Tickets for Free

[Dea Certe]

I''ve been talking to a number of passengers who tell me they haven''t bought an airline ticket for some time. They get miles for using certain credit cards.
How does this work and what does US Airways get in return? A hotel van driver told me he and his wife were planning a trip to the Caribean soon. He says they charge everything from utilies to groceries on their credit card, being careful to pay off the bill each month.
I don''t see what the advantage is to US Airways revenue. Do the credit card companies pay US Airways a little something?

 

[dfw79]

IIRC, the CC companies such as First USA and Bank of America all pay X dollars for X number of miles.

 

[ITRADE]

[blockquote]
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On 1/18/2003 10:07:19 PM Dea Certe wrote:

I've been talking to a number of passengers who tell me they haven't "bought" an airline ticket for some time. They get miles for using certain credit cards.

How does this work and what does US Airways get in return? A hotel van driver told me he and his wife were planning a trip to the Caribean soon. He says they charge everything from utilies to groceries on their credit card, being careful to pay off the bill each month.

I don't see what the advantage is to US Airways revenue. Do the credit card companies pay US Airways a little something?


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[/blockquote]

US gets paid a certain amount for the miles that the affiliate companies offer to FFs. I can't imagine that is more than $0.01 per mile.

However, that can add up to a fair amount of money for all the US FFs. For example, I charge about $25,000 a year on my BofA card. Assuming the $0.01 is accurate, that is an additional $250.00 in revenue for US each year.

The programs gain exposure for the merchant, gains revenue for the airline, and increases brand loyalty.

 

[RowUnderDCA]

This is interesting. Regarding the DL/NW/CO and U/US proposals, I believe that the media focuses on the code-share, but the decision makers (or at least the bureaucrats, if not the pols) at DOT and DOJ consider the effect of the frequent flier programs in their assessment of anti-competitive effects.

I agree that the FF program's 'quasi-merging' is a more important aspect of the so-called 'code-sharing.'

If DL/NW/CO decide to go through with their deal, could U/US consider total merger of the ff programs? Or better yet a "StarMiles" program. I imagine that it would work like this:

U and US offer one variety of bonus miles. Since I think Dividend Miles is a better brand and product, let's call them "new DM".. (by the way they'll be tax-free under Bush's tax boondoggle [!)

When any carrier wants to award a customer a new DM, they send 2 pennies to the DM center.

When a customer wants to redeem their new DMs, the DM center sends the company carrying the pax 3 pennys per new DM redeemed.

Each company determines how many new DMs to award and what product to award per new DM redeemed.

Expand to all of the Star Alliance and there will be no DL/NW/CO advantage... until they do it too.

Is this even possible or feasible? Surely, very frequent fliers have thought of this, right?