MSNBC story

Seems they're saying that tighter award seats + less inflight service is eroding the perceived value of FF miles and programs, causing more passengers to focus only on price.

This seemed a little odd:

I'm a former gold-level or higher on both those airlines. CO seems to "get it" better than most on cabin service and not making penny ante cuts and pretending people won't notice, but much of that is negated by all the RJs they've introduced. And UA lately has had some good marketing and special offers, but in ATL their only "real" service is through ORD (RJs to IAD and hardly any SFO or DEN flights). I guess obstacles like that can erode the value of the programs, too.

Here is an extract from a NY Times Business Section on FF programs.

http://www.nytimes.com/2006/04/26/bu...leonhardt.html ((Free registration required at NY Times website))

""What Price Loyalty? Something Free:

.... MILES have become one of the most successful business ideas not just of the last quarter-century but in the modern history of capitalism. They have been a diabolically brilliant way to separate people from their money while making them feel as if they were instead getting a gift. Sure, you just spent $800 fixing your car, but you charged it to a credit card that awards miles, putting you that much closer to a free vacation.

If you believe the popular idea that a mile is worth about a cent, the 14 trillion unredeemed miles that travelers hold are more valuable than all of the United States currency in circulation, as The Economist magazine has noted.

....

"We figured if we were successful," Mr. Crandall [[former CEO of American Airlines and credited with creating the first airline FF Pgm]] told me this week, "we could replace S&H Green Stamps."

They have obviously done that, and then some. But the comparison also has a darker side. Green stamps, after all, aren't around anymore. They were the victim of their own inflationary spiral in the 1960's, when stores started awarding double and triple stamps, which cost them gobs of money.

....

They were another example of the notion that corporate America tends to drive every good idea into the ground like a tomato stake, as the writer James Grant has said about Wall Street. Now frequent-flier miles are following a similar path.

....

But I'd bet you wouldn't find the same premium today. Low-fare airlines are a lot bigger than they used to be, and they have their own frequent-flier programs. Corporate travel managers, meanwhile, can use software to force business travelers to choose the cheapest ticket.

....

And miles don't have the pull they once did, because they, too, have been swept up into an inflationary spiral. Hard-core travelers who once viewed upgrades to first class as an inalienable right now find them hard to come by because so many miles are sloshing around and planes are so full these days. Claiming free tickets on popular routes can also seem almost impossible.

Frequent-flier programs are not about to disappear, because no airline can afford to abandon them unilaterally. But compared with Mr. Crandall's original goal � to keep airline seats from becoming a commodity � the frequent-flier mile is looking pretty old and tired for a 25-year-old.

Just look at what United is doing to celebrate the 25th anniversary of its program. It is letting its best customers use their miles to buy Callaway Golf clubs, Coach sunglasses and Canon digital cameras. That turns frequent-flier miles into just another discount, rather than the guarantee of loyalty that Mr. Plaskett envisioned.""

### ### ###

We all need to reread our Economics 101 textbooks from college and see what happens when inflation hits ANY currency in ANY country over the last 1,000 years. That is starting to hit the FF miles programs. The basics are prices go up, up, up when more currency starts to chase less and less products. Just look at the AA program. Getting a base 25,000 award is virturually impossible, but a 40,000 mile award for the EXACT SAME seat is generally much more available. That is classic inflation.

Absolutely not true. With a little bit of flexibility there are lots of AA 25K awards floating around. In the last three years I've also been able to get regular economy awards to Bonaire (twice), Kona (Hawaii), San Jose (Costa Rica), and Boston. I've also been able to get two business class oneworld awards to Cairns (Australia).

Open your eyes and READ!

The EXACT same listing is NOT available under 25K requests. But IS available under 40K requests. That is inflation.

The flexibility you talk about is based on CHANGING your request.

Therefore my original statement is correct.

Take it easy Brandy.... We're all pals here.

That's not inflation, that's yield management.

Inflation would be if they started charging 30k for a 25k ticket (and for the record, 10-15 years ago that 25k ticket was 20k miles, that's inflation).

Remember, the point of FF programs was to "give away" seats that would go out empty anyway. The 40k award you're talking about is actually pulling a seat out of paid inventory.

"Starting to?"

Where have you been the last 25 years????

Um, that Boston flight was 25K. AA generally has plenty of 25K domestic awards when I check availability (again, some flexibility is called for). I have had great luck in claiming regular award travel internationally, and my experience is not unique.

If you are expecting to pull a regular award on a specific flight at a specific time on short notice then you are being unrealistic. The programs have never had that level of availability.

If you have some flexibility (even a little), there are plenty of 25K awards available! I don't think I've paid 40K for a domestic award yet!

True, I may not get the 2 PM flight - but chances are the 3 PM flight will be available!

Last year, I had to go to PDX, the 25K awards were not available in coach, but of course the 40K award in coach was! However, if I wanted to go O/W in F and the other in Y (which I did), I could get the "saver" award for a combined 35K - less than the 40K for coach! (And they were better times! ) And, this was less than a month out!

Just in February, I got 2 awards (for the minimum 60K) to Asia - with a stopover in NRT - for a trip in March! While I had to change the days by a couple of days, I still found the seats for the lower level a month away!

There's not an iota of new news or insight in either the inflation-erodes-value observation -- which is patently obvious -- or the standard-award availability discussion. This is a well-traveled track:

** Obviously miles are worth less than they used to be; I remember Pan Am domestic awards for 20,000 and Europe awards for 40,000. You can't flood the marketplace with cheap miles and not kick-start an inflation trend. This has been going on for years.

** Standard award availability is totally subjective, but the biggest squawks always seem to come from people who ask for two F seats to Hawaii tomorrow during the week before Christmas, can't get them, and pronounce the program fraudulent. OTOH, some programs have led people to believe they'll easily be able to fly to Rome in August for 50,000 miles when in fact it will usually take skill, planning and luck, so they have a marketing/expectations problem. FWIW, UA and AA standard availability is generally thought to be far better than on CO/NW/DL.