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I, like many of the other FTers, am concerned about the changing landscape of frequent flyer programs. Two months ago, US Airways declared war on its elites by reducing benefits for those who paid "cheap fares." While they rescinded, Delta now follows suit with a host of changes aimed to reduce benefits that would accrue to those also on cheap (dare I say "regular") fares.
It seems to me that airlines have forgotten why loyalty programs were created in the first place.
Instead of rewarding me for choosing, say, Delta over, and over, and over again, there is minimal benefit for me to do so now. Indeed, they have managed to not only lose loyalty but also alienate customers that have loyally stuck with them over the years -- bringing them long-term revenue.
Instead of looking at all customers as revenue-generators, airlines seem to be focusing all their attention on high-revenue flyers. While these intentions are certainly not misplaced (who wouldn't want high-revenue flyers returning?), to do so at the expense of every other flyer is simply bad business. I personally may not spend $50,000 a year on tickets, but my company, whose travel decisions I dictate, spends far more. Indeed, Delta (for sake of example) is now effectively rewarding people who have little choice over the airline they fly. I would wager that most (certainly not "all") of their "high-revenue" flyers choose airlines based on their corporate contracts. And if I pay for a first class ticket, I may not really care if I fly United, British Airways, or American over the ocean... I get the perks anyway!
Having said all this, I understand why they are doing it. Perhaps, they have figured, it costs more to provide premium benefits to someone like me who spends relatively little than I provide in revenue to cover these costs. But I sincerely doubt it.
This is just the rambling of my mind this morning...
[This message has been edited by JohnnyP (edited 12-12-2002).]
Amen Brother JohnnyP
My personal gripe with the airlines is that they offer mileage programs based upon a non-profit-maximising basis. As such, an airline should be offering miles much like Starwood does. For example 5 miles per $ spent with the airline (either inclusive or exclusive of tax – whatever is easier). This allows for two things. Firstly, it increases revenue and buying power, as you may then decide to book all hotels and car associated products through the airline and secondly it rewards your “high spend” customers while not impacting on your “low spend” customer. What it does avoid is people giving you $200 to fly on 10 segments all around the country because of maximum mile earning potential.
It would then be easy to relate to spend to elite benefits and you would be able to provide a MUCH better elite program. For example if I knew that ever 1K or EXP spent over $50,000 per year with my airline, they would be getting free lounge access, personal Christmas presents, bouquets of flowers at random times of the year etc. Further I could allocate say $1,000 in benefits per EXP or 1K, whereas now, you have a devalued loyalty program that people can effectively buy into for a very low cost and as such giving $1000 worth of benefits to a 1K or EXP will result in further losses from some passengers.
Airlines are out to make money. The way the elite program currently works is flawed and dates back to the days where the cost per mile of travel was regulated and the airline could say with some certainty that if you flew 100,000 miles, you made the airline quite a lot of money. These days it may be that if you flew 100,000 miles you lost the airline quite a lot of money.
This no doubt brings up the argument that 1K and EXP’s who fly on cheap fares fill up empty seats and make the airline money anyway, so I will shortly digress to explain this a little further.
As has been stated, an empty seat has a marginal cost of zero (or at least a very low marginal cost). This is prima facie correct, however when further explored also shows flaws. One the main problems facing united is a “bloated” fleet and as such, talk has been centred around reducing the fleet to core profitable areas. The reason that the fleet has become bloated is because of these “cheap – no marginal cost” seat mentality in the airline. Take for example a 100 seat jet flying profitably between LAX and TUS with 80 Y and B pax’s. Now the airline see that 80 people are booked on this flight and thus has 20 “free” seats to sell at whatever price it wants, so it sell them below 1/100’th of the cost of sending the plane (big mistake but in order to sell the seats it needs to do this based on the supply and demand in the market). Now because they overbook they sell 30 seats at this price. 5 no-show and they pay compensation to 5 for overbooking. Now this happens a few times and in a review of the LAX-TUS sector, it shows that the plane is always leaving with full and sometimes overfull. So the powers that be, incorrectly (and the critical flaw), increase the service to a 150-seat plane. Still 80 people buy the profit making Y and B fares and the airline has 70 “free – no marginal cost” seats, so it sells them at below 1/150th of the cost of sending the plane on its way (they are “free” seats that would have gone empty anyway right?), the route is now not making a profit, but not making a loss either. Then again the powers that be, see that plane leaving full and increase it to a 767 on the route. Now you have a route losing money and have got a bloated fleet. You also have a ruined industry as people are expecting these “low – no marginal cost fares” all the time when if fact you make no money on them. Further because you wanted to encourage even more people to buy these “no marginal cost seats (as an empty seat is incorrectly described as lost money!)” you lessened the restrictions and now your 80 Y and B pax are only 50 in number and the other 30 are buying below marginal cost, further putting your little airline in trouble (this scenario also applies to the granting of FF seats – and is why the airlines need to account for them at the true cost – ie 1/100th of flying the 100 seat jet somewhere – not the marginal cost of the Pepsi).
