With there soon to be only 3 major carriers I predict that the airlines will continue to devalue the FF programs since most folks are captive to a network and don't really have much choice. Add to this the push for FCM and there is very little benefit left that you can't get with a credit card for each major.

But - there will probably be another wave of LCC once the big 3 get too big for their britches.

I will continue to fly Delta, because I don't have much choice, and will cheerfully accept whatever crumbs they throw my way....

It was a good run that is coming to a close

Well, now that it's official, guess it's time to shut the site down...

I dont think its over and I think the FF can still make an impact by who they fly with.

Time will tell, but I'm not sure what the OP could be basing his judgment on.

We're the only country in the world that ever had the number of multi-hub carriers to choose from that we did.

If you lived in Frankfurt, you'd be hub captive to Lufthansa. Sure, you could fly to any other city on Alitalia, if you wanted to go through Rome or Milan. Or you could choose another country's flag carrier to go straight there.

That's no different than living in Atlanta and having the choice to fly Delta direct anywhere, or if heading to Phoenix, going direct on Arizona's "flag carrier" US Airways. Or connecting in another city via UA, JetBlue, Southwest, etc.

Even after the KLM-AirFrance-Alitalia deals, frequent flier programs are alive and well in Europe. If anything, they're harder to "game" with cheap fares, but the benefits are much better.

Southwest is pretty big domestically, so it's more like 3.5 major carriers

I agree that FF programs are being devalued, and I agree that a wave of LCC's or even some "regular" airlines will come, since overall capacity is probably reduced, compared to before the DL/NW, UA/CO, AA/US mergers.

I think that not only FFers will be disappointed with the new pay-for-everything flying experience, but also less frequent flyers who can reminisce about "how it used to be" and will be tempted to try a new airline, if one will be available, since their familiar airline gives them less for more.

It seems like a wave:
Lots of carriers and fierce competition drive prices down, capacity up, and airlines pull out all the stops to make their customers happy.
All this, however, leads to lower revenues and profits and eventually drives some of them into bankruptcy, which causes mergers and buyouts, reducing the number of carriers.
This, in turn, reduces competition, thus causing prices to go up, passengers get frustrated, and dreams of new carriers are born.

Well if you're a hub/route captive, you're SOL, but I think most people are still pretty satisfied with the UA and AA programs. (There a lot of complaints about UA but it's mostly about operational issues not MP.).

I agree. My guess is five years before most programs are gutted.

It's not so much the fact that we have three major carriers but the fact that loads are so high. The industry has finally "right sized" capacity and realized that profits are more important than non-stop growth at all costs.

What a lot of you don't understand is that FF programs are not primarily about offering perks and rewarding loyalty. They're about price discrimination and you have to price discriminate to maximize profits and the best way to price discriminate is through FF programs.

This is an interesting concept that I haven't thought about or ever heard of.
Are there any FF programs (past or present) that do this?

They all do and always have. They aren't about rewarding past behavior they are about driving future behavior.

Exactly. I don't check for the lowest price, I try to find the lowest price on Delta. Most of my travel is pretty much discretionary -- if I don't find a price I can live with on Delta then I most likely don't go or I change the trip parameters so the price is one I can live with.

If I weren't totally assimilated by the collective, I would pick the cheapest price within some travel time, connection, comfort parameters and the chances are that it would be on a bunch of other airlines. So SkyMiles drives business to Delta (in my case). No SkyMiles (or gutted SkyMiles) and I fly the cheapest.

Agreed, but don't believe that it is imminent. AA initiated the Advantage program in the very early 80's, and the others soon followed. The demise will likewise start with one carrier dismantling its program, and the others will then follow suit. They will lawyer this up, in order to avoid any anti-trust issues.

The move will be explained as a cost saving initiative, since it will permit the airlines to eliminate their FF infrastructures.

I agree to some extend... I think we are going along the long road/hill of the effective dismantling/stripping of FF programs in general. Sure they may offer a few limited perks, however airlines themselves are actively commoditizing their own product. That results in little distinguishing differences between the airline products, and as a result drives more and more people to pick solely based on price.

As FF programs become less and less of an incentive, the ability for airlines to influence customers' price discrimination diminishes, so instead of pax looking for the best options from DL or AA or whoever, they will be looking at the best options from Expedia regardless of carrier etc.

Which is not the definition of price discrimination. What FF programs do is provide additional value to the traveler that justifies, in the mind of the traveler, the additional payment. You get more, you pay more. If the reality fails to meet the perception ( through devaluation) then fliers will be less willing to pay more.

The airlines use their FF programs as part of their product differentiation strategy. Convenience, onboard amenities, etc., are also part of this, of course.

Price discrimination is used by the revenue management guys and the $150 fee to change your ticket.

People just need to be aware of what price discrimination means. It's not discrimination in the sense if how that word is usually used, for instance minorities aren't being offered different prices.

Lots of things airlines do are partly for price discrimination. One big example would be advanced purchase and Saturday stay over fares, which tend to cause business travelers to pay more for tickets. On the FF side, an example would be not giving any or full miles on some discounted tickets, so that many FFers will buy more expensive fares in order to get the miles. One could analyze this as a bundles sale too, and treat flight versus flight and miles combination as different products being offered for sale, of course at different prices.