A switch to a revenue-based frequent-flyer program from a
miles-based model causes a loss, though a negligible one, in points earned for domestic
U.S. flyers, according to research released this week by
PricewaterhouseCoopers.
Examining mainland U.S. domestic routes on the 11 largest
U.S. airlines, the PwC study determined that travelers on average earn 45 fewer
reward points per one-way trip when accrual is based on dollars spent, the
scheme adopted this year by Delta Air Lines and United Airlines, rather than
mileage flown. However, the switch will more deeply affect a clear set of "winners"
and "losers," according to the report—and both groups include a
subset of corporate travelers.
About 40 percent of travelers will earn more points through
revenue-based programs, with about half of those averaging more than 1,000
points more per one-way trip than they would have earned on a mileage-based
program, according to PwC. That group includes premium-class travelers,
business travelers driven by schedule more than price and frequent short-haul
travelers.
About 45 percent of travelers, meanwhile, will earn less
from revenue-based programs, with about half of those earning on average 980
fewer points than on a mileage-based program per one-way trip, according to the
report. That group includes travelers who frequently fly nonstop routes and
travelers who tend to buy tickets well in advance.
The remaining 15 percent will see little change in point
accrual regardless of the program type, according to PwC.
PwC transportation and logistics practice leader Jonathan
Kletzel said while it's possible that a switch to a revenue-based program could
drive some business travelers to change booking behaviors, most would not be
motivated by a small improvement in miles earned to do so.
"You might see—with those companies that spend a little
more money on business travel—see people trying to optimize their mileage via
last-minute purchase or maybe moving from nonrefundable to fully refundable,"
Kletzel said. "But if you look at what the high-end frequent flyers value,
it's typically more about the status and experiential benefits."
Revenue-based systems will function more to discourage "gamers,"
he said, such as those who search for cheap, long-haul fares solely for the
purpose of building up points. "If you get rid of those folks, the amount
of gaming that's going to happen [with revenue-based programs] is fairly
limited."