It seems to be a no-brainer in the airline industry to have some sort of frequent flier program. In fact, people have come to expect it. JetBlue, for example, tried to go without it, but after 2 1/2 years of flying, they started their own program as well.

But a research paper released back in July called “Do Frequency Reward Programs Create Switching Costs” by Wesley Hartmann and Brian Viard at Stanford’s Graduate School of Business questions whether it’s a good idea at all. (Read a summary here.)

To be fair, the main research in this wasn’t directly related to airlines, they used a golf course that offered a “Buy 10, Get 1 Free” program, but the results are worth reviewing. In this study, they were looking to see if the program encouraged people to accelerate their playing behavior as they got closer to the reward.

They found that frequent users of the course thought the program to be very important, but their playing behavior did not accelerate as they closed in on the reward. Sure the effective discount did get them to play more, but it was because the cost was lower. A 10% decrease in price would have had the same effect without incurring the administrative costs of the program.

On the other hand, infrequent golfers did show some accelerated behavior as they got closer to the reward, but very few of the infrequent golfers played enough for that to even matter. So was it worth it?

In short, no. It is argued that the increase in play from the infrequent golfers wasn’t enough to offset the cost of giving away free games to the frequent golfers, so the program was not very successful.

They argue that the only way a frequent user program is really successful is if your most frequent users are extremely price sensitive. In that case, the loyalty program would make sense, because you would be increasing your returns from the majority of your users instead of a small minority.

Does this relate to the airlines? Sure.

In fact, the golf course admitted that they modeled their program off of Southwest Airlines’ famous Rapid Rewards program. It’s also probably safe to say that many of Southwest’s customers are price sensitive, so this might not be a bad program for them.

On the other hand, some of the bigger airlines generate the bulk of their revenue from people who are less price sensitive, so the program may not make much sense at its base level.

The difference is that those airlines have turned their frequent flier programs into more than just a free flight scheme. It would actually surprise me if most frequent fliers in those programs even cared about the miles. In those programs, it’s the elite status that matters – the product differentiators. If you’re an elite member, you get upgrades and special treatment that make it even more difficult for people to switch you.

So with that, you might consider removing miles from the program altogether, but in the world of airline economics, that doesn’t make sense either. See, airlines have found a way to turn miles into a profit center. Do you have that United Mileage Plus Visa? Maybe you’re a Delta SkyMiles Amex fan? Well, each time you earn a mile, those credit card companies pay the airlines, so the airlines can recoup the costs of handing those miles out in the first place.

In short, while the basic reward program might not make sense, airlines have evolved the programs to the point where I think intuitively they make sense but further research would certainly be required before coming to any conclusions.

Some people love open seating on aircraft while others hate it. It’s truly a polarizing issue.

Look at Southwest, for example. The granddaddy of open seating has stuck with their strategy for over 30 years. Many airlines have seen it as a negative, so they’ve tried to exploit it. In what was probably America West’s best commercial, the airline tried to say that flying Southwest was like being in a mosh pit. Click here to watch (.wmv file).

But through all of this, Southwest never budged until this summer when they decided to run some assigned seating tests to see if it was worth switching from their time-honored tradition. While many people bemoaned the open seating concept, the backlash from loyal customers was truly amazing. Look at this blog post by Southwest CEO Gary Kelly. There were 605 comments on it, most of which appear to be against changing to assigned seating. The issue appears to have quietly disappeared for now.

In Europe, many of the low frills guys have followed in Southwest’s footsteps in having open seating on board. But while Southwest has shied away from charging for every individual piece of the flight experience separately, European LCCs have embraced it. And that’s why it’s surprising that it’s taken so long for them to charge for better seating.

Now, Easyjet has announced the introduction of Speedy Boarding. Now when you buy your ticket, you will be given the option to pay between GBP2.50 and GBP7.50 to head to the front of the line for pre-boarding. It appears that this will be offered until twenty people have taken them up on it. There won’t be assigned seating, but with only 20 other people boarding in that group, you’ll have your pick of seats.

Why the range in price? Well, longer flights will cost more, of course. In addition, some flights are boarded by busses to remote stands. There is no way to guarantee that those twenty will be the first off the bus, so it’s not guaranteed. That’s why those flights will be cheaper.

It makes sense to me for the Easyjet model. The idea is to make as much ancillary revenue as possible. At least 20 people on each flight will be happy to pay more just to have piece of mind in knowing they’ll get a good seat.

I’ve let up on posting so often about new route announcements, because usually they just aren’t that interesting. But every so often an airline announces a new city and it seems to be worth mentioning.