Now you are in a position with bloated fleets, a chapter 11 filing on the horizon and consumers who expect – no demand – fares that be below your cost base. While this is only one (of a long list) of problems that went wrong with the airlines, it is an important one and one that people should realise when then say “they should just give me the seat, it costs them nothing anyway”!
What I don’t get is Delta’s management is telling everyone their biggest competitor is now WN. So to compete with WN they take they take their most loyal customer paying a fare that is higher than WN’s max $299 fare and putting them in a couch seat that is worse than WN’s coach product. Meanwhile WN is saying:
· We won’t charge you over $299
· We will serve you better food.
· Let us buy you a beer and offer you another on a 55 minute flight
· We won’t bus you to a RJ
· We will give you a free ticket after 4 RT’s
· There are no limitations on award ticket seats on any flight
· Sure bring your wife on your trip, we will pay the cost
· Grab yourself a Time magazine, it’s in the overhead with Newsweek and people
· Grab yourself a doughnut and coffee at the gate in the morning, it’s on us
· Enjoy the leather seat and more room than DL
· Oh and yes our shareholders and employees greatly appreciate the return you are giving to our share price and profit-sharing.
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Originally posted by PremEx:
"Plus" the programs for hi-revs all you want, but you gotta fill those cheap seats too!
However, the passengers in those cheap seats are expendable. You don't need to spend to earn their loyalty because they make their decisions primarily based on price. If you are competitive on that front, then additional incentives offered are overkill that simply hurts your bottom line.
I've posted this before here in MilesBuzz, but I sometimes get the feeling lately that customers have somehow gotten lumped in with employees, unions, suppliers and other cost items in the mindset of management at many of the airlines.
The customer is not the enemy!
The customer is not costing you!
The customer is your main source of income!
And without them, you'll end up having no costs whatsoever...I guarantee it. http://www.flyertalk.com/forum/frown.gif
Yes, I do think some of the new FF policies are creating "anti-loyalties" and airlines should really think eight times before reducing existing major policies like earning full status miles on low fare tickets.
"Plus" the programs for hi-revs all you want, but you gotta fill those cheap seats too!
First, do no harm.
So what if we can earn status faster based on revenue at DL. With their recent slashing of benefits for elite status, what's the point of working for an elite level that has relatively little return value anymore?
Here's basically what rewards remain for a SkyMiles elite member:
Silver:
Pre-boarding
1 trans-con r/t u/g per year
25% bonus miles
Gold:
Pre-boarding
Special security lane
2 trans-con r/t u/g per year
50% bonus miles
Platinum:
Pre-boarding
Comp Crown Room membership
Special security lane
4 trans-con r/t u/g per year via 500 milers
6 one-way u/g on select fares via PMU
100% bonus miles
Lots has been mentioned about upper level elite being able to 'gift' a membership to a friend, but if your friend has minimal flying (and thus little 500 mile point earning capacity), what benefit do they realize?
DL, and others, loyalty is a two way street. When you loose (not lose, as lose suggests it was something unavoidable and at not fault of the airline) a high revenue customer because you cheezed them off, it's quite difficult and expensive to win them (or their friends/coworkers/etc...) back. You've taken a calculated risk - we'll see in 18 months if you made a 'profitable' decision.
