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Airlines
Are frequent flyer programs just a scam?Posted by Jeremy Goldkorn on Friday, March 7, 2008 at 6:46 AM
One of the current advertisers on Danwei is Cheung Kong Graduate School of Business. On Sunday they are hosting an event: a talk by Cheung Kong's Dr. Brian Viard about frequent flyer programs and other customer loyalty systems — are they actually of any benefit to the customer? Your correspondent is inclined to think that frequent flyer programs are marketing tools from which only very wily or very patient customers can get any benefit. After many years of flying with no airline cards and being told I was an idiot, I joined several frequent flyer programs. Having finally accumulated enough points to go somewhere, every time I try to use them, it seems the plane is already too full of frequent flyer cheapskates, I am too late, it's the wrong flight, no sir, you have to pay cash for this one, sorry. The Cheung Kong talk will cover a variety of industries in which companies are using customer loyalty programs to avoid having to slash costs and compete on price alone, and ask: To whose benefit? The talk is on Sunday March 9 from 2:30 - 5 pm at Cheung Kong's campus in Wangfujing, Beijing, from 14:30 – 17:00. You can register for it here. Disclaimer: Cheung Kong is a regular advertiser on Danwei.org. |
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Comments on Are frequent flyer programs just a scam?
I have several frequent flyer cards.
I use the points for upgrades on long-haul flights, and "free" tickets when I have the ability to book travel at least 6 months in advance.
I imagine over the long term I've done probably slightly better than even, as to keep my points "topped up" I will often choose a flight that's up to 5% more expensive just so it's on one of "my" airlines. But 6%+ and I choose a competitor...
Trying to use points to "fly home for Xmas" (ie. at peak times) or to book less than 4 weeks in advance is usually impossible -- but then again that's not what the airlines offer them for!
But I have to say that getting a "free" upgrade on a 12+ hour flight is quite possibly the only pleasure remaining in airline travel.
I have used my points built up over the last 15 years to fly twice first class across the Pacific. Something that would have cost me around $18K otherwise. It required little or no effort on my part to do this. I think FFP's are great!
They do seem like a scam as it can be near impossible to get on many flights, or at least a seat is available in one direction but not the other.
At least with Cathay's Asia Miles you can redeem them for not just flights but also meals, hotels, electronics and, once, a subscription to the Economist.
These programs are really aimed at the business traveler, who can have his employer pay the extra money to buy a ticket on the traveler's prefered airline, regardless of cost. I have heard lots of complaints about booking Asiamiles flights on Cathay, but my own experience has been good -- free flights to Bombay and Taipei. The really important benefit is access to the business class lounge even when flying economy, faster check-in line, extra baggage allowance, priority for getting on free flights and free upgrades. Those little things make traveling much more bearable.