>Even assuming 1%, for an airline to lose $10,000 in profit, you would have to be spending $10,000 / 0.01 = $1M per year on that credit card.
I think you missed the part where they're losing ALL of my business, including dozens of flights a year.
>I assume there are lots of smart people working at airlines that can work out which of their policies earn and lose money, especially now that all the competition is minimal except on the most popular routes.
I assume they think customers with lots of miles banked won't go through the effort of dropping them entirely. I think they're wrong.
When you're losing customers that have million miler+ status, you've made a pretty poor decision.
> I assume they think customers with lots of miles banked won't go through the effort of dropping them entirely. I think they're wrong.
I agree with you on this. Nobody who flew Delta did it for the value of SkyPesos anyway. The airline miles on Delta have historically had the lowest value among US major carriers and that hasn't gotten any better, so frankly I have no issue giving up my miles. I flew Delta for better hard product and a better set of co-brand + FF perks. By changing the latter, the difference on the former is mostly ameliorated, and the miles are basically meaningless. At most a skypeso is worth maybe 1 cent. A million skypesos is only worth $1k in EV, and that's being generous. A one-time cost of $1k that isn't even a fully realized loss (I can always use the miles later without seeking status) is nothing compared to the betrayal of the program changes.
Mostly agreed, but still ... I used to fly United/American from PHL to LHR all the time because .. well, its a hub city and I lived there and they were the best deals and had convenient departure times for the transatlantic crossing.
Then I moved to New Mexico, and found that Delta was the obvious choice for getting to London from here. And OMFG ... the difference in the product was just spectacular. Seats. Food. Movies. Uniforms. Air quality (not kidding). Probably will still use them when I do this journey.
Domestic flights it's a big difference, but for international flights if you're in Polaris at the front of the bus, United is actually better than Delta, although the United food is pretty horrid even in Polaris. The best news though is with United you can fly Turkish Airlines, Lufthansa, or Singapore Airlines on United. Singapore Airlines has the best business class hard product in the world. United and their partners also heavily operate 787s, which are great for noise and air quality.
United domestic routes are disgusting though. Most of the planes are falling apart CRJs without IFE and WiFi, and if they do have WiFi they charge you for it, and the domestic United staffers are not good. I would put United service quality on-par with Spirit or Frontier. Easily the worst in the big 3.
That said, I'd still rather develop status on United, take directs, and then fly Polaris full-fare or Singapore Airlines biz class for my personal / international trips now that Delta has made these changes to the medallion program.
I guess we will have to let it play out and see. I’ll take the bet that the same airlines that exist today will be there earning the same measly profit margins in 10 years (except JetBlue, which may not be around).
10 years ago there was USAirways and Continental, and Northwest a little before that. Reduced competition buoys the remaining survivors, but the history of bankruptcies in the industry certainly lends quite a bit of doubt towards your assumption.
The assumption is that as they become fewer, the ones that remain gain staying power. Which is why I excepted JetBlue since they could get sold or fail, I think they are hoping their Spirit purchase goes through.
Crazy to think JetBlue wanting Spirit. I remember when JetBlue started, their goal was to provide a better experience than all the other airlines. It is really a cutthroat business. Virgin Airlines had to be folded into Alaska too.
I think in many cases they are just buying routes/gates. If the airports are maxed out in gates how is the company supposed to grow? And a company that doesn’t grow is a “bad” company, or at least management doesn’t get paid as well for high profitability/low growth it seems
I think you missed the part where they're losing ALL of my business, including dozens of flights a year.
>I assume there are lots of smart people working at airlines that can work out which of their policies earn and lose money, especially now that all the competition is minimal except on the most popular routes.
I assume they think customers with lots of miles banked won't go through the effort of dropping them entirely. I think they're wrong.
When you're losing customers that have million miler+ status, you've made a pretty poor decision.