Combined with all the travel I've been doing lately (see my post above on "Democracy in America"), this article by Ron Lieber in yesterday's New York Times got my juices flowing about a subject that I'm close to irrational about to begin with: frequent flier programs.
With the exception of one mid-day, mid-week trip between DC and New York, I haven't been on one flight in the past six months that hasn't been close to or completely full. Many of these flights were oversold. Cancelled afternoon flights meant that passengers had to wait until the next day because there were no other flights to the same destination that day or, if there were, no seats were available.
Yes, I know the summer is a heavy travel season. But I also know that the airlines are planning substantial cutbacks in the number of flights starting in September and that the number of seats will be reduced at the same time that demand is falling.
So...
1. Frequent flier programs theoretically reduce the number of revenue-producing seats per flight.
2. Does that mean that the price of each remaining seat on each flight is increased to make up the difference?
3. If, as we've been told, the number of frequent flier seats is reduced or eliminated as the demand for revenue-producing seats on a flight increases, does that mean that the higher price per seat that was based on the existence of nonrevenue-producing seats results in higher overall revenue than would otherwise occur?
4. If the number of overall seats decline as flights are reduced, does that mean that there will also be fewer frequent flier seats per flight?
5. If that's the case, will the pricing per seat be changed to account for the higher number of revenue-producing seats, or will the airlines continue to assume that pricing should be based on the same number of frequent flier seats?
6. Finally, if the price per seat is based on frequent flier seats that don't exist, wouldn't all fliers be better off if the programs were just eliminated?

Frequent Flyer Programs = Risky Debt
You agree to the fare and the frequent flyer credits when you buy the ticket. You don't know the exact value of the frequent flyer credits until you use them. So you have an asset whose value depends on the operating status of the airline--you are a creditor.
Some people are better off in the presence of these programs. I'm thinking of folks who fly enough so that they can use the FF miles on first class tickets. Some people are worse off than if the airlines competed only on the price of the ticket.
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