GMF
p.s. When most of your loyal, high-rev customers walk elsewhere and you go knocking on doors in DC lookng for a handout ... don't expect me to be writing my senator/congressman in support of handing you my tax dollars. In fact, you may just see a letter there supporting they abstain.
Originally posted by PremEx:
The customer is not the enemy!
The customer is not costing you!
The customer is your main source of income!
.
Reminds me of a conversation I overheard at EWR between a CO gate agent and supervisor. It boiled down to the supervisor complaining that they could run a much better airline if it weren't for all these **** passengers.
Originally posted by brundlefly76:
Beleive me, if it were bad business, they simply wouldnt do it.
They do it because they graphed it on an ROI curve and found it to be optimal.
I can probably speak for everyone when I say none of us has say down with Excel and a quarterly sales report of our airlines and determined whether this move would be beneficial.
But you can be sure someone at the airline has.
Looking at the state UA and US is in, can anyone say with a straight face that airline management don't make pretty stupid decisions on a regular basis?
Originally posted by JohnnyP:
I personally may not spend $50,000 a year on tickets, but my company, whose travel decisions I dictate, spends far more.
I am not disagreeing with your comments overall. However, if you have not done so already, you might want to look into Delta's program for small businesses called SkyBonus. It is like a FF program for businesses and awards free tickets, upgrades, Crown Room admissions, and Silver Medallion status. This might help replace some of the lost benefits from the changes in SkyMiles.
http://www.delta-skybonus.com
Not going to happen! The airlines make a lot of money off this (e.g., credit card rev.). This line of revenue is especially helpful in todays slow economy.
Originally posted by Gordon is A Liar:
When will you guys get the message? We simple don't give a horses backside whether you are our FF! Move it in and move it out. It's the name of the game. These programs will all be extinct soon, much like Peoples Express. The only thing we haven't quite figured out yet is how to still sell miles that no one will ever be able to use. Ha ha ha. I laugh myself to sleep every night!
I think DL's changes are pretty smart.
People searching for the rock bottom fare can fly DL and incidentally earn some miles.
People flying higher revenue in DL's hubs will be rewarded with more comfortable travel. People earning on DL's FF credit cards and so forth can still earn free travel rewards.
And DL will sell out the seats up front through their day of travel upgrade opportunities, so they will get something for these seats which won't fly empty.
The incentives are for higher rev pax and do not jeopardize profitable sale of FF miles by DL through credit cards and other programs. A pretty good deal for DL I think.
As for pax, we all have to get used to these programs because they will spread.
Revenue is what counts, not miles.
In my opinion at this time (going on 2003) every airline's primary concern should be in keeping travellers interested and willing to fly. They don't have to give the store away, but they certainly shouldn't be making travel more difficult (or less rewarding) for passengers.
The new Delta policy clearly favors revenue over flight miles/segments. If they wanted to introduce this they probably should have done it 5 years ago. The economy was much stronger then, and discounted airfares weren't nearly so widespread.
Now a days though I just don't see nearly as many people that either can (business) or chose (personal) to pay a higher fare for the possibility of being upfront and having a higher status.
Jeff
Originally posted by B747-437B:
However, the passengers in those cheap seats are expendable. You don't need to spend to earn their loyalty because they make their decisions primarily based on price. If you are competitive on that front, then additional incentives offered are overkill that simply hurts your bottom line.
When all the carriers match each other on price within hours of a fare change what can the folks in the cheap seats look to to differentiate? Brand loyalty programs, that offer MILES!
This is where I think AA has it better than other airlines.
I sometimes spend a lot on flights, sometimes a little. However, I control all the flight expenditures for my employees.
The fact is that is someone makes platinum by flying on cheap trips that on average and demographically this person probably is a customer that the airline really wants if they analyze their 'whole relationship.'
Delta has lost all of my business and all of my employees business. It makes not sense for me to fly it [except for award travel for miles already earned].
Originally posted by runningshoes:
I agree with most of the points but why are you assuming that more 1st class seats will be sold as opposed to upgraded? I think that over time you will see more folks in front with less medallion status and higher fares - i.e. more of the GM/PM folks will buy lower fares allowing the SM to have better chances at upgrades.
