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NYTimes: For Frequent Fliers, Awards Seem Scarce
Question:
>Doesn’t Southwest have a reputation of generous award seat availability, >perhaps due to its quick expiration of frequent flyer credits which >limits the "inflation" of its frequent flyer credit "currency"?
If Southwest goes where you want to go (domestic only), they clearly have the best program. If a seat is available, you can have it, subject to just a couple of blackout days each year. tickets are good for up to 12 months after being earned.
Response:
> Wasn’t it a few years ago that the Economist magazine had an > editorial suggesting that inflation was likely in airline mile > "currency", due to the ever increasing amount of it ready to be used?
Airline miles Frequent-flyer economics May 2nd 2002 From The Economist print edition One of the world’s main currencies is heading for a fall THE world has a new international currency: frequent-flyer miles. Launched exactly 21 years ago, they are a lot like money. Collectors check their mileage statements as keenly as their bank statements. American courts often place a value on mileage balances in the course of divorce settlements. In a recent poll of frequent travellers, two-thirds said that they see frequent-flyer miles as the next best thing to actual cash: almost half even thought they should earn interest on their accounts. Will they still be as keen a year from now? Maybe not. This peculiar new currency has not been well-managed. Devaluation is on the cards. Frequent-flyer miles started as a marketing gimmick, but they have become a lucrative business. Airlines sell miles to partners, such as credit-card companies and car-rental agencies. Roughly half of all miles are now earned on the ground, not in the air. This makes them ever easier to acquire. At the end of April, the worldwide stock of unredeemed miles was probably close to 8.5 trillion (see article). Miles can be worth anywhere between two and nine cents apiece when they are used to buy an air ticket. Valued at the mid-point of this range, the total global stock of frequent-flyer miles may now be worth almost $500 billion. Comparing this with all the notes and coins in circulation around the globe, frequent-flyer miles could be said to be the world’s second-biggest currency after the dollar. Indeed, at its present pace of growth the stock of miles is likely to overtake the physical stock of dollars within two years. Of course this ignores the much bigger stock of dollars sitting in bank accounts. But frequent-flyers care more about liquidity