March 10, 2006By: Mary Winston Nicklin
The Farce of Frequent Flier Programs
Apparently 14 trillion unredeemed miles are floating around the black hole of frequent flier programs. According to the IHT's fabulous piece "Earning Miles: Is It Worth It?":
Since American Airlines introduced AAdvantage 21 years ago, an estimated 124 million travelers worldwide are busy counting miles with one or more of the 140 airline programs, many of which have scores of airline and non-airline partners, such as hotels, car rental firms and credit cards... Many airlines make money from the programs by selling miles to their program partners. United Airlines is said to generate more revenue from "Mileage Plus" than it does selling airline seats. Likewise, American Airlines with its "AAdvantage" program. Frequent-flier programs enable airlines to build a database of travelers, especially very frequent travelers, with the opportunity to build a direct relationship with them.Could this really be the most successful marketing idea of all time?