Incidentally, I think Mort Beyer was completely wrong in that USA Today article, claiming that the airlines lost 20 billion in revenue on award flights. If 70% of the seats are filled, and they give away 10% of them, there are still 20% empty seats. And as FT's have gone on and on about, the yield management folks just don't release many FC seats to Hawaii at Christmas. So the vast majority of award seats are seats that would have been empty anyway. NO loss of revenue.

Agree. An airline probably couldn't cancel its program even if it wanted too. Could you imagine, lets say, American Airlines announcing "the end of AAdvantage in six months." If 10% of seats flown are awards now, one could only guess what percent would be award seats for the next six months to a year (all of them?). If they cancel and say at the same time that mileage requirements are going up, a panic might result with people booking AAnytime awards like there is no tomorrow. The way I see it, if an airline can't afford to keep their program they also can't afford to cancel it, unless they can afford to fly planes with nothing but mileage award customers for the next six months to a year, as people cash them in.
Anyway, I don't buy the argument that airlines are "giving away" 10% of their seats as mileage awards. First, I see much of these awards as "pre-paid" travel, because half of miles earned are through things like using a specific credit card in which the airline earns money from. Second, many of this 10% are awards for seats that wouldn't have been sold. If a flight would have flown half-empty with no award customers on it, is instead 75% full with 25% award customers, the additional cost to fly those customers is relatively small. Maybe just $20 more per person, for things like a meal, ground support, and a bit more fuel because the plane is heavier. So if it costs an airline only $20 to fly someone on a 25,000 mile plan-ahead award, they end up way ahead.
My two cents worth.



[This message has been edited by burgerwars (edited Feb 07, 2004).]