FF miles amount to a 15% kickback

Rohit Khare (khare@mci.net)
Wed, 27 Aug 1997 18:55:20 -0400

> Delta Air Lines SkyMiles members spend more than $3,600 to
>earn one 25,000 mile reward, according to airline officials.

Which is ~$500 worth of value to the customer, hence a 15% rebate. As
usual, the breathtaking audacity is in rewarding the kickback to the
*traveler*, not the *purchaser*, which is a piece of disintermediation I'm
all for...

The other interesting derived statistic is that this implies a minimum
average of 14.4 cents/mile in revenue, probably higher because of bonus FF
miles. But remember, the majors' cost/seat/mile is already >> 10 cents, so
it's a vicious business. WN is at 7.5, still the lowest.

Of course, at the other extreme, two weekenders to LA adds up to 30,800
miles, $616 worth of mileage in exchange for 2x$298 = $596 in fares.

Rohit "442k miles, expiring by '99" Khare

Rohit Khare /// MCI Internet Architecture (BOS) /// khare@mci.net
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