When will the Bubble burst?
 

I like most people on this forum consider myself to be a saavy and astute traveler. I like many people on this forum am a mileage junkie. Seems we never have enough and always want more. I have not as many as some, but many more than most and yet the game goes on.
In this day and age of too many miles chasing too few available Award Seats on flights it has become frustrating for many to be successful in using their miles. Most airlines are struggling at best and some have questionable futures. Yet the quest for more miles goes on.
Airlines are striving to figure a way to survive in this new age of flying, but yet all the major Airlines and Credit Card Companies continue to woo the masses with more Mileage advertisiments in promoting their particular Airline or Credit Card.
Seems to me like the Airlines have a tiger by the tail and can't hang on and can't let go. On the one hand, they have to keep their programs in tack in some fashion, while on the other they continue to encourage it to grow bigger, and have even more miles chase the same seats. Seems that in their endeavors to develope a mileage program, they may inadvertently and by accident create one of the biggest Ponzi programs on record.
Credit Card companies of course like to promote their product for the interest income and the service fees from the particiating merechants. Airlines of course enjoy to receive the cash that is generated to them by the Credit Card Companies when someone transfers miles into the Airline FF program.
Where will it all end. Will the Bubble eventually burst?

See also Monetarism, Point Inflation, and the Coming Devaluation and the recent Mileage "retirement account".

I agree and I do not agree. Allow me to state my reasons. The key is not earning of miles, the key is the redemption of miles/points. Mileage junkies like you and me and other Gurus on this FT board have figured out the ins and out of the system.

The airlines/credit card companies and other creators of this currency know that all their customers are not that savvy in redemption of these points. That is why they are betting that the bubble will not burst.

You see most people will not try to cash an award till they have reached the 25K miles and then they realize that they neeed 35K miles because their is no availability. How many times you have seen a post from newbies thinking they need only 2000 or 3000 miles to get an award. I wonder how many of those people were able to redeem.

I have a simple rule. I want to redeem as many miles as soon as possible. I get nervous if my mileage balances grow faster than my redemption.

Here is an example of the mileage bubble. RT flight from PHL-TUS $227 on CO earns 227 miles on AMEX MR and apx 5500 onepass miles. The 5000 miles are worth about $150 for an AMTRAK 1 zone NE corridor unreserved redemption. I would redeem 5 of those redemptions before trying for an airline redemption on CO/DL/NW. the reason is simple. The air ticket redemption is worth $400 to me ( 1.6 cents/mile). The Amtrak route is worth $750 to me. Besides, I can redeem everytime I have 5000 miles. I sometimes wonder how many people outside of FT know about it.

So either one get the PHL-TUS trip for $75 and paid the $150 for the AMTRAK ticket. Or the Amtrak ticket was free for every PHL-TUS trip! Either way, the genie is out of the bag. If more people (ab)used the system as every good FTer then the bubble might burst! Otherwise, we will go on as any other ecosystem, blind leading the blind!

Bubble??, what bubble????
 

The NonePass®-Amtrak conversion is just too good to be true, I just did a long distance choo-choo trip, 5 days and nights, deluxe sleeper, including meals for me & my squeezer (good thing it don't include booze) for 40K miles/points.

For about the milage I get from four cheapo transcons (less then $900) yielded an amtrak ticket that would have cost $2,900!! :)

I just gotta hope that the bubble don't burst before I burn some more of them NonePass® miles.

[QUOTE= Last edited by snake : Today at 3:43 am. Reason: posting while drunk QUOTE]

:D :D :D

For me it's starting to unravel. Have been earned gold or higher on one airline or another since 1992, but this year I may well only go silver. Unredeemed miles peaked around 400K in 2001 but are down to around 120K now. Have been burning faster than I earn.

Part of it is fatigue with all the security measures and other additional hassles of recent years. Part is over-familiarity with some of the domestic mileage-run targets. Part is irritation with excessive taxes and fees on airline tickets, rental cars and hotels; these tend to discourage the more frequent short-haul mileage runs/getaway weekends in favor of longer hauls.

