Airlines

Lufthansa moves to revenue-based rewards

Lufthansa rewardsThe Lufthansa Group airlines are joining the ranks of airlines rewarding passengers for euros spent rather than for miles flown. Beginning March 2018, Lufthansa Miles & More rewards members will be receiving four to six award miles per euro spent, corresponding with their particular booking habits and flight patterns. The new reward system applies to flights with the Lufthansa Group airlines Lufthansa, SWISS, Austrian, Brussels Airlines and Eurowings, as well as to all other Miles & More partner airlines, provided the ticket for the flight was issued by a Lufthansa Group airline.

By Rick Ferguson

Specifically, this means that Miles & More participants will always receive at least four award miles per euro spent on flights with Group airlines. Members with frequent flyer status will receive six award miles per euro on flights with Lufthansa, SWISS and Austrian Airlines as well as with United Airlines and Air Canada. This means that the bonus award miles that status members receive for flights with the network airlines and transatlantic joint venture partners will be doubling to 50 percent, from currently 25 percent. The same applies to the airlines Adria Airways, Air Dolomiti, Croatia Airlines and LOT Polish Airlines, which also participate in the Miles & More frequent flyer and reward program.

The frequent flyer status of participants, the privileges associated with that status and the allocation of status miles will not be affected by the new system for award miles. Lufthansa states that the change will also not have a fundamental impact on the number of award miles distributed by the airlines over all, nor on the availability of flight rewards. Money quote from Lufthansa:

“With this change, Lufthansa Group is setting up a flexible system for crediting award miles that links the number of awarded miles to the price of the ticket. With this change, the leading European aviation group is rewarding the purchase of higher-priced tickets more strongly than is currently the case. The number of award miles that are credited per flight has repeatedly been brought in line with the development of ticket prices in the past, and lowered, especially in the lower-priced booking classes. The new reward system will result in an automatic allocation of award miles based on the sales volume that is generated by the purchase of the ticket. With this move, the Lufthansa Group airlines are creating a consistent system for assigning award miles. And frequent flyers will continue to benefit from high levels of comfort and convenience when they travel: the length of the route will still be the relevant factor for awarding status miles, and privileges linked to frequent flyer status will remain in place.”

How is the frequent-flyer cognoscenti reacting to the move? Largely with resignation that the glory days of “mileage runs” are over. Here’s the Points Guy:

“The fact of Miles & More going revenue-based isn’t that surprising—it’s a trend in the industry. For most, it’s a devaluation, but not for everyone. For lower spenders, or those who fly primarily in economy, a revenue-based earning structure is generally bad news, but for flyers in premium cabins, the revenue-based structure could be good news.”

Over at the Boarding area, the feeling of resignation is likewise palpable:

“While I hate seeing programs go revenue-based, the truth is that this shouldn’t have that much of an impact for most travelers, given that Miles & More was already a pretty stingy program. In other words, if you’re on a cheap economy it’s unlikely that there will be a huge difference between earning 25% miles and earning four miles per Euro spent. So while I don’t love this trend in general, objectively I don’t think that many people are going to be earning substantially fewer miles than before. That’s also why I don’t really get what their motivation is here.”

As Skift notes, the move also reveals rather startling uncertainty for passengers who book Lufthansa flights through third-party sites:

“Tickets issued by travel agents will also be treated differently in the system coming from Miles and More. Since a variety of factors including fees and currency (for example, credit card points) can come into play when booking through a third party, Miles and More simply says that ‘you will find out’ what the earning rate is after the ticket is booked. Bookings through Chase’s travel portal, which can often include a balance of credit card points and cash, illustrate this situation well. Currently, those bookings show up as ]special fares’ when tabulated with U.S. carriers, with the award and status earnings slightly adjusted from the typical revenue fare.”

With Lufthansa now joining Air France in rewarding miles based on revenue, the trend for European carriers to follow the Big Three US carriers down this path seems likely to accelerate. We’ll continue to watch this trend.

Rick Ferguson is Editor in Chief of the Wise Marketer Group and a Certified Loyalty Marketing Professional (CLMP).

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