With all the miles being printed by the banks, it’s only a matter of time until we hear about an airline experimenting with yet another currency targeted at only their elite passengers. And that will be the only way to redeem for a seat in front.

Delta: So innovative it hurts!

My money is on Delta. After all, they pioneered the concept of Mileage Qualifying Dollars and increasing the tiers of awards from 3 to 5 in 2015.

While my general view is that status is dead and have been advising friends, family and clients that they should just become a mileage free-agent — earning a ton of miles across all carriers to insulate themselves from devaluations and redeeming them on whichever carrier is the most convenient in a premium cabin.

The airlines have historically been great at removing perks for elites and even average flyers alike (like… food…) listening and “reintroducing” them as an “enhancement.” Why not eliminate the ability to fly business class and only make it attainable by redeeming MQM’s? The airlines have effectively beaten any loyalty out of us. I tell ardent United and Delta flyers trying to prequalify for Gold to look at their past treatment as a predictor of any future relationship. Most just land at silver and get a few credit cards on a Saturday. It’s easier.

With all the miles being minted by banks, there may be a breaking point. Brian Kelly, a.k.a. The Points Guy, speculates that there aren’t enough flights for all outstanding United miles to be redeemed without some expiring. So trading them in to buy MQMs/PQMs to access business class might be an idea they’d entertain. After all, Swiss and Air France both restrict first class redemptions to only elite members in their frequent flyer programs, at higher rates and with fuel surcharges no less.

Moreover, most flyers wouldn’t notice. A vast majority of redemptions (both in tickets and miles) are used for domestic coach awards, with international premium cabin redemptions accounting for less than 10% of all tickets. Our group isn’t hugely vocal or influential in the grand scheme of things.

Ok, so hopefully by now I’ve scared you. Because it’s really unlikely to happen.

Banks are Still in Control

Banks are typically way bigger and more influential businesses than airlnes. Makes for an unequal partnership when the airlines need financing.

Prima facie, writing down the value of miles, even garden variety devaluations, tend to piss off the banks that hold a large quantity of those miles. Chase is easily the biggest holder of United miles, AMEX the biggest holder of Delta miles.

Furthermore, redeemable miles are immensely profitable for the banks and the airlines, since they are buying up large tranches of distressed inventory (saving the airlines from rocky quarters or even bankruptcy from time to time). Keep in mind that a pittance of miles bought by a bank say $50M worth, is enough to swing an airline from the red to black in any quarter or year. Yes, they are capital intensive businesses, but airlines have also suffered from fairly unsophisticated leadership and are rounding errors compared to the level of sophistication of banks. Credit cards are big business, and promising a free flight sometime off in the future (that will likely get redeemed inefficiently LAX-LAS) is a promise they are more than willing to make.

Airlines are Horrible at Monetizing their Premium Cabins

Save your agony and credit miles to Singapore or TACA and use them to redeem on other Star Alliance partners. UA biz isn’t worth it!

If you fly enough with international carriers, you’ll notice that business class cabins are rarely full and that first class cabins at best are usually 50% full. The US carriers are a little better at monetizing those cabins due to system-wide upgrades and slightly less outrageous upgrade miles surcharges/lack of fuel surcharges (and more miles floating around), but reducing access to what is, by nearly all accounts, a competitively inferior product, is going to mean more seats going out empty.

There’s room for a whole discussion on “protecting” premium products and Gary has talked at length about silly notions that carriers are “protecting the exclusivity” of their product by letting half their seats go empty. Needless to say, having fewer people in the cabin is going to be a marginal improvement to those flying revenue tickets or super elites that would benefit. Intangible benefits don’t play well when the CFO needs dollars produced.

Furthermore, when Delta tried to better monetize the cabin by pulling complimentary upgrades, they ended up with lots of empty seats and irate Platinums and Diamond medallion flyers. Nobody was willing to pay the price they were charging and they have since relaxed the policy quietly.

Moving Too Far Creates More Opportunities for Competition at the Luxury and Discretionary Spender Levels.

I’ve met two types of groups that have opted out already. The first are those who are on the cusp between flying private or paid international business and first fares. They tend to laugh at airlines tripping over themselves to provide a decent meal and wine that didn’t come from Safeway (it’s RED wine, sir!), while using terms like “exclusive” and “valued”. Sure they have a ton of miles and spend them pretty loosely, paying double miles for last seat availability, and not usually in coach. But adding more hoops or roadblocks to booking is only going to drive these folks away, not towards the airlines.

These people are getting lured away from traditional carriers and inconvenient schedules and policies with new services like XOJet, Surfair (even La Compagnie, teething pains aside) and a few other time-sharing semi-private services out there. It’s not like these services have to even provide that much nicer of an experience, they just need to do less poorly with less hassle.

But airlines use business class and first class as the “illusion of luxury” to lure casual spenders like you and me to spend money with them too — for that extra trip to Florida to visit the family at the end of the year — in exchange for flimsy promises of recognition, some random number of upgrades between zero and every flight you take. You don’t know. Neither do they. I bet your estimations would be pretty far off though. Sure, getting a domestic upgrade is nicer than coach, but don’t expect it on Mondays, or Thursdays, or getting better food than what you’ll get microwaved at Olive Garden. It’s about promises far off in the future. The reality is I don’t get excited to fly US carriers anymore. It’s an experience to endure. I AM excited to fly folks like Cathay, Singapore and Emirates in ANY cabin.

But these changes drive people away that would have considered flying that additional amount. Now that Silver or Gold medallion is pulling up Kayak instead of Delta.com. People hitting even low and mid-tiers of status likely have considerably more discretionary income than your one off flyer. They take more trips and are actually tempted to pay for business class if the price is right (it rarely isn’t, see above). Changes restricting the opportunity to take a baby moon, or to go for a Michelin star dinner in town or pushing someone towards Southwest is not money in Delta’s pocket.

Competition internationally is increasing and credit cards are soon to follow

Cathay Pacific is happy to fly you to Asia (and hopefully eventually transcon). And you get to transfer Citi Thank you points to BA or CX, avoiding the need to interact with anyone at a US carrier.

This one is awesome. As US carriers degrade their programs, there are international carriers eager to snap up your business. In addition to credit cards being offered by BA, Korean, Asiana, LAN, TACA we’re seeing route network deployments never possible before. I can fly direct from SFO to Dubai, Abu Dhabi, Istanbul, half a dozen cities in Europe and even more in Asia, without even having to endure the hoops and hurdles of US carrier’s programs (and certainly not their products) anymore. They’re literally being cut out of the system. Hopefully consolidation will begin to put more pressure on regulators to review open skies agreements with European carriers. Domestically, I’ll spend my dollars and points with Virgin America and Southwest.

Congress is on our side (Scary, Right?)

Furthermore, for what it’s worth. Members of congress are frequent flyers due to the necessities of their jobs. While airlines gift them status, they tend to get ornery when changes in programs swing wrong for them. If access to business class was a product of spending, they may get more closed doors from phone agents. That bodes well for distributing gate slots and makes fortress hubs and airlines a nice scapegoat target. It’s not like politicians like to use populism and accusations of monopolistic “big business” to get elected.

Travel Hackers and Flyertalkers will always be able to outsmart their airlines

Lastly, this almost goes without saying, but the folks reading this (yes, you!) are inherently better at navigating the system than the airlines are at writing it. We’re also huge PR for them, positive and negatively, signing up credit cards and influencing a lot of people where to do their travel spending. While there’s whinging here and there when a change forces us to course correct, there are so many opportunities out there that hopefully even that headline didn’t scare you.

Hope you enjoyed this thought experiment! Disagree? Comment below!