[peternh]

Originally Posted by jimworcs

but it nevertheless illustrates the point that the "free" or "lower cost" flight can be illusory).

Only in the sense that driving your car into a brick wall indicates that car repairs can be expensive. Here the consumer is to blame simply for not reading the regulations and costs visible on the screen in front of him.

Originally Posted by jimworcs

In a genuinely competitive market, frequent flyer schemes could potentially be a market tool which supports greater customer loyalty without significantly damaging the consumer overall. That is not how the schemes operate in the US.

The world is rather larger than the US, and most of what you go on to say, in addition to having practically nothing to do with frequent flyer schemes whatsoever, is specific to the US. None of this supports the large claim that frequent flyer schemes are 'scams'. None of it has anything to do with the circumstances of your initial post, which quotes someone encountering difficulties IN EUROPE.

You might want to reduce your claim to the one that all US frequent flyer schemes are scams, but you offer little to support that claim either, and nothing to counter the arguments already set out and which apply to all frequent flyer schemes.

Originally Posted by jimworcs

The US air market is dominated by US Airways, AA, United, Delta and Southwest...

...and much more on civil aviation in the US. Agreed, flying in the US is almost always an awful experience, and I try to avoid passing through the US whenever possible, and to avoid travelling with North American carriers in general. The service varies between indifferent and surly, there are extra charges for in-flight services, there are frequent delays, and the airports are dismal and rarely serve edible food. But none of that is germane to the discussion of frequent flyer programmes.

Originally Posted by jimworcs

The airlines then use the incentive schemes to try and block out any new entrant or competitor.

This is a large claim. Unfortunately it is difficult to name an airline of any size other than rock-bottom budget airlines like Ryanair that has no loyalty scheme of some sort or other. It is difficult to see how in a competitive market once any single airline begins to operate such a scheme the others could avoid doing so. If just one airline offered such a scheme on a route with two otherwise similar competitors it would obviously get all the business. The existence of most frequent flyer schemes is an unavoidable consequence of the existence of a few of them.

Originally Posted by jimworcs

A business traveller based in Charlotte, would enrol on US Airways because this would allow them to rack up the most points. For that individual, this may be a rational decision, but the effect of this is market distorting and anti-competitive and against the interests of the consumer overall.

It certainly makes sense to collect points of the airline offering flights to the most destinations from where you live. But the chances are that you will fly more frequently with the airline at whose hub you live regardless of the existence of any scheme. Frequent flyer schemes are aimed at those who have a choice, not at those who don't, and of course most of the world doesn't live at airline hubs. Your argument appears to be a criticism of the hub and spoke system rather than of frequent flyer schemes which are the flea on the dog. There is no evidence here that they are scams.

Your argument also completely ignores airlines' memberships of larger groupings. Where I'm currently based the airline with the most direct flights is Air Canada, an airline I like to avoid whenever possible. Indeed, I mostly board Air Canada flights only when spending points collected elsewhere. You're also ignoring the points collected through other means than flying, and the frequent flyer schemes that are not airline specific or that offer service with several different airlines (e.g. Avion in Canada, Avios in the UK, Air Miles in several countries). Even if they were otherwise valid, your arguments apply to none of these issues.

Originally Posted by jimworcs

It changes consumer behaviour in a way which seriously undermines the market. Instead of purchasing on price or even convenience, the consumer makes purchasing decisions based on "perks", which have predominatly been purchased using someone else's money (their employer). This is designed to dampen the desire of consumers to get "the best deal" or decisions based on service or quality.

This has already been addressed. It has already been pointed out that the way to avoid the 'scam' (that frequent flyer schemes aren't) is simply to make purchase decisions based on price and convenience and simply to bank any points that happen to come along, or to ignore them altogether. Your argument appears to be that consumers are stupid and that that's the airlines' fault. Many collecting points in a rational way will not thank you.

But loyalty schemes of this kind are both legal and common across many industries and in all cases involve companies spending as little as possible on a promotion scheme in order to gain as much as possible for themselves, exactly as anyone with any common sense might expect. The benefits and costs are publicly set out, and those who pay attention can calculate for themselves what's worth doing and what isn't. But free or heavily discounted flights are available even to those who avoid modifying their behaviour in any significant way.

Originally Posted by jimworcs

The US air market is dysfunctional.

Quite possibly. But that isn't relevant to the argument about frequent flyer schemes even in the US, let alone globally.

Originally Posted by jimworcs

Not all of these problems are related to frequent flyer schemes.

Indeed, it is hard to find one that is. The rest of the discussion is interesting, but simply not germane to the argument.

We might all wish that frequent flyer schemes offered more benefits and did so more clearly and more cheaply than they do. But they are not scams. Likely many airlines would like to dispense with them, but we can be quite sure they are engineered, unsurprisingly, to benefit the AIRLINE above all. But in some cases that means offering us for free (or a sizeable discount) unsold inventory for which we would have been prepared to pay and which we may obtain without any significant changes in our behaviour--indeed we may often obtain without ever having taken a single flight with the airline in question.

If that's a benefit not worth having, then don't take it. But you cannot call it a scam.