But the airlines really get the brunt of the blame. Too many takebacks, too many new fees, not flying up front enough, uncertainty over bankruptcy and, with UA, problems with online booking and bad sale fare availability. Also too many RJs, taking upgrades out of the picture. The value of both the elite status and the FF programs continues to get chipped away at, as travelers get nickel-and-dimed to death. It's all playing into the hands of the LCCs, who continue to gain market share.

the circle of life... and miles death?
 

Herein lies the reason why you may often see the Marathon Man endorsing the use of any scam, scheme or tricky-dick dealio to make it easier for us customers to both obtain and redeem miles! This is the exact reason why I hate marketing managers sometimes. They try to rope you in with deals they KNOW you cannot complete and when you do, they screw them up so nothing posts on time, and if you get past that gauntlet, they either change the program or tell you it wasnt intended to be used in this way and all that crap. If you figure even more out, you are hated by them and no loyalty is given anyway! (Consider our use of gift cards and how this altered things) I mean, the marketing managers are geniuses, but in doing this stuff to the fellow person to the degree in which mile-offering companies seem to push it beyond the limits that any other entity does these days is so bad, ya know?

To legally dupe, mislead, and rip the masses off while saying, "well, that's business" allll the freakin' time is soooo....

It's so: "current-administration-that-really-needs-to-change!" of them all! Anyone get me here?... The attitude of this sort of thing is standard now, and it's growing. It comes from the top and trickles down. It is affecting customer service and it is affecting miles and promotions. It's like OK for companies to not follow through on the fine print terms and screw their own customers over knowing we'll come back for more next time! Everything is like a rebate scam.

Anyway, I figure the only way out of the mess one often finds themselves in when holding a bunch of these miles is to (A) be very very savvy and know the system (and write tons of complaint letters), and (B) to be as agressive and down right wrong right back at them! As I said, I have no boundaries when it comes to miles and the dealings with whichever company at which I gain or redeem them. It's not like stock market schemes where real money is involved--yet (but I did recently receive a frequent flier excise tax in Sprint after getting 5,000 United miles! That was $5.40cents! wow... it's COMING!)

The only program we all use here that I respect and choose not to screw with is Starwood! And they dont screw most people like me either. That's because they actually allow customers to ALWAYS use the points. Their points have VALUE. They respect this. If a room is available in the place, you can pay for it or use points. You have a choice. You have to knows some things but it is much easier to ramp up and do this. Not true for the airlines and most other programs I know of or participate in. I have redeemed but what a crock it can be, huh? Everyone else has lottery-like restrictions that are borderline fraud, in my mind!

I see it this way: if it all crashes, it will be because these companies start breaking some serious laws that affect those who make them. We are almost there, mates! be forewarned and cash in now. When I earn, I burn.(And yet, little old me only has certain cards and programs right now so I am slowly working on it but cannot even do what I preach just yet... yet.)

:mad: MM

I replied to a thread in the AA forum to a post where someone had said that he had been having trouble upgrading while traveling through AA hubs and that AA should put more seats "up front", the way TWA had done.

I responded that maybe that was one reason why TWA went bankrupt.

I got some responses disagreeing with me A LOT..!!

I have come to the conclusion that many members of ff programs, elite flyers especially, are in denial when it comes to airline economics.

In the near term, I agree that the frequent flier programs are cash generators for airlines.

Airlines make money off of their frequent flier programs by selling miles to other companies (car rental, hotel, phone, internet, etc, etc). So it is a positive cash flow for airlines.

But--normally, when a company sells a product--it has incurred its production costs to sell their product to you before you buy it--and usually the company has no further obligation to you except in a warranty.

But airlines are selling miles that for the most part are to be redeemed for future air travel. They may have had some sales cost associated with selling miles to other companies, but the biggest part of their liability to the ultimate consumer of those miles is off in the future somewhere.

I saw today the "deal" where people can use different kinds of stored value cards and earn points by "charging up" their stored value cards with a point earning credit card. I calculated from the one program using a Citi AA card can earn miles at a cost of 0.3 cents or 3 tenths of cent each.