Delta has been hawking FC upgrades at the gate for $40-60 for weeks now... anyone can buy, elite or not! So there certainly doesn't seem to be any undersupply of FC seat availability!
It's called a Frequent FLYER program, not Frequent BUYER program. If the airlines really think that people are going to all of a sudden start paying $X.00 more for a full-fare ticket just so they can get some extra points in a FF program, they are in dire need of a 12-step drug program. BTW, what is the average price difference between a full-fare Y ticket and a cheap-o Y ticket these days?
Originally posted by xyzzy:
When all the carriers match each other on price within hours of a fare change what can the folks in the cheap seats look to to differentiate? Brand loyalty programs, that offer MILES!
Not quite. When discounting wars take place, most customers are primarily attracted by price, followed by schedule. The only people who care about loyalty programs in cases like this are the die-hard mileage junkies that inhabit FlyerTalk. This board is hardly representative of the traveling public as a whole. In fact, when an airline is attracting loyal frequent flyers to a discount fare because of its FF program, the entire marketing mix has gone horribly wrong because those are the kind of traveler who needs to be incentivized by the program to buy regular fares.
Originally posted by B747-437B:
For Q3 2002, excluding transcon and international routes, approximately 92% of Domestic US First Class ASMs were either filled by upgrades, discounts, employees or left empty.
Thanks for that data point, Sean.
And in any other industry in the world, if you were only selling (as opposed to giving away) eight percent of your product at the going rate, you would take it as a very clear sign from the market that the price of that product needs to be lowered.
Economics 101.
Why airlines haven't yet figured out that they're losing tremendous amounts of potential marginal revenue on those 92% of seats is beyond me.
They don't need to (and shouldn't) sell them all, of course. But really, now, who other than the very wealthy or very stupid among us has no truck with spending in excess of three thousand dollars for a wider seat, a $10 meal, and $15 worth of free booze?
Mook
As someone without status on any airline, I think its ironic that panic has now swept over the elites at the conduct displayed by the airlines. Previously, most on this board defended similar airline tactics when they were aimed at the bourgeous non-status FFers. Many of you defended the airlines then because you saw any benefit to a non-elite as coming out of your kitty.
Originally posted by Dugernaut:
Reminds me of a conversation I overheard at EWR between a CO gate agent and supervisor. It boiled down to the supervisor complaining that they could run a much better airline if it weren't for all these **** passengers.
Great philosophy. That's like saying you can be a healthy person if you didn't have to eat or breathe.
Originally posted by richard:
Revenue is what counts, not miles.
true if it's the "ONLY" game in town, but if the competitors don't match, DL may see their revenue disappear very quickly.
I too (Platinum-Delta) was just informed about Delta's new "frequent buyer" program. Living in Atlanta, at least one good part is that it rewards miles x dollars, without regard to segments. Thus, those of us who fly out of hubs won't be disadvantaged by the double segments earned by those who are off-line (and take two flights to get to most destinations). Overall, however, Delta has lost a lot of credibility with many of its best customers who may very well just write off the benefits of what use to be a decent FF program, ... and simply fly routes and fares.
Robert and B747 good morning - my point exactly. The airlines are not selling 1st class seats currently and I don't see these changes improving that situation. I do think that they will improve the average price they get for a seat if DL maintains the current changes. A SM buying a last minute M+ ticket would likely have a pretty good chance of upgrading under the new scenario, today it's unlikely. The seats will still be full of people upgrading (and whoever else makes up the other 92% of 747's number). In fact, at DL with the new changes, there will not be an empty seat in the house, but I just don't see the airlines making more money this way.
IMHO, as I posted on the DL forum, they would be better off by changing the qualification process to the one suggested, raising K class fares by x%, and leaving benefits alone.
I think it's related from the perspective that the Airlines created the FF animal and now they don't know which direction to take it. No one is willing to admit that they don't want them anymore so they all tweak them and this move by DL is just their attempt to "be a leader". The idea appears to be moving towards less (or more costly) awards and fewer options to control costs. I'd say that it isn't worth dumping any miles today but that you should be ready in 2003 to make some kind of move.
