's that simple. I may come off in this posting sounding like I'm in the camp for the airlines, but I'm of course in the camp of those looking out for their own best interests. But in the pursuit of my own best interests, it is to my advantage to better understand the motivations of the airlines. Not because I have to consider them an enemy (and therefore study them the better to defeat them in battle), but because if I better understand their motivations, I can better figure out how to advance my own interests in a way that least conflicts against their interests and therefore meets the least resistance from them.

Maybe that's getting too philosophical.

[This message has been edited by pshuang (edited 12-03-1999).]

My perspective: I NEVER fly full fare coach, much less full fare Business or First (except in Asia, where business class tix are under $400). Yet I was personally responsible for about $35,000 in revenue for UA this year.

My opinion: The airlines DO reward folks who buy expensive tickets. Whether its double or triple mile offers on Y tickets, priority in upgrading or other perks, those folks are rewarded for their (in my opinion) reckless coach spending. And if they are buying Business or coach tickets, well then they're ALREADY flying Business or first, aren't they?

But if UA were to change their policy to what AA and BA apparently do, I would walk, and take my $35,000 or so a year (every year) to someone who doesn't do that.

Now you financial wizzes tell which you would rather have: A loyal customer who you can pretty much count on for $35,000 a year -- year after year after year no matter how his travels change because loyalty, not convenience is his motivating factor? Or a customer who spends $60,000 one year, then $5,000 the next because their destinations change and convenience is more important than price?

I dunno about YOUR industry, but everywhere I have worked, the best kind of revenue is recurring revenue

I really think UA has it right: reward LOYALTY. Thank the big spenders with perks and bonuses, but not necessarily at the expense of the loyal...

And if it ain't broke.....

[This message has been edited by kokonutz (edited 12-03-1999).]

I agree with the loyalty side. However, there is merit to the $$ paid argument which I think all agree on to some extent. The problem with the $$ paid argument is that this person may not be very loyal and the airlines want to reward loyalty.

Now having said that perhaps some sort of reward similar to what the Vegas casino/hotels do for their big spenders. This might be identifying people who spend a lot of money on air travel with any airline. Then an airline might provide special invitations with perks (not elite status)to entice those people to spend their money on that airline. Just a quick thought off the top of my head.

Very good and reasonable discussion. Is it helpful to note that the programs are designed to benefit the airlines first and foremost and the members secondarily? PremEx makes a very strong case, endorsed by others like Jeff, one that is very difficult to refute if the premise set forth above is correct. This vote is with PremEx.

In my opinion, the airlines have to reward both those who spend a lot of money, at high prices, and those who will fly the same airline, "unless a gun is put to their head". I am one of these. I fly CO 95% on pleasure, yet always manage to get to the highest status (Platinum), despite the fact, that by flying the specials, I NEVER spend more that $3,000-$3,500 per year. Am I more valuable than someone who spends $35,000 a year, or who spends $1,600 like my wife did yesterday to fly EWR-SAT on business? Probably not, but I am a good, loyal customer who can be counted on to fill the empty seats 10-20 times a year, both domestically and internationally, year after year. This is loyalty and should be rewarded. Since the airlines set the rules and say that I should be Platinum if I fly 75,000 miles, I am simply playing by their rules and receivng the rewards they have determined to be appropriate.
I do think, that there should be something, over and above regualar FF benefits that only someone spending over say $35-50,000 per year should receive. Perhaps this could be international perks, or whatever creative ideas a marketing department can develop.
The airlines need to satisify both camps since its the $35,000 flyer that brings in the most revenue, but the loyal FFers like me that fill the seats.

Wait just a gosh darn second here! I really thought that $35,000 for 104,000 miles was being thrifty as heck! Now you're telling me that people make elite on $3,000 per year. Geez, maybe I AM flying the wrong airline.....

Vulcan...if you're making Platinum every year for $3-4K in tickets, you should hold a seminar for all of us.

We must be doing something wrong.

Welcome to the world of:

cheap TA coach/economy rt travel - $300 ticket= 10k miles to/from NYC-Europe

cheap TP coach/economy rt travel - $750 ticket= nearly 20k miles to/from NYC-Asia

vs.

cheap TC travel in rt coach/economy - $250 ticket = only 5k miles to/from NYC-CAL

Just do the math! Platinum is accessible for very little if you truly want it!

kokoNUTZ is the name you chose..., but seriously, if you work the e-fares nowadays, status does come failry cheaply. take that $35K and you can probably get status on EVERY us based airline if you like.

I take offense at full fare coach being called reckless spending. In a fortress hub, I am only offered full fare coach fares if I don't stay over a Saturday night. Doesn't matter if it's 1 hour, 1 week or 1 year in advance. There is no choice here unless you want to lose a good portion of your weekend for your job's benefit. I like my job but not that much.

On top of that, on a few full fare coach tickets I've changed my flights a dozen times making them worth it in the saved change fees, and it's nice to be able to refund them easily (I've done that about a dozen times too).

So for some people in some places full fare coach is the only viable option. Just my $.02

dg1, I agree. I do a) last minute travel, b) change my itinerary constantly c) don't know where I'll be tmrw, and d) want the highest status which I get when I spend money on full coach fares. I never stay Sat night, and don't want to screw with restricted fares. I've been there, done that, and find it a real drag.

I believe that all things being equal I should have priority if I am Platinum and have spent $2K for a coach r/t ticket vs someone who has spent $300, even if he/she is Platinum also. And I think this just makes business sense.