Now that there are like 9 trillion miles out there in frequent flier accounts. When does the concept of inflation hit frequent flier programs?

It has got to sooner or later--if someone is getting 3 ff miles for 1 penny and it takes 90,000 miles to get a business class seat to Europe, then $300 will get you a seat to Europe which AA would sell for $3900--.

The airlines are selling miles and incurring a future liability where the airline can arbitrarily modify the value of the points it has already sold.

IMHO--the big awakening will occur when one of the major carriers goes under and their ff program is not picked up by another airline. Then all of the hoarded miles become worthless--or even worse--

What if in the US situation, a shutdown occurs and the alliance carriers refuse to fully honor all the award tickets that are now or have been booked in the past few months for travel next year by all those mile hoarding US Dividend Miles members?

It will be the first time a major airline ff program will default on its ff benefits and promises.

Once people start to see that the benefits of those ff miles are not guaranteed ---or they get a dose of severe devaluation when the airlines increase the mileage requirement for a trip or severely restrict the available supply of award seats--it will be like the banking crisis in 1933--a rush to redeem---

I can't help comparing frequent flier miles to S&H Green Stamps. Perhaps I am wrong--but whatever issues caused Green Stamps to fade away will also eventually happen to ff miles.

Being able to accumulate miles such that you can get an award seat for less than 1/10 th of the cost of what you could buy it for without ever stepping on an airplane until you cash in for an award tells me something "ain't" right.....

If you want to see the "head in the sand" mentality of frequent fliers--take a look at the AA forum over the next couple of days.

Rumors are out that AA is going to institute some type of "co-payment" in order to upgrade from the back of the bus....er, umm---I mean plane..

If you ever wanted to see an example of the entitlement class--you'll see it there....

They're baaack!!!!!
 

"S&H greenpoints is the digital reincarnation of S&H Green Stamps"

It just ain't the same, "no more licking and sticking" :D

I have seen them. They have lousy shopping partners--and the one thing that I do shop for regularly--food--I don't live near one of their limited list of grocery stores.

Used to be you could go around the corner of just about any city in the country and buy groceries and get green stamps.

Now you have to go online and buy a computer part or a television...!

Didn't that used to be the kind of stuff you would turn in your books of green stamps to get as a prize...?.... :D

a run on the bank + more of my far fetched theories...
 

WHEN US Air goes under (not if) I will be ready! I plan to be for all these FFPs. We unloaded all our US Air miles seeing as how we have United accts. Not that they are A list or anything, but at least they plan to stick around a little longer. Only my mother has 24,506 miles on the defunct carrier right now and I seriously believe US Airways is going to die out soon (check today's WSJ to see more--it's front page again). Anyway, we are doing some dining for miles for her this week and soon she will have 25k. With that, we have a free ticket to someplace soon. That's gonna be one ticket reservation we can make on a United plane and if US Air goes under, UAL will honor it because we will have the E ticket and UAL ref code, etc. Of course, if wanted to make any changes they could not be done, whereas if US Air is still alive by the time we fly, these would be possible for std. fees. We shall see. But the point of this is for us to redeem and be poised to redeem at all times.

I try to keep myself poised just in case... My AA is growing because I have the citi AAdvantage card. Stored valued cards worked nicely for me and yet, even without them, I know the miles can be converted to HHilton points if the Sh** hits the fan. And I suspect that even if programs start to disappear, hotel ones would be at least among the last ones to do so. We have lots of other miles in the family but they are poised and ready… If these programs start to go away, which I think they are slowly doing, then we will be set to redeem. Again, I am trying to be positioned to burn ‘em immediately! You all should too, whether you have 25k, 50k or 500,000k.

