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Comment Re:Airlines aren't banks (Score 4, Interesting) 151

During COVID, American Airlines took out a loan and put the AAdvantage program up as collateral (https://www.sec.gov/Archives/edgar/data/6201/000000620121000022/aainvestorpresentation.htm). When estimating the value of the program, it was larger than the market capitalization of the holding company, which means the value of the airline part of the company is negative. Hence, the claim that the airlines have morphed into banks that issue points.

Comment Re:It is an obvious optimization (Score 1) 151

Airline miles are a form of company scrip and is a de facto currency because you can use them buy goods and services. Unlike gift cards that are pegged to an actual currency (e.g., Euro or USD), the value of the airline mile is whatever the airline decides it should be at any given moment (Delta does dynamic pricing on using redeemable miles to buy tickets). There are many ways to reward loyalty, some cards give actual cash back. The individual consumer has to decide if the value of airline miles is better than actual cash back. Some stores add a surcharge for using a credit card, so you are effectively paying for the points.

Comment Re:How is this any different than trading stamps? (Score 2) 151

Yeah, it does suck for the consumers.

If you read how Marcus earns status by frequently traveling Delta One or First, you quickly realize that Delta wants to award status to people who are less likely to use it. If you are buying D1 or F, the value of Diamond Medallion status is pretty pointless. I think in the Marcus scenario, there are only 6 main cabin trips (out of a total of 30 trips), which is when the free upgrades would be useful. Marcus already spent $33,600 on D1/F and puts $96K on the Delta Reserve card--do you think Marcus would have a problem spending an additional $4800 to buy 6 more F tickets (plus he could put the $96K in credit card spend on a 2% card and get $1960 cash back). The additional value of Diamond status is roughly $3000.

On the other hand, the typical road warrior would most likely end up in Sliver or Gold. These are the users who extract the greatest value out of the FF program and moving them down in the hierarchy makes it less likely to be able to get the free upgrades. If you get them to use redeemable miles (RDMs) or actual currency to upgrade because free upgrades is a crap shoot, Delta gets to generate some extra revenue (or reduce liabilities through the use of RDMs).

Comment Re:I guess time to tell... (Score 1) 91

I actually think Apple wanted to switch to USB-C and was happy that the EU was the bad cop. The switch from the 30 pin connector to the lightning connector was met with great outrage--why have the bad publicity if you can avoid it. I would be willing to bet that Apple either directly or indirectly arranged for the regulation.

Comment Re:I guess time to tell... (Score 1) 91

I will assert that the hardware and software environment between Apple and premium Android devices are comparable, at least for the majority of smart phone users. If Android has double the market, it would appear that the majority of Apple users are deliberately picking the Apple devices because the walled garden is not a deciding factor. If they are willing to spend more money in the Apple app and services market when they can move to an Android device, why should the government intervene? Is the app and service market an integral part of the Apple experience; for example, should I be able to tell a restaurant chain that they should source ingredients from my preferred supplier?

An alternative view is that the app market is similar to car parts or electrical devices and should be open to all vendors who can produce components that meet interface requirements.

I can argue either way, just as long as it is not annoying like the EU cookie banner. It would really sucky if I had to pick an app store every time I unlocked the screen.

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