I have 500k worth of miles sitting in my UA account and after reading that column, I thought a lot about moving them all over to my Hilton account just as a way to not have to make that decision yet. I still may do that despite what Randy says on this board.
Why should I be loyal to a particular airline? I do not perceive that to be in my enlightened self interest. Airlines are not loyal to me, nor do I expect them to be; it is not in their enlightened self interest to do this.
I want to get from airlines (and all other service providers) the most that I can, while at the same time spending with them as little as possible. That is exactly the obverse of what the airlines are expected by their shareholders to do. The problem is, us customers have lately been doing a better job (aided by the Internet) than the airlines have done at their job. If both customers and providers were on top of their game, the relationship would be in a steady state, and both buyer and seller would be relatively happy.
Originally posted by runningshoes:
why are you assuming that more 1st class seats will be sold as opposed to upgraded?
For Q3 2002, excluding transcon and international routes, approximately 92% of Domestic US First Class ASMs were either filled by upgrades, discounts, employees or left empty.
Originally posted by Portland1k:
I have 500k worth of miles sitting in my UA account and after reading that column, I thought a lot about moving them all over to my Hilton account just as a way to not have to make that decision yet. I still may do that despite what Randy says on this board.
Hilton has a major devaluation effective June 1, 2003. Redeem what you move before then.
Originally posted by MrMan:
Grab yourself a doughnut and coffee at the gate in the morning, it’s on usI forgot about the free doughnuts on WN... it made getting to Midway at 5:45am almost tolerable when I was flying to Nashville every other week a few years ago.
A doughnut costs WN at most 35 cents. But it makes the right statement. Meanwhile, AA can't get any decent kind of AM snack besides apples in their ORD Admirals Clubs, and I'm paying $250/year for that.
The bottom line is that the airlines gave you the ff miles but they dont want to make it easy to redemm the miles for flights. They always have extra seats aso their cost is little to carry you on the plane. While airlines in the past have made the bulk of their money from business travelers, they still need leisure travelers to fill seats. Businesses will travel less and less and this will continue for many years. Businesses can teleconference, reduce the number of trade shows that they exhibit and travel to (waste of time and money) etc. The airlines will need to find a way to make money in a price sensative market.
When will you guys get the message? We simple don't give a horses backside whether you are our FF! Move it in and move it out. It's the name of the game. These programs will all be extinct soon, much like Peoples Express. The only thing we haven't quite figured out yet is how to still sell miles that no one will ever be able to use. Ha ha ha. I laugh myself to sleep every night!
Originally posted by brundlefly76:
Beleive me, if it were bad business, they simply wouldnt do it.
http://www.flyertalk.com/forum/rolleyes.gif
With all due respect, you obviously know very little about the thought processes of senior airline management in the US ...
------------------
Vasant
Originally posted by goldmedallionflyer:
Here's basically what rewards remain for a SkyMiles elite member:
Gold:
Pre-boarding
Special security lane
2 trans-con r/t u/g per year
50% bonus miles
GMF: AFAIK, it is still 100% mileage bonus for GM. That's a big difference, to me anyway. http://www.flyertalk.com/forum/smile.gif
I fly about 175K on domestic segments per year.
To capture my loyalty (1-2 tickets average per week) the airline has got to keep me loyal.
Whether FF programs are eliminated the core issue of keeping pax loyal will remain.
A 50% business fare and 50% discount fare road warrior is too valuable to the major airlines to ignore.
Good luck!
I got the DL email and saw the blurb in the USA today. I figured this would eventually happen. I believe DL (and soon all the other majors) are following AA's lead in fare-based elite privileges because of the need to offer premium service or seating to those willing or having to pay the premium prices the airlines so dearly want. Over the past few years, first class flyers went from the type of exec that could care less what it cost to fly up front to gradually being filled with savvy cockroaches (like me) that could game the system to sit up front. I really don't think we displaced that many premium paying passengers, but I guess it's part of the airlines master plan to differentiate levels of service better to the premium payers than done in the past.
