Monday, June 16, 2008

Next Vista: Frequent Flyer Miles

USAir has eliminated bonuses for its preferred level members of its frequent flyer program ( USAir's rationale: the cost of mileage redemption is a cost they can no longer afford to incur. This is the death knell for "loyalty" programs. Given the monkey see, monkey do management style of the large American airlines, we can expect the others to follow suit. When this happens, I guess they're all concluding this is a zero sum game. For every passenger I retain, the other airlines are retaining someone else, so if we all lower our benefits, there's no net change. If you take JetBlue and Southwest out of the equation, that's probably true. American, United, USAir, Northwest = zero sum game. Lowering their marginal attractiveness just moves more business elsewhere.

I haven't booked my next flight to the Bay Area for July...but if I believe anything that I've written, it's going to be on JetBlue or Virgin America.

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