It may be important to note there are two general types of frequency program participants. One type

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Yesterday I wrote about revenue-based programs and how I think it s likely that Delta will change it s frequent denver car rental flyer program to align both earning miles and the cost of redemption with the price of airline tickets and how I think that revenue-based programs are bad for both travelers and for the frequent flyer programs themselves.
I had written about the speculation of US Airways in addition to that of Delta in the past. I hadn t seen it written about Alaska Airlines previously, although now that I ve seen that speculation it resonates as at least plausible (more so than if the speculation were about, say, American AAdvantage for sure). I d have put Frontier into that category as well, by the way, although denver car rental I haven t heard recent rumblings in that direction out of Denver.
Joe echoes advice that I give all the time: that you should earn and burn miles in close proximity, not save your miles for some far off future trips. Miles will never be worth more in the future than they are now. Airlines devalue award charts. Rules change.
A year from now, at least one and possibly two of the traditional carriers—Delta Air Lines (NYSE:DAL), United Airlines, American Airlines, US Airways (NYSE: LCC), Alaska Airlines (NYSE: ALK)—will have scrapped their decades-old mileage plans and adopted a revenue-based scheme.
denver car rental This isn t conjecture on my part. I ve been shown the so-called earn and burn structure one carrier may introduce and been informed by another that they will switch next year. The change denver car rental is coming, and it s coming next year.
Unlike some talking-head denver car rental experts, whose financial and psychic interests are tied to the status quo, I think a switch to revenue-based programs will be good for genuine, live-their-lives-on-the-road frequent fliers. denver car rental We spend the most for our airline tickets and are the biggest spenders on the credit cards and other products aligned to our frequency programs. In revenue-based plans, our spending patterns will guarantee we earn the most new scrip and, logically, be the biggest beneficiaries of a reward chart tied the real-time dollar cost of an airline ticket.
I m much less sanguine about the conversion value of any existing miles you have in your woebegone frequent-flier bank, however. Some of the models I ve been shown are distressing, to say the least. Other models grandfather the existing miles and existing award charts,..
That said, I think Joe is right that plenty of business travelers will like the revenue model. I got emails yesterday from folks saying it s great because I accumulate all of these miles and then can t get 4 first class awards to fly with my wife and kids to Orlando for Christmas.
I m not sure that many folks will like the award charts for premium cabins, even domestically, but this idea certainly resonates ease of redemption, you can always use your points (although you can now in most programs at a higher rate than saver awards).
I do get the pressure that the programs feel to deliver on awards. There are too many miles chasing too few seats, they ve printed the miles and planes are full, the current model is that saver seats should only be released when there are seats that would otherwise go empty. That leads to many disappointed members and the worry is that s unsustainable. Though Delta is quite poor in offering awards on its own flights, the Skymiles program itself would no doubt want to offer more saver inventory denver car rental if the airline s revenue management would make that available.
denver car rental At the same time, there are plenty of award seats out there, the problem is just as much technology that doesn t do a good job searching and finding all of the available flights and routings and agents who are not well trained and don t work particularly hard to find seats for members. Folks often go to an airline website thinking that whatever they see there is what s available, or they believe phone agents who tell them nothing is available, when in fact there are seats out there.
With all of those unredeemed miles, we get expiring miles and we inevitably get award chart inflation. The major programs are due for a devaluation it s been 3 years since we ve seen one with United or US Airways. Much longer for American (though for the most part their awards are already priced denver car rental competitively or a bit higher than their competitors and it s unthinkable that the devaluation would come while the airline is still in bankruptcy). Airlines don t want to touch the 25,000 mile domestic coach award level, but they ve been disappointing more and more members at that level. It isn t really business class to Asia that s the problem.
Still, it boggles my mind that businesses making huge margins on billions of dollars of sales would consider walking denver car rental away from their entire business model having convinced themselves it s unsustainable. Reminds me of Coca Cola ditching their golden formula for New Coke out of fear of Pepsi and taste tests.
Which is why, if it were me, I d offer the revenue choice alongside the current award chart model. I d make any ultimate change or phase out gradual over a series of years as I tested and got feedback.
We ll know soon enough. I don't see all of the programs switching right away, I don t see them all offering only revenue-based redemptions instead of award charts. Someone will go there, my hunch is it won t be American, so while I m trying to keep my account balances denver car rental below seven figures across the board (and not in all cases doing a great job of that) I m not walking away from the programs by any means.
Some great points. I m not sure the airlines or those that would be in favor of such changes see the real effects. Southwest can say they haven t lost any business over changes denver car rental but I feel it cost them in growth rate. They are growing so its easier to maintain a level and say that. I feel the airlines will lose mile runners, mile buyers,credit card revenue and shopping denver car rental partner revenue. They also won t fill as many empty seats with award flyers that still paid something for the seat.
Also I agree AA won t make changes until after bankruptcy. They would be more likely to offer so deals on buying miles cheap to get a temporary short tem cash influx. Also I doubt Frontier will make any changes until they are sold.
@Beachfan Chase Ultimate Rewards will be even better because (1) United won t be the first to go revenue-based, and (2) they partner with NON-U.S. airlines, which will still offer superior value for international premium cabin rewards. American Express Membership Rewards and Starwood PReferred Guest will have similar charactieristics/benefits.
I think Southwest fared well since they dont really denver car rental have aspirational flyers. They have the 25k domestic flyers. Most people denver car rental dont think about international first class cabins. For those of us who dream of Lufthansa denver car rental first class, we are frightened by the thought of the changes.
I don t understand how this affects Awards travel with this revenue based program. I have read what your wrote on the links. If an awards travel for United is 100k points for Biz to Europe, would the revenue based program denver car rental have an affect on redeeming 100k points? Or does this program affect upgrades for the awards program?
I guess it is time to stop earning elite status and flying miles (no reason to ditch the mileage-earning credit cards yet). I ve got about 8 million airline miles to burn, so I might as well use them on all (including domestic) flights now and for upgrades after the programs switch. I m guessing that one of the good (relative to what will remain denver car rental after the carnage) surviving uses of miles will be upgrades. This is all very depressing
@greek2me If you are referring to Pay With Miles, DL miles don t have 1 cpm value now since you do not earn any miles or status and cannot upgrade when you travel on a PWM ticket. Maybe they are worth .8-.9 cpm when used this way.
@Sil one version would be that the price of the ticket on a given day determines its price not saying every program does this, or that they scrap award charts entirely, but under that model you could easily see 250k pooints instead of 100
@Sil If miles are assigned denver car rental a fixed value, denver car rental such as 1 cent per mile, a $250 domestic coach ticket will cost 25,000 miles, and a $15,000 international F ticket will cost 1,500,000 miles. I think that is what Gary is referring to.
It may be important to note there are two general types of frequency program participants. One type is the type that knows it is generally wise to sign up and get the goodies. They often will even get an affiliated credit denver car rental card, and when they go to spend points they do so haphazardly. They make me cringe. But they do not want to invest in learning the ins and outs of getting the highest and best use of their points some of them even buy toasters with their points. Then there are the folks who invest time and effort in extracting everything they can with the smallest input. (You know, cockroaches). The former participants may be the more attractive customers for frequency denver car rental programs. I do hate to say it. Revenue-basing seems to be about those people.
I do take some solace, however. Jet Blue, Southwest and VA of course have revenue based programs. But, with the exception of first class on VA, none of them have that much to which one might aspire. No upgrades, no free premium travel, no partner awards. A glorified rebate is more logical for them. And I do wonder what the alliance