The dream that supports the lie. (Image: Ishan/Unsplash)

OFFICIAL DEFINITION

Frequent Flyer Programs (FFPs) are the airlines’ way of giving something back to their loyal customers, to let them know that they are valued.

RAZER DEFINITION

FFPs are a virus for which there is no vaccine and from which there are few routes of escape. The merest brush with an airline will result in immediate infection; lending institutions pelt the thing at future patients in the hope it’ll distract them from the depth of their debt enslavement.

It is now carried in an always-growing number of everyday exchanges and, yes, I “convert” my Woolworths points to an FFP like a total mug.

I am in the grip of a fever dream of luxury travel that will never take place. I am Part of the Problem.

frequent flyer program
Patients infected with the frequent flyer virus. (Image: Dawn of the Dead)

WHY IT MATTERS

FFPs matter more the more closely they resemble a commodity, or the money commodity. They’re a bit like the Bretton Woods system of gold convertibility: both dollars and points were ostensibly backed by a valuable, finite commodity. But redeemable points (dollars) quickly outnumbered the available seats (gold) they could buy.

It is a deliberate decision by the central banks (airlines) to make their currencies (points) worth less, if not actually worthless. So, opting for a high-interest credit card in order to get points is like investing in a fund that promises only to ever lose you money, or swapping your US dollars for German marks in 1919.

Since FFPs now reward customers based on how much money they spend, rather than the distance they fly, points function like a means-tested welfare payment system in reverse, with the freebies awarded increasing in accordance with one’s ability to pay for them.

They might be taxable soon.

WHO CARES?

Travellers are apparently abandoning loyalty schemes in droves. We’re annoyed by things such as: the depreciation or seemingly arbitrary value of points; requirements that we obtain the right high-interest co-branded credit card; the near-impossibility of actually using points for their ostensible purpose — i.e. buying airline tickets; and the mysterious carrier-imposed surcharges that can render “free” tickets just as expensive as bought ones.

For airlines, FFPs have proved a much more reliable source of profits than flying people around, sometimes exceeding the value of the core business.

RELEVANT FACTS

THE LAST WORD

The depth of the dive needed to discover the true business of business-to-business points exchange is a guess best left to economists. But any everyday person can quickly learn that the trade has taken on a life well beyond everyday persons.

FFPs are no longer customer loyalty programs, and despite public charges by customers that the programs are themselves “disloyal” to their promise, they are likely to continue in loyalty to themselves.

It would take the simultaneous refusal by a mass to crash the mini-market of FFPs. As a revolution led by the anger of middle management seems unlikely, businesses will continue to trade in these trillions and trillions of promissory points until the last flight is hijacked by the last ticket-holder in history.

READING

Sheftalovich, Z & Castle, J (2018). Frequent Flyer Points—Are They Worth It? Choice, 9 April.

de Boer, E R (2018). Strategy in Airline Loyalty: Frequent Flyer Programs. Cham, Switzerland: Palgrave Macmillan.

Peterson, R (2001). History of Frequent Flyer Programs. WebFlyer, May.

de Boer, E R & Gudmundsson, S V (2012). 30 Years of Frequent Flyer Programs. Journal of Air Transport Management, 24, 18–24.

Reaves, C N & O’Connell, J F (2017). An Examination of the Revenue Generating Capability of Co-branded Cards Associated with Frequent Flyer Programmes. Journal of Air Transport Management, 65, 63–75.