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Nothing but a Bribe

July 06, 1986

In a June 22 letter, Lee Jones criticizes P. Klemperer and I. P. L. Png ("Frequent Flyer Plans: Marketing Device With Insidious Effect," Viewpoints, June 8) for suggesting that society control the abuses generated by frequent flyer plans.

He is correct that if everyone were upright and altruistic, frequent flyer plans would not have insidious consequences. I would hazard to guess, however, that for every person like Jones, there are three or more who select airlines according to the frequent flyer plans to which they belong and who do not use frequent flyer awards for company travel.

Government policy must be designed with regard to the behavior of the majority--the majority that behaves selfishly.

At least one airline encouraged passengers to fly through Denver not only by offering a discount in fares but also by means of special mileage bonuses to frequent flyers. Jones wonders about the fairness of subjecting frequent flyer awards to income tax. I personally feel that it is no less fair to tax these awards than to tax other forms of income. As for the appropriate measure of their value, the Internal Revenue Service has a well-established standard--their market value.

James Anderson in his June 22 letter attributes the difference between Western Europe and the United States in the cost per mile of air travel to the existence of frequent flyer plans in the United States. In Western Europe, air fares are regulated by government, just as fares were in the United States until the late 1970s. Not surprisingly, the result of government regulation is that fares are much higher than they would be if unfettered competition were permitted to prevail.

CHENG CHI-WO

Los Angeles

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