I was the top tier on AA when the top tier was platinum. Once AA introduced fare-based EXP status, I figured I would never able to achieve that level so I migrated to US & DL. I am now faced with not making Platinum on DL ever again. I'll stick with US cockroach preferred until they go with fare-based status, then I will go with cheapest fare, regardless...even if it is a not a major airline. At this point I will no longer give my discretionary travel to Delta to maintain status. From here on, it will be the airline with 1. cheapest fare and 2. the award destinations I may want to go to, now it's most likely AA. I guess in my book, the term "loyalty" will no longer be associated with ff programs.
As I look forward to life in coach, I guess I can justify this by asking "Where would Jesus sit?"
YES, they are creating anti-loyalties. US Airways was my second choice airline (I have had elite status on them) until their stupidity a couple of months ago. Now I would only fly them if their price was light years better than anybody else. I avoid them.
Delta has been my carrier of choice (I have been a GM for a number of years). That will now most certainly change.
Delta has trashed their product by becoming a half-service trans-Atlantic carrier by such things as charging for drinks and not carrying enough newspapers for everyone. Now they have trashed their elite program.
I have regularly paid more for Delta tickets because of the perks of GM status. NW is ALWAYS cheaper in my market for trans-Atlantic travel and US and AA often are. If I fly by price instead of perks, Delta isn't even in the ballpark.
In the depressed airline market, I strongly suspect that at least one carrier will want the competitive advantage of keeping a normal ff elite program. They will end up growing their airline at the expense of Delta
and any camp followers who join them, who will be flying a lot of empty seats. That will really help their revenue picture!!!!!
A number of the major European carriers are operating profitably and they haven't cut their cabin amenities or trashed their ff programs. Some of them are offering better fares than the likes of Delta. When people compare product, price, and ff programs, they may end of the big winners in all of this.
One other type person they ignore are people like me. I have sufficiently traveled the world so that I could sit back and enjoy some time at home - no travel at all. My company dictates via price what airline I must fly. My discretionary travel - which I might add includes business class trans-oceanic flights from time to time - is up to me. I view the domestic upgrades as somewhat of a reward for the flights for which I pay more. I say, make F and C,J,Z class fares reasonable. Someone in marketing must know the price at which the upper middle income passenger will pay the premium for more space. Also, why aren't 'weekly' internet specials daily specials? If the day before a nearly empty flight departs, why not promote rock-bottom fares? Of course, this could not be for every flight every day in this situation or everyone would wait around and assume a cheap seat would be available. Make it random enough that no one could count on it, but widespread enough that many flights with 20% load factor would be minimized. I've never understood why early Sunday am flights weren't discounted dramatically.
See related article:
http://www.flyertalk.com/forum/Forum109/HTML/005531.html
Just read an interesting article by David Rowell at: http://www.thetravelinsider.info/current.htm
Some of what he says makes sense, especially *increasing service* instead of decreasing it. I fly only UA and AS (Alaska). Even though I just made Premiere Exec with UA, and intend to continue to fly them heavily come 2003, I intend to get AS to comp me to MVP Gold and move any flight I can from UA to AS (probably about a dozen) because AS has not gutted their service.
While price is important to me, it is not the end-all be-all. Now, as B747 noted, I may be in the minority on that count, but the fact is if the only difference between Southwest and United is $100, well, that $100 will become the deciding factor.
I mean I do not expect a Ruth's Chris steak in First. But I do not expect peanuts, either. Last year, they served hot meals in F between SEA-DEN. Now it is a bag of mixed nuts.
Spend $15 more on each passenger in Coach, and you can probably charge $25 more for the privelege. Spend $25 more on each passenger in First, and you will get folks who will spend $50 more to book on your airline and then upgrade.
Either way, you come out ahead.
Keep cutting back, and more and more people will decide price alone is all that matters and defect to SW and JB.
Beleive me, if it were bad business, they simply wouldnt do it.
They do it because they graphed it on an ROI curve and found it to be optimal.
I can probably speak for everyone when I say none of us has say down with Excel and a quarterly sales report of our airlines and determined whether this move would be beneficial.
But you can be sure someone at the airline has.
