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Delta frequent-flier program now tied to airfare
In what marks a fundamental shift to its frequent-flier program, Delta will become the first major network carrier in the U.S. to have passengers earn award miles based on the fare they pay, rather than how far they fly. (www.usatoday.com) Más...Sort type: [Top] [Newest]
This sets up a conflict of interest for business travelers whose companies pay the bill. Previously the traveler did not have a vested interest in how much was spent on his ticket. He got the same rewards regardless of how much was spent, but his company benefited from a lower fare. With this change the traveler now gets greater rewards for his company spending more. The traveler's interests are now at odds with his company's interests.
Bad as some may disagree, I'd say it's about time. Any freebie, for whatever industry, should be tied to revenue derived from a service, especially where there is different pricing between the same points such as these.
Revenue is the measure of profit and loss for about any industry; in this particular case, all miles are not equal as far as $ go.
I agree completely with your logic, however it is unfortunate that those who are smart with their money are now getting less reward, while fools (ie people who purchase tickets the day before their flight, most corporations) are being rewarded for their stupidity.
If you were a business owner you would cater to and give more advantages to those who spent more money with your company. For instance, would you give a free flight to someone who was a one time customer who paid $250 for a ticket or a repeat customer who paid $6,000 for a fully flexible ticket. It only makes sense.
If you are paying 6 grand for a ticket, first you are an idiot , two you may want to think about a jet card for private service! And three screw the "elite" status money in the bank is much more important!
That competition that private aviation provides in the high end likely underlies the need to redirect loyalty programs to those passengers, whom it makes more sense to retain.
On the lowest end, most airlines likely find that pasengers looking for the lowest fare are the least loyal. They'll do best to retain these passengers by reducing costs (like rewards programs) and just offer them the lowest possible fares upfront.
That's besides all the economic reality of tying bonuses to the revenue that customers bring, like in every other industry.
There will e some complaining and noise making during the transition. But eventually the entire industry will move to tyin the rewards to revenue. All of Delta's smaller lower cost competitors already tie their loyalty programs to revenue. Delta is mererly adopting the innovation that is percolating from the bottom up. Lower costs for rewards programs and lower base fares.
On the lowest end, most airlines likely find that pasengers looking for the lowest fare are the least loyal. They'll do best to retain these passengers by reducing costs (like rewards programs) and just offer them the lowest possible fares upfront.
That's besides all the economic reality of tying bonuses to the revenue that customers bring, like in every other industry.
There will e some complaining and noise making during the transition. But eventually the entire industry will move to tyin the rewards to revenue. All of Delta's smaller lower cost competitors already tie their loyalty programs to revenue. Delta is mererly adopting the innovation that is percolating from the bottom up. Lower costs for rewards programs and lower base fares.
Well, you are correct in that there is nothing free and these will just be paid for by those that can afford it. The killing is made off short notice travel. The airlines know that is the nature of the beast in corporate travel. Now though, some of that is going away what with video conferencing and all. My bunch just set up a corporate office for a man in Northern AZ that had 12 plants. Beginning of the day is a video meeting with all of them tied in. Just like being across the table.