Will FF programs suffer high oil prices?

[Harpoon]

It has occurred to me that when times are tough in any business or industry as a whole, it's often the 'non-essentials' that go first in cost cutting. It's been made clear already that by cutting the least profitable routes, it's the best way to save for airlines, which is a no-brainer anyway. But I find it difficult to see that many airlines won't look to their FF programs to cut costs further.

So do you think that given current oil prices and airline industry announcements of cost cutting, will FF programs remain unscathed? Will they feel the wrath of oil prices soon?

For example, are we likely to see:
- Airline lounges - closures or perhaps less free food/drink, fewer open hours etc.
- Cuts to award seat availability (this one seems obvious to me)
- Staff cuts: Number of customer service staff at airports, less 'priority' checkin counters
- Less leniency on extra baggage for FF's. Not so much 'pay for baggage', but less of the old.... 'look the other way at check in' by staff if you have 60kg as a J pax.

Cutting out the least profitable routes is an obvious money saver, but should we be worries about our "FF perks"?

 

[Travel Guru]

- Airline lounges - perhaps less free food/drink, fewer open hours etc.

I should hope not, the lack of food currently is a disgrace, anything less will be pitiful.

As for the rest of your points, i'd think costcutting wise they'll look at redemptions, staff numbers and leniency on baggage restrictions (not cutting in restrictions) before they'll look at diluting benefits for their premium flyers such as the lounges which is what keeps a stronghold on a large, rather loyal corporate client base.

It shall be interesting to see what Geoff and the gang come up with.

TG

 

[Fluid-Flyer]

- Airline lounges - closures or perhaps less free food/drink, fewer open hours etc.

Unfortunately probably correct, but I have a real problem with this.

As it becomes more expensive to run the jets in the sky, and airlines try and jam more of us (with less bags) into smaller spaces & raise fares, it would seem reasonable that a savvy operator would try and placate us on the ground, where it costs less to do so!

Problem is many airlines tend to see their lounges as a “cost centre”, one they endure operating because it keeps their high-yield customers coming back. I feel (and I’ve said it before) that airlines need to look at their lounges as “profit centres”. (More like how it’s done in the USA.) A change in focus would energise lounge management to better serve their customers, and enable airline management to make (appropriately valued) adjustments about whom they are willing to “comp” (pay entry for) versus those they expect to pay their own way. It might also enable bigger & growing lounge networks, full of (decentralised) adaptive lounges, that would be focused on delivering local value (which may even help generate additional business for the airline).

BUT MOST OF ALL… the lounges could be seen delivering dollars to the bottom line, instead of taking them away!


P.S. I DEMAND A DOMESTIC AIRLINE LOUNGE ON THE GOLD COAST AFTER AUGUST!

 

[Travel Guru]

P.S. I DEMAND A DOMESTIC AIRLINE LOUNGE ON THE GOLD COAST AFTER AUGUST!

I've been demanding vegetarian food in the lounge for a while without success, lets hope you have more success with your demand, though i won't hold my breath

TG

 

[simongr]

But I find it difficult to see that many airlines won't look to their FF programs to cut costs further.

So do you think that given current oil prices and airline industry announcements of cost cutting, will FF programs remain unscathed? Will they feel the wrath of oil prices soon?

Given the redemption of points is a revenue generator for QF not sure they will cut back on redemptions - maybe they may cut points earning such as status bonuses.

 

[NM]

One benefit of less people flying may be more availability of award seats. With empty seats they can take the opportunity to reduce the outstanding FF points liability and still make some money by charging fuel fines for award redemptions.

 

[drron]

Well FF programs have already suffered.Increased fuel fines mean forking out more cash for awards.Cutting destinations and flights has to mean less actual award seats with some decrease in choice.
If there are any other adverse effects possibly reduction in bonus points especially for lower priced tickets.