Richard's post is spot on - Revenue counts, not miles. I posted over in the DL group on this earlier today. What gets lost in all of this however is that it no longer becomes a Frequent Flyer program. It's more like Green Stamps where the reward is based on total dollars.
I fly over 115k miles to date with DL this year and I get to sit up front when my travel has me flying on a non-7/14 day discount fare. When it doesn't (for example, I have a trip to Orlando in January and the fare is U class and $250 for cross country travel), I fly in coach. But the missing ingredient here is differentiation. UA and AA have superior coach products to DL's (more legroom). So, that $250, which DL used to get, now goes to a competitor. Eventually, if this continues, DL shrinks in size because of the $50k that my company spent w/ DL now becomes $25k or less and someone else grabs my business. So where's the smarts in that? A smaller number of customers flying fewer planes at higher fares is one end game here and the other is lots of planes packed with discount fare flyers (the new DL Express model). My opinion here is that you cannot do both and survive. Guess which model DL will chose?
Hmmmm, Portalnd1k,
I am wondering if part of what you are saying here also applies to the choice of paid flights over mile award ones. I have wondered if FFP's are not necessarily a lasting and profitable entity but I could be way wrong. This may be somehow related to what you are saying, perhpas?...
http://www.ticked.com/cheapcharlie/2002/chchange.htm
It is just a recent opinion of Cheap Charlie column at ticked.com and has to do with US/UAL, but could trickle into other carriers. I saw this Pessimistic view of UAL Miles Posted By: Dr. J. in another forum...
Your thoughts?
http://www.flyertalk.com/forum/smile.gifMM
Repeat passengers are the objective of all the airlines.
Being customer friendly always helps.
The recent hostile and anti-customer policies have disturbed the status quo and will result in many more passengers switching airlines.
I think the airlines are making a BIG mistake.
I agree with the original post.
When airlines lose money, it makes sense to retain and attract, not alienate, loyal customers.
For example, Delta's SkyMiles program changes came just as I was going to buy several more tickets for 2003. Those tickets are now being bought elsewhere so Delta gains NO revenue.
This year, a typical one, I flew 25,222 Medallion eligible miles and 32 Delta segments. (This is about 65% of my annual travel.) I booked 13 Delta segments already for 2003. For years I've flown Delta even when it may have been more convenient or somewhat cheaper to utilize another carrier.
Customer loyalty is a two-way street. How loyal has Delta been to customers who stuck with Delta after 9/11? (Remember that we who book well in advance give Delta free use of our money, helping cash flow, filling seats and reducing borrowing. Further, when traveling on official business, I owe it to the taxpayers to look for the best price.)
When I bought 2003 travel on Delta, I did so out of customer loyalty. Now I'm told I'm not as "valued" of a customer as I once was. I acted in good faith. Did Delta? I'm stuck with 13 segments I could have flown on other carriers, often with better prices and, now, more consumer friendly policies and greater integrity than Delta has demonstrated.
As for those who argue that Delta's changes make sense, I defy them to show me where alienating ANY customer makes sense, especially when your bottom line is hurting. (Certainly the folks at Southwest have a less schizophrenic fare structure and seem to make money.)
If Delta wanted to reward those who fly on more expensive tickets, it could easily do so. For example, Northwest is giving enhanced elite benefits to those who travel on more expensive tickets with just 20 segments of travel WITHOUT thumbing its nose at the rest of us.
The most user friendly Major airline is going to pick up market share in 2003.
You just cannot build loyalty by reducing the benefits and perks you offer your customers.
The public is generally smart and oftentimes underestimates by the airlines.
Good luck!
Originally posted by richard:
I think DL's changes are pretty smart.
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And DL will sell out the seats up front through their day of travel upgrade opportunities, so they will get something for these seats which won't fly empty.
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Revenue is what counts, not miles.
I agree with most of the points but why are you assuming that more 1st class seats will be sold as opposed to upgraded? I think that over time you will see more folks in front with less medallion status and higher fares - i.e. more of the GM/PM folks will buy lower fares allowing the SM to have better chances at upgrades.
 How much does getting a small tattoo on your hip/stomach hurt?
 Do anyone else have an itchy anus? ?
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New FF policies creating "anti-loyalties"?