60,000 Miles to Fly to Atlanta?
by David Rosen | Senior Vice President
This falls into the category of “do I really still care.” Today Delta announced that it was adding a third tier for both domestic and international frequent travel redemption which allow its member access to “the last seat.”
OK, let’s review. Airlines actually make money by selling frequent flyer miles to banks, hotels, large corporations, mortgage lenders — and we’ve been soaking them up for years. In the process, balances have grown though available seat capacity for award seats has remained flat. Essentially a supply-demand imbalance. So, what logically happens? Prices go up. Delta’s new pricing allows its members to book any available seat on any open flight — this is equivalent to paying full-fare, last minute rates. United has been doing this for years — it’s called “premium” and is priced at 50,000 versus a much harder to get “saver” ticket at 25,000.
So, Delta one-upped them and boosted the price by 10,000 miles. How soon will the others respond? Is this the beginning of the end?
Here’s a suggestion… Price frequent flyer seats based on what the flight costs. It’s fair, it’s easy to understand and it makes sense for the carriers. Stay tuned — there has got to be someone thinking like this.
