As more and more airlines struggle with profitability, one of the issues on the table seems to be the frequent flyer programs.
I frequently travel as a "real person" (buying a full fare ticket), and belong to a couple of these programs. On occasion, I've even cashed in my miles for a free ticket or two. Lately I've been reading that a lot of these programs may be changed, and it seems to be in a way less advantageous to us travelers.
When I talked with crew members about the state of the industry, one of the consistent questions is why we are giving away so many tickets. Why are members of our frequent flyer program allowed free upgrades? (Rarely is it that I see a full fare passenger in first class; they are usually all upgrades.) And why, when they aren't available, do the expect their free amenities to be provided to them in coach class? Why are we providing so many seats to be used for miles when we can't fill the ones we have with paying passengers and make a profit?
All these are legitimate questions, and even though I understand the marketing and branding value of frequent flyer programs, it makes me wonder about their viability at a time when air travel is so cheaply priced.
Then I come across this Reuters article which explains how the airlines sell their mileage credits to a variety of sources, including hotels, restaurants, credit card companies, banks, car rental companies, etc. Turns out this sale of miles yields a very big influx of cash to the airlines. It's a billion dollar a year business.
Air Canada has spun off their loyalty program into a separate business unit, raising some 250 million dollars in cash. Although no U.S. carrier has announced a similar plan, yet, there appears to be potential for such a move.
Looks like we're not just in the transportation business anymore.