Friday, April 17, 2009

Airline Miles as Currency

Being an engineer (and working with many of them) there are a lot of pauses which become awkward silences. Given enough time, my mind starts to wander into places that most people would consider odd. Not surprisingly these two events intersect quite often. My lunches are the most time I get to freethink during the average workday between all the attendees looking over eachother's shoulders trying to not get caught holding up the conversation and the munching of calories as soon as the food arrives.

My boss and I decided that today was burrito day. He likes to use his credit card at the burrito place so he can earn double rewards on his Discover card. This sparked today's thought.

The thing people lack more than anything in my view is patience. They would rather use resources (money, credit, points) sooner for tangible gratification now than holding off and waiting for something possibly better down the line, which may or may not ever come.

Airlines use frequent flier miles in order to build brand loyalty, and in my view could do a better job to instill that loyalty. I almost prefer not to "earn" them as I know when times get tough, the member rewards programs that companies offer are often the first to go. I am even unsure if there is some sort of airline mile inflation that make redeemable ticket further and further away even though the earning potential remains constant (one mile of flight = one mile point.) Perhaps this is to entice you to sign up for a bonus mile credit card or something of the sort.

The whole point of the program is to give you an incentive to fly with one airline rather than flying with the lowest cost option every time you need to travel. It would seem that airlines could ammend their program to give those with frequent flier miles the option of spending those points on something else rather than holding out for free hotel rooms or flights. Some flights offer in flight TV at an additional charge, as well as premium beverages and snacks which all cost real money.

Why not offer airline services (In flight services, premium seating, additional bag fees) in exchange for airline points as an alternative to paying real money? This all depends on the marginal cost/revenue of these services in relation to the things they currently offer, but it would promote brand loyalty as well as hook those people who don't fly enough to save for a free flight.

I know my boss was sold on the idea if he could watch TV on the plane for free if he could give up some of his earned miles on a flight. I know I would if we could work a resonable Hi-Wifi deal or something. I could farm something I needed in WoW rather than do a sudoku, or kill some brain cells watching TV.

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