How do Alliances work?
Apr 26, 2006 | 4:25 am
#1
Original Poster
FlyerTalk Evangelist
Join Date: Sep 2003
Posts: 12,412
How do Alliances work?
Like say if I am a Thai member and get a ticket from Singapore Airlines that is issued by them and is on their metal. Thai gives me the points but how does SQ compensate them?
Secondly if I burn my TG miles on another *A partner then how does TG compensate the other airline?
Does that work for Lounge access too?
Secondly if I burn my TG miles on another *A partner then how does TG compensate the other airline?
Does that work for Lounge access too?
Apr 30, 2006 | 11:57 am
#3
Join Date: Aug 2005
Location: SAN
Posts: 2,426
I'm not certain that this really explains it, but the following was quoted from the UA annual report in the UA forum. It looks like the alliance partner that you fly your award travel with does much better than the airline with which you have your account.
Originally Posted by SFO_Runner
"In addition to the awards issued for travel on United, approximately 21% of the total miles redeemed in 2005 were used for travel on partner airlines, such as Star Alliance members. In these cases, United estimates its liability based upon agreements with those partner airlines that specify reimbursement rates for those awards using a 12.5% historical redemption pattern of awards redeemed on partner airlines. Costs to United for awards issued on partner airlines are on average much higher than incremental costs of awards issued for travel on United. Therefore, a change in customer preference from redeeming awards on United to redeeming them on partner airlines can significantly increase the estimated cost of mileage credit obligations. A hypothetical 1% change in the redemption of awards on partner airlines has approximately an $8.3 million effect on the liability."