Get yourself positioned to redeem on the drop of a dime! That's the key. Know the routes and possible places you can fly and be ready. The times, they are a changin'...
All of this great change/phase out stuff these airlines are doing reminds me of the way things changed on college campuses in the 1980s, when I was at UMASS. Things drastically changed in terms of drinking alcohol. Now that is very different from miles but remember, this is about taking away things people want because they enjoy it too much! Towns, states and schools successfully worked in conjunction and their efforts slowly changed policies and rules across the board. Their cooperation was enormous and relentless. Even the varying drinking ages and DWI legalities in many states and in many colleges changed rapidly so that in the course of a few years, the freshmen coming in could not even fathom that there were once keg parties in the dorms on their floors or in many school apartments off campus. People that used to throw these parties were now on the staff of officials set out to bust you for having one! And yet, we all used to enjoy them regularly. One really arcane policy was enacted in the town of my school in those days whereas if a party that was happening on your lawn were to spill into the street, you could be arrested for drinking on town property. I saw a student trip off the curb onto the sidewalk for a split second at one party and because he had a beer in his hand, the police, who were now watching every move at every party promptly hauled him away. He was 21 but still got fined. The house renter, who was a student also, got a big fine as well and to me, that is ultra-conservative thinking and way too sick for my blood! Needless to say, people started to want to have such parties less and less over time. The plan worked... for everyone but the students. And now, in my opinion, kids who should have learned the rules of life and how to combat mistakes and setbacks while in college--where you need to figure out how to make choices when you are young-- are now making these mistakes in the corporate world and in their family life. This is a whole other topic but my point is that the watchdog mentality of restriction and policy changes that took away freedoms of enjoyment made us less able to grow and live life. Now, with ebay police watching your award sales, corporate rebate scams on the rise and partnership screw ups that post your points too late or make you purchase 1,000 miles for $30+ because your account is short 1 mile when you want to redeem, we have fee-heavy bitter companies that do not want us to enjoy travel and the freedom of living our lives as we choose to. So many choose to bail out before even redeeming these miles. Many choose to not travel as much. Things go DOWN. I am responsible for my own actions but I am being forced to pay as though I had hired someone else to take care of things even though I don’t want them too. It downright stinks.

Similar to the shameful end of such events enjoyed by the masses, existing mileage programs with liberal ways of both earning and burning are slowly becoming a thing of the past. At least the redemption part is getting harder and harder to enjoy and some equate this to a scam! They lure you in with promises, and if you partake, you are done! Sure, it's my choice to obtain the miles or to buy a beer, but there is really something wrong here. Even responsible users are feeling the crunch and it's not just because of a bunch of bad guys. We are all considered bad guys because we actually have the nerve to contact an airline to--gasp--try to redeem out points!

Because of this, the airlines and other official industry factions are creating exactly what they planned in the grand design of things: They are making us, the consumer feel the pain of "imbibing" and participating in any of the very same mileage-earning programs they actually came up with! Sure, the lure is easy, but just like stumbling onto the street of a no drinking zone recently designated in your local college town, we are feeling the crackdown at every turn. I am certain the programs will go away eventually and the sick rules about redemptions and fees are a clear sign of it. Stop us from using those miles is the only way for the creators to survive. That, or liquidate and set off a whole chain of events that could crumble the foundation of all things "free."

Let's hope we have a bit more time to plan out the funeral than we did with say, United breaking its partnership redemption ties with Hilton. I recall frantically transferring miles at 11pm one night to get them in on time. Let's get out of town and fast--and that means get on a plane and fly now! Party's almost over, man!

;) MM

Continental to Amtrak
 

How did you do this? Just talked to CO and they claim there's no agreement with Amtrak and I've got a ton of miles to burn. Appreciate your help

knowing little about whether it works both ways, you should check this thread entitled - Does CO->Amtrak->UA really work? - in the MilesBuzz! forum

This thread is located at:
http://www.flyertalk.com/forum/showt...0&goto=newpost

We don't call it NonePass® for nothin'
 

Typical clueless Continental phone agent. :rolleyes:

This is a key point. There are no real costs to speak of until you redeem you miles, and who knows if that will actually happen. Until then, the obligation shows up as a liability.

There's no inherent reason why you couldn't make a good business out of this if you were conservative, but the financial pressure to undervalue the accumulated FF miles (the liability) must be tremendous.