The Times reports what most of us with frequent flier miles already knew: it’s really hard to use them. With loads of miles outstanding, and airlines selling more and more of their (uncomfortable) seats, people with stockpiles of miles will have difficulty booking a seat on that New York to Paris non-stop. Frequent flier miles have been devalued.
What may be less obvious is that this devaluation may have concrete effects on the average non-frequent flier. Frequent flier miles were initially designed with one key purpose in mind: encouraging brand loyalty among road warriors. To the degree that these miles are now devalued, you might think that frequent fliers now have less of an incentive to stick to particular carriers. But that simply can’t be the case. Instead, airlines are substituting new bennies for the true frequent fliers – people who actually spend cash on plane tickets. They’re giving them seats on aisles, in exit rows, near the front of the plane, and in slightly more spacious sections. And who does that hurt? The rest of us, of course! Because in the old days, we all got a shot at good seats – but the frequent fliers racked up serious miles. Now we all get a shot at accumulating miles, but frequent fliers get the good seats.
Airlines are the winners here, of course. They get compensated for all the decreasingly useful miles they sell to credit card companies, hotels, and florists. They hold on to the frequent fliers by doling out something that costs them near nothing – aisles and exit rows. And the rest of us pay more and more to sit in the middle seat.
This is good thing for the airlines, of course everybody wanted to have comfortable seat in having their flights. So the thing here is the airlines are not affected with the inflation and deflation that as continually goes with the marketing industry. Paradoxonomics are when good situations have bad results, such as if you avoid payday loans and end up getting a bounced check fee that ends up costing you more than you would have, had you just taken out the payday loan. Deflation is a similar thing – deflation within an economy is when the values of goods declines and the value of currency go up. However, there's a big downside: with deflation comes higher unemployment, as employers are forced to let go of employees in order to cut down on operating costs because revenues have fallen. There is good news, however, and that is that the chances of the recession leading to deflation are minimal.