What is the future of frequent flyer miles? Or: what is the next major innovation ahead?

Ever since AA created the frequent flyer miles, which have had the impact we know, I feel there really has not been a significant improvement or modification of the basic concept.

It's time.

As we all watch our mileage accounts grow fatter and fatter, and worry about passing our balances to our descendants (yeah right), can we use our brain to guess or propose what the next revolution will be? I mean, if I were at the helm of one of those airline companies, this is what I would be thinking about.

What would you suggest?

- Mileage accounts that accrue interest (after all, miles are a form of currency)?
- Miles one can use on ANY airline (at the rate things are going, we'll soon be left with one global airline anyway)?
-Will miles be replaced by something else?
-If and once miles become taxable, will there be MILES ROTH-IRAs for our old age travels?

WHAT?

Can we put our thinking hats on and build a vision of things to come?



[This message has been edited by Droneklax (edited 07-14-2000).]

I'm shamefully bringing this to the top because I cannot believe that we are so short of ideas....
I know we can think outside the box!!!

Frequent flyer programs are designed to increase repeat business for airlines. A universal frequent flyer program would defeat the purpose.

Randy and others have referred to FF miles as the "new currency". What if FF programs allowed you to redeem miles for a wide range of non-travel items (like the Diners Club catalog)? Since you can already earn miles without traveling, airlines and their FF programs would then truly become brokers, adjusting their redemption values so that they could make a commission on the difference between awards and redemptions.

JerryFF: LH's miles&more program does offer a broad catalogue of goods you can 'buy' with miles (it is a large catalogue).

Thanks for the info. I guess my suggestion wasn't very novel after all.

Perhaps with the consolidation of airlines, FF miles will go the way of the dinosaur.

I see no reason for Air Canada/Canadian to have a program now that they are the dominant force in the Canadian marketplace.....except to show politicians that they need an FF program to keep the "perception" of marketplace competitiveness alive.

Example: I fly from YYC to SDU 4 times a year. Average ticket price is $1,250....therefore $3,750 of revenue is generated and I receive my fourth flight "free" from the airline's FF program.

In reality it's an average cost of $937.50 per flight ($ 3,750 divided by 4 flights).

Wouldn't cheaper flights benefit everyone and put more butts in seats ?

Frankly I am all for the termination of mileage programs in return for lower fares for all of those who are not FF'ers.

Ohhhh wait....I forgot...logic and airline pricing are complete misnomers. Sorry guys....I got carried away here

It all depends on from whose point of view one is doing the "visioning".

From the airlines' point of view: as total miles continue to accumulate, seat liability will have to be limited... i.e. reduced. There will almost certainly be an increase in the two ways of accomplishing this: (1)more "non-flight" options for spending miles. This will help eat up the additional miles being earned by "non flight" spending.
(2) Continued watering down of the awards.. i.e., "award inflation", the raising of mileage requirements for more popular awards.

From the flyers' point of view, there will be increased pressure to: (1) make miles convertible, for instance from airline to hotel programs, or from one airline to a partner airline- as in airline alliances; (2) to extend the validity of miles... this is already well along; (3) to make the miles valid for more non-travel options... this corresponds to the airlines' vision, so is quite likely to happen.

I'm not so sure that more "non flight" options for ff miles are in the cards. The airlines cost for redeeming flight awards seems to be near zero since awards go mostly for otherwise unused seats. Hotel, car rental, etc awards would cost them.

This is easy.

As the liabilities of billions and (soon-to-be) trillions of FF miles continue to build faster than they are being used, the airlines will simply inflate/restrict them away. We're already seeing ridiculously few seats available on popular routes and fares that are non-upgradable.

Being able to transfer them for non-airline awards will still be possible like it is today, but it allows you to see what the true value of a mile is - and it's not much at all, less than a penny.

I could buy the "2 cent per mile" argument if you could actually redeem them 100% of the time, like you can the non-airline awards which have much fewer restrictions. Imagine trying to redeem a coupon at the store and being told that too many people have been saving money so YOU have to pay full price.

AA does have both hotel awards and car rental awards. Also, with the new AolAAdvantage program you will be able to combine AOL rewards points and AA ff miles (at some future point)