• Remember AirTran’s promotion to let customers vote on their next city? Well, the results are in, and it looks like Phoenix is the big winner. AirTran says that service from Atlanta starts on Feb 15 with one daily flight. A second flight will begin on Feb 22 and a third flight on Mar 6. As the Arizona Republic notes, both US Airways and Delta fly the route five times a day currently.
• Frontier is also adding a new city to its route map with daily service from Denver to Hartford starting Mar 2. It’s an eastbound redeye with an early morning westbound return, so this appears to be utilization flying for the airline.
• Technically this is a new route, but in reality it’s an entirely new airline. As if MAXjet and Eos don’t provide enough premium-only service between New York and London, now Silverjet is going to join the mix on Jan 25. While MAXjet and Eos fly from New York/JFK to London/Stansted, this UK-based operation will go between Newark and London/Luton. They say they’ll have 100 flat beds on a 767-200, but considering MAXjet has 102 seats that don’t go flat on the same aircraft, I’m not sure how they’re going to pull it off. No pictures are available. You can see their website here.

I’m not quite sure why it is that Los Angeles Mayor Antonio Villaraigosa thinks that Palmdale is the answer to LA’s aviation needs. One quick look at a map will show you why it’s not going to work:

That line snaking from downtown LA to Palmdale is 70 miles long, and that’s really the only way to get out there. Any more direct route takes you through some pretty large mountains, and that’s why you don’t see much development the further north you go. Even measuring from San Fernando, just a few miles before the route turns toward the east again, you’re still 50 miles away from the airport. As a comparison, O’Hare and JFK are less than 20 miles from downtown Chicago and New York respectively while “far out” Denver airport is still only 25 miles away.

So who in their right mind would think that Palmdale would work as a good feeder airport for the Los Angeles area?

No airlines think that way. That’s why the airport has no current commercial flights. The last attempt involved Scenic Airlines props to North Las Vegas, but of course that failed miserably. In the past United Express has served Los Angeles and America West Express served Phoenix, but both have long since pulled out.

To be fair, the area is growing quickly, so I would venture a guess that it could support some regional flights to Phoenix, Salt Lake, or another western hub, but that’s going to be the extent of its success.

Unfortunately, the city of LA continues to focus on this airport as a viable alternative. Last week, the city approved a plan to request proposals for service to Palmdale. The plan includes up to $5m in incentives, including some hard cash costs that could be put to better use.

Mayor Villaraigosa said “Developing new and expanded service at Southland regional airports will go a long way toward relieving congestion at Los Angeles International Airport.” Well, the proposed regional jet flights to western hubs aren’t going to do much at all to relieve LAX. A handful of daily flights is a joke, and it’s not going to solve anything. Nobody in Los Angeles wants to fly out of Palmdale.

It’s time the city’s leaders create a plan that will expand LAX to fulfill the region’s needs in the future. Though neighbors will complain, the airport has been there much longer than they have. They should have expected airport expansion and the fact that they can prevent the region’s aviation infrastructure from expanding is mind-boggling.

I’m not sure how many of you are following the aviation scene in Brazil these days, but there have been plenty of developments related to the Gol 737 crash that are enough to frighten anyone.

For those who don’t remember, back on September 29, a Embraer business jet clipped a Gol 737 at 37,000 ft over the Amazon. The Gol aircraft crashed into the jungle while the Embraer jet was able to land safely. On that Embraer jet was New York Times journalist Joe Sharkey, who has been obviously covering this story very carefully.

Initially, the government suggested that the Embraer was doing acrobatic moves in the sky and that its reckless behavior was responsible for the accident. In fact, they went so far as to detain the American pilots of the Embraer in the country until the investigation was complete.

As more and more details come out, this account appears to be false, and the complete violation of civil liberties is frightening. The pilots have now been detained for 2 months at a hotel in Rio. They have been able to interact with family, but that is all.

In the meantime, more evidence has come out pointing to air traffic control, not aerobatics, as a major problem here. According to this article by Sharkey, the Embraer pilots has initially filed for an altitude of 36,000 ft but air traffic control has them flying at 37,000 ft instead. Meanwhile, the Gol aircraft had filed to fly at 41,000 ft, but they were being held at 37,000 ft as well. Tapes on the Embraer show that the pilots tried to contact air traffic control 19 times and they were unsuccessful each time.

After the crash, the air traffic controllers in Brazil went into a frenzy protesting the dangerous working conditions and problematic systems in use. The unrest went far enough that the head of the country’s air traffic control was recently reassigned.

Now, though it appears air traffic control was a major problem in this accident, it clearly was not the only one. As in all accidents, a trail of problems led up to the final outcome. For example, had the traffic collision avoidance system (TCAS) functioned and been followed correctly, the pilots could have avoided each other even despite the air traffic control failures.

That being said, perhaps the most disturbing thing here is how the pilots have been treated. There is little reason to believe at this point that the pilots committed a crime. In fact, they have not been charged at all in this mess. They are simply being held against their will in defiance of Brazilian law. If that’s not enough to disturb anyone, then how about this . . . according to Joe Sharkey’s blog, the general response in the country can be summed up as “Payback for Guantanamo! Serves them right for being Americans.”