Every "smart" business traveler I know chooses their flights based on FF programs. Many, myself included, have actually made their clients aware as to the airlines on which they prefer to fly. Let's face the facts: the business traveler, by paying last minute, exorbitant rates, basically subsidize the cheap seats in the back of the plane and the airlines are smart enough to realize this. Rewarding the frequent business traveler with a (no longer) free ticket on a plane, with seats which would probably, otherwise, go out empty is one of the most logical things I have seen any airline do.

I truly pity you. I have been on the phone with USAirways for the past hour - still on hold - trying to get to the right person to pay for an award ticket. It has literally been he!l. Just got disconnected and to call again. Absoutely horrendous. Fortunately I am only flying US one of five legs of this ticket. I don't think I could handle any more.

Loyalty programs make money
 

People seems to be addicted to points (me too!) so why would airlines be any different? If you save 5$ at a drug store on points why would you not want to save hundreds or thousands for an airline ticket?

Plus they make gobs of cash off us...

http://www.cbc.ca/news/background/loyalty-programs/

Really? Every "smart" business traveler I know chooses their flights based on which carrier gets them home the quickest.

According to AA it only costs them $10 for a mile ticket
 

Did anyone see the AA Cnbc show about the AA airlines?
It says it only cost them $10 when a customer cashes in a mileage ticket. He said it is very profitable for AA to keep the mileage programs and the credit card mileage.

I fly exclusively *A from SZG because I don´t have another choice.

I collect miles on NWA because they fly direct from BOS-AMS where we have family. We can plan to earn and save for future trips but this is going to be harder...

1) they are going to turn into Delta and everyone is worried about what will be

2) the kids wont be under 2years old much longer and then I will need to get more tix.

Will have to still go and will have to pay $ at times, I am certain.

I fly AA because if you need to go from BOS to an island, they usually have the flights using $30-35-60k miles. If it's 60k, you are mostly in Business class.

I fly UA if I am going to another big group ski trip once a year to someplace out west. This 25k econ trip is usually availableif booked well in advance and all of us going know of this.

I just have a rule that I NEVER fly thru Chicago in winter (I don't have any business there) EVER.

These trips, and these carriers have served me well enough in terms of how I use them. If the game all changed and say, UA started flying direct to AMS from BOS, I would retool my earnings and savings accordingly.

However, if the rules, fees and restrictions made all of this less desirable an way to hard to obtain, I would probably alter my planning and travel less frequently in all above cases. We could still visit family, but I would be more able to use the "kids are in school so we cant go" excuse.

In short, my planning is based on a combination of needs and internal rules. I generally pick my carreirs based on how I can most easily earn miles on the ones that get me to where I want to go with the best type of connection. Even if I did have to pay for a ticket--and obviously there are some where you would never use miles, I still have my own restrictions on when I would fly and when I would not fly. Types of trips that may include this for me couple with the fact that I HATE prop planes and AA has 'em, so I wont really fly to NY from BOS, for example. I would honestly rather drive. (then you get to stop off here anyway! http://www.reinsdeli.com/)

we shall see.

noooooooo, you do not know how many people go out of their way for an extra stop-over or transit just to stay on one airline and earn the most miles possible for their trip........and FT will probably cease operation if no FFP exists......:p

And who is going to go first? (And watch all of their loyal FF'ers bail and transfer to the other airlines?)

Never going to happen.

People will go kung fu on their donkey if the airlines ever did this!

(No real contribution to thread except use of cool phrase).

The bottom line is that airlines make serious cash off of FF programs. The NY Times covered this earlier in the year (see http://travel.nytimes.com/2008/04/01...irlines&st=cse), and made light of the fact that AA generated something like $1 Billion in revenue for the sales of miles last year while UAL pulled in close $800 Million. When you consider that AA had somewhere between $20 and $25 billion in revenue last year, the FF program alone brings in between 4% and 5% of the total revenue for the company.

This revenue, as previously pointed out in this forum, is coming from the sale of miles (to credit cards, rental car companies, online retailers, really anyone who will buy them for marketing purposes). Airlines have full control over the exchange rate between miles and the goods/services they offer, thus they can ensure that they are always selling miles for more than the dollar value of how they are being redeemed, or in many cases, not redeemed. As the opportunity cost to airlines for reward seats has increased as load factors have increased, we have seen changes in FF programs to keep them in the black. The elimination of additional bonus miles, the topic that this thread started in, is just one of these changes - others include limiting reward seats, adding lower cost (to the airlines that is) reward choices, having miles expire, and so on.

Of course, the FF program as a means of encouraging loyalty is also very important (that is why these things started in the first place). It's harder to quantify the financial impact of the programs without having access to the airlines' data, but it is a fair assumption that they know what they are doing. For example, I am sure they can quantify the impact on revenue (and likewise profit) attributed to their programs - further, as already discussed, they can then continue to tweak the redemption side of the programs to manage thier costs. As long as they do a good job running the programs and control their costs as the business landscape evolves, they will continue to make money off of the programs.