They may have points, but very few are lucrative.

It would be even more foolish to use them just for the sake of using them. It's taking me years to use up my miles because I just don't fly as often as I used to, but I would be foolish to use them just to get some fake value for a trip I don't want or need to take.

Was the question "will frequent flyer programs remain as lucrative as they are today" or was it "will frequent flyer programs end?" My answer, using the example of Green Stamps that was quoted above, is that no they won't as a whole, though individual programs may end. If you'd like to discuss whether they will remain lucrative I'm all for that discussion too.

The original post said, "Reward programs may not totally end, but they will ever change to a point we may say, what is the point?"
So, I like your question better, "will frequent flyer programs remain as lucrative as they are today". Or it could be asked, "will the frequent flyer programs continue to lose their value to a frequent flyer?

But one can also ask (if not believing that the Fed has ended inflation for all time): "will the US dollar remain as highly valued as it is today?" or "will the US Dollar continue to lose its value to its holders"?

Ie, devaluation isn't limited to travel programs. Hopefully it's slow in the case of the US Dollar, and there ways to invest to hopefully offset that rate of inflation, but there are countries in the world where the local currency devalues way faster than the average frequent flyer program. I was just in Argentina recently for the eclipse and noticed how much ARS has devalued since my last visit there just a few years ago. I just looked it up online and it says their inflation rate is expected to slow to 34 percent this year. But how many FFPs lose value at the rate of 34 percent a year?

So perhaps a bit of perspective is needed.

I think what we can expect is the Big 3 US and most of the major world airlines to eventually resemble the SWA model: dynamic pricing with a fixed, very limited ratio to cash. This works for the vast majority of flyers, as they use points for domestic (or equivalent) economy flights; in the short term these flights are dirt cheap and miles go a long way. The DL model of extremely limited premium sales will probably spread to those same carriers as well, and to economy flyers our complaining about loss of access to the front of the plane will be just so much whinging.

Now once domestic fares rise again and those miles don't do much (and, like today, can barely be earned by BIS), it will be much more interesting to see how FFPs adapt. If flying 5x a year earns someone all of 9K miles, and all that does is knock $120 off of a $600 ticket, what do they do to change the program? Do they finally completely abandon the randoms and purely go for frequent and high dollar passengers for any and all perks (a la Marriott)? Or do they start providing a useful floor for redemptions?

https://www.flyertalk.com/forum/30628591-post14.html

2010: https://www.flyertalk.com/forum/mile...-thoughts.html

2009: https://www.flyertalk.com/forum/mile...od-credit.html

2008: https://www.flyertalk.com/forum/mile...-programs.html

2007: https://www.flyertalk.com/forum/mile...-end-near.html

2004: https://www.flyertalk.com/forum/mile...lyer-boom.html

Excellent research. So they're not dead yet

No.

Remember, the entities we know as "airlines" are primarily credit card marketing firms that happen to operate aircraft as a means of connecting customers to credit cards. While the pesky expensive flying machines are a necessary cost, it's really the FFP that holds the whole thing together and makes the primary product, the credit card, so appealing to many. The FFP is a huge profit center, even in years when the airplanes are losing money.

The real question will be whether any FFP will wholly outlast its underlying airline. Some would argue that's already kind of happened with some of the airline mergers. But it's not that farfetched to think that an airline could go Chapter 7, but somebody buys the FFP asset and continues to monetize it because of credit cards, albeit with a new rewards chart.

A potential silver lining here is that the credit cards may be one thing that prevents the programs from all going to the pure-rebate model the way Southwest has. (Perhaps not a coincidence, WN is the one that has made money for decades on the core flying business. Of course WN also has credit cards, but it does not need them to survive.) There is a lot of marketing capital in the elusive aspirational awards, even though the general public often doesn't know how to best redeem them.

The airlines will always offer an incentive for customers to be "loyal". However, the programs will get smarter, stingier, and more focused. It will become increasingly difficult to game the system. Also, the relative value of these programs changes. The upwardly mobile (pardon the pun) who are early in their careers likely get great value out of them. Those who are further along in a successful career receive less perceived value. Those are actually the customers airlines want to attract so they will offer rewards, sometimes lucrative ones.

Joe Cortez’ FlyerTalk article, “No One Cares About Loyalty Programs Anymore?” Illustrates the dying aspect of FFP. No one cares? Or is it that only a few care? if it’s only a few then it’s an older generation. If so, then it will fade with them.

That article misses the point that if you factor out counting cash-back-only credit cards and store-specific programs as loyalty programs, and only count travel-specific loyalty programs, most people in America never cared that much about loyalty programs. Ie, any statistic about loyalty programs done outside the travel industry counts everything from Green Stamps on, and are not specific to travel loyalty programs. They're mostly things like cashback credit cards, store programs for earning store points, etc, etc.

And since when is it news that no one cares about Green Stamps (or attempts to replace them) anymore??? :confused:

Meanwhile, there are many many aspects of FFPs, and some fade as others arise. Many years ago, most people earned airline miles by actually flying. But then airline credit cards proliferated around the same time that airline miles from flying cheap fares were severely cut back, and earning airline miles by actually flying stared "dying", but earning airline miles from on-the-ground sources grew.

So it's difficult to tell whether FFPs are "dying" when the activity within the FFP world keeps moving around so much.

Finally, there are some people who would revel in FFP programs "dying" just enough for most other people to drop out, leaving perhaps more seat availability for those remaining. Ie, if FFP programs are "thriving", is that always a good thing? :confused:

From The Times of London:

Ban air miles and stop frequent flyers, urge climate advisers

Air miles schemes should be banned because they encourage excessive flying, according to a report commissioned by the government’s climate change advisers.

The ban would affect millions of customers of British Airways, Virgin Atlantic and other airlines that have loyalty programmes. The report by Imperial College London for the Committee on Climate Change says that frequent flyers, who earn the most air miles, should be targeted as the government seeks to meet its emissions reduction targets.

It recommends “regulation to ban frequent flyer reward schemes that stimulate demand”. There are more than 220 frequent flyer schemes worldwide, with an estimated membership in excess of 200 million. A survey in 2017 found that 15 per cent of 30 to 59-year-olds in Britain were signed up to at least one frequent flyer programme.

The report says there is evidence that frequent flyer loyalty schemes are particularly damaging because they can result in people taking extra flights to “maintain their privileged traveller status”. It says that some people undertake “mileage runs” or “status runs” for the sole purpose of ensuring that they retain higher-tier membership of a scheme, and that some frequent flyers regard membership as being “related to status and social identity”.

More: https://www.thetimes.co.uk/article/b...sers-522gdkdwn

As I noted elsewhere, without this on a broad scale, unless there's a coordinated arrangement the main achievement of such a ban would be to either put a bullet in the heads of VS and BA [1] or significantly damage the status of LHR as a major connecting airport (and indeed potentially push some airlines to not directly operate to/from the UK) [2].

[1] If applied to UK airlines but not international carriers)
[2] If applied to flights to/from the UK regardless of carrier and not joined in on by other countries; ironically, this might save VS/BA from some of the damage from the first situation if the UK tries a "US smoking ban" approach: The odds of AA/DL/UA ditching their programs in the face of AA not generally being profitable without theirs and with WN utterly unaffected are basically zero; DL and AA could just pull out of London in favor of letting VS/BA deal with the whole mess (who knows what UA/*A would do).

Already being discussed ad nauseum in another thread: https://www.flyertalk.com/forum/mile...air-miles.html