Article on FF programs
 

Here's an article written by Christopher Elliot, which I'm sure many are familiar with, about FF programs and how they are rigged against the passenger. A congressman even went so far as to have the DOT audit the programs, which is currently ongoing.

http://seattletimes.com/html/travel/...lliottxml.html

Complete waste of government time. If you don't like frequent flyer programs, don't participate. That simple! :mad:

Regulating frequent flyer programs will just in turn make it worse for consumers.

Participation in a frequent flyer program is completely optional. I agree that especially with all the devaluations lately that it is a bad proposition for a lot of people. I am getting out of the miles game by opening the barclay card arrival and cancelling my Citi AA card when the annual fee is due. Even though I fly AA I feel it is a foregone conclusion they will match United and Delta when the new program is announced. At that point I get a better rate of return going with a straight cashback style credit card rewards. I will still collect miles, but ONLY BIS miles. No longer will I go out of my way to collect miles though partners.

Even southwest has devalued to a point where I am better off with straight cashback. The only airline out there with a decent program is Alaska and unfortunately they don't serve my home airport.

Don't like frequent flyer programs? Think they are predatory? Then don't join one! :mad: A real busybody this senator in the article.

+1

Actually, in the U.S. it generally isn't: you're forced to buy your miles along with your revenue ticket whether you want them or not, with very few exceptions.

That said, I do not believe it would benefit Flyertalkers at all for the government to audit or regulate FFP's. Nor would it benefit us if the FFP's became optional - in fact, that would be disastrous to people like us.

Your conclusion assumes certain outcomes about regulation and the consequences of regulation which are anything but certain unless you know the exact nature of the regulation that gets implemented.

Expanded disclosure requirements are a form of regulation that may be a very useful thing for consumers. That is unless you believe that a better informed consumer is bad for capitalism. ;)

A better informed consumer would be bad for travel hackers. That's all I'm sayin'... ;)

I fully concede that transparency and disclosure would be better for the average consumer. I'm just greedy about the small bit of information arbitrage that we still have in "power user" groups like this. That's all... :o

We rely on those billions of miles paid for but never accrued because the person didn't bother to sign up for the FFP. We rely on those billions of miles that expire. We rely on those people who redeem for a 50,000-mile Y award to Orlando. We rely on people who redeem out of those merchandise catalogs. Without all of this, our favorite long-haul F/J awards either don't exist, are impossible to get, or cost 5-10 times as much.

I game this game pretty well and better than most; and yet I don't fear that every kind of disclosure would equally undermine (if undermine at all) my ability to game this game as every other kind of disclosure requirement may.

Not all regulation is created equal. Just saying.

You do not provide a number, you do not get miles. What's the problem?
If they want to enroll you every time to give you miles, just forget for the the number and you are all set.

Noone is forced to get or use miles - you can simply fly and not care about the FFPs...

I think he is saying there are unpublished fares that are cheaper that do not provide FF benefits. If they offered these fares to the public, Kettle Jim and Jane might buy them as might businesses start to require you buy them. Thus the FF+ fares become more expensive because the once a year flyers aren't helping support it. Which is why, I think more businesses don't offer sans-benefit pricing... It hurts their programs..

Great. After all the government definitely doesn't have more pressing problems that they should be addressing.

"What difference does it make??"

:confused: What difference does what make? I was merely making a lighthearted quip.

But for what it's worth I don't see a need for government regulation or involvement in FFPs.

So was I. That's why it was in quotes. It's a fairly well known phrase in the US right now.

Government allows consolidation of US airline industry and is subsequently surprised that airlines now provide less to their customers - shocking.

Right now? Also, in the 1970s, 1980s, 1990s, 2000s and 2010s. ;)

If there is "shock", it seems to be of the movie Casablanca variety whereby the inspector claims to be "shocked" about gambling.

Hillary?

:rolleyes:

Also in the 1960s and before. But a FFP before the 1970s? Don't recall that, even as frequent buyer/customer programs have been around long before that -- along with concerns about frequent buyer/customer programs opersting like Ponzi-schemes or otherwise having sustainability concerns.

I know we're well into a hypothetical realm here, so I'll just speculate: I suspect that if the government scrutinized FFP's closely, they'd want a lot more transparency and metrics about all of the programs. A quasi-balance-sheet, in mileage terms, from major programs. There would be a natural tendency to examine accounting and reporting practices, and there might even be a push to define fliers' rights (legally) with regards to their miles. That leads us to a place where miles are treated more like property, like a currency.

Even if we stop short of taxation of miles (which is where this discussion often leads), I think it could lead to "flatter" programs where 1 mile translates to a fixed discount against future travel. (In other words, the Southwest program.)

All done with good intentions on the part of those seeking change, but change that doesn't necessarily benefit those who already know and play today's programs very well.

Fully recognize that this isn't the only possible outcome...it's just one outcome that gives me pause whenever we have a thread about expanding oversight, often done with the thought that fliers should legally "own" their miles.

But you're forced to buy them. Every time you fly. Very, very limited exceptions on U.S. carriers.

Indeed...I was mainly thinking of "suboptimal users" opting out of the programs, thus halting their subsidization of my long-haul F award, eventually leading to the cost of that F award to me going up in one or more ways. But give our clients/employers the option to *not* pay for our miles, and yes, you can see where that's going rather quickly...

Green Stamps!

I think this article makes a valid point. From the perspective of the majority of the public, frequent flier programs do more harm than good. Essentially, most people pay a little more so that a few people can get extra benefits. Of course, most of us are in the latter group :)

Norway banned frequent flier programs several years ago, and by some accounts fares have gone down.

It would be interesting to see what comes of this. I don't see any bans or major regulations in free-market-crazy America, but perhaps there will be disclosure requirements similar to a Schumer Box.

Norway never banned frequent flyer programs. Norway banned the earning of frequent flyer miles on some flights; but it did not ban earning of FF miles for all flights. Nor did it ban companies from having a frequent flyer program offering in Norway or from marketing FF programs to Norwegians. What Norway did to increase the opportunity for competitors to rise up against the legacy carrier was to restrict the earning of FFP miles/points on a defined type of route. Sweden did something like Norway did too, but Sweden's method was more targeted and city pair specific than Norway's. This of course is largely just a history lesson at this point. That said, the restrictions did level the playing field a bit for de novo players/competitors and had probably increased the affordability of travel over what it would otherwise be. Whether such approach would hold true for the US is more in doubt.