Bernie2012

http://www.faz.net/aktuell/wirtschaf...-12700805.html

I hope that move is not going to change their privacy policy....

What else that could mean other than gang ra***g my personal data?
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In order to not create out of control rumors, here is a statement of the Lurkers in that issue copied from the feedback treat:

Bernie2012

A quick translation:
They are considering that to "improve the purpose of the program for their 18 million not-very-frequent travelers and to tie them closer to the airline by that".

Well, they seem to prepare for losing even more status pax and expect them in future to collect their miles on the gas station, buying milk and bread etc. (just an evil and totally baseless rumor spread by me).

As it come to me, my Miles and More card is only for my air travel activity and I do not wish anything else. If I give my data to some else, that is my decision then, but I am not going to participate in any kind of PayBack styled programs. I think we have had the last 6 months enough revelations about intrusive breaches of privacy...

econprof

Was just about to post that link. Here's the English translation of the article:

The German Lufthansa AG wants to spin off its frequent flyer program, Miles & More, to an independent company. The new business unit, about which the Board board of Europe's largest airline will likely decide next spring, will continue to belong to the business area "Passage," in which the passenger business of Lufthansa is bundled .

The spin off of the program, currently involving more than 20 million accounts, is intended to provide the basis for profitable growth of Miles & More, confirmed a Lufthansa manager to the FAZ. The number of actual beneficiaries of the program is a relatively modest 2.5 million. The aim of the spin-off, therefore, is "to increase customer benefits for the approximately 18 million who do not fly and thus to strengthen customer loyalty this target group to the airline" according to an internal report of Lufthansa.

Lufthansa has not published business figures about the frequent flyer program. Analysts of the Lufthansa Group estimate, however, that Miles & More contributed 700 million euros to the profit of the Lufthansa group alone in fiscal 2012. In 2013, a similarly large contribution to profits is expected. By spinning of Miles and More, Lufthansa would following the successful business model of other airlines abroad. For example, the bonus program company of Air Canada currently still accounts for a hefty profit margin of around 30 percent.

The planned subsidiary Miles & More , which is expected to be up and running in the second half of 2014, aims to boost the number of business partners outside the airplane business to increase its sales and profits. Previously Miles & More has sold large contingents of bonus miles to external business partners who were able to offer their customers credit card, car rental or magazine subscription incentives.

econprof

So... they don't want me (flying in Y, but spending upwards of EUR 10,000 a year) to retain my SEN status, but they want to sell miles companies to give incentives to people who never fly, so they can redeem their miles in the World Shop?

Am I understanding this correctly? The car-rental customer is worth more to Lufthansa than I am??

Bernie2012

Thank you for the translation and sorry for being faster

I mean it is obvious, the earning of miles and "status" is more and more tied to real hard profits, that means over the next years you will see the numbers shift further from 18 million "not-very-frequent travelers" in proportion to ?2+? million frequent travelers as many more lose their status and will then just stock another piece of scrap plastic at home or in their wallet. To give some benefits (and revenues) to those 18+ million guys and gals who are stupid enough to have a worthless piece of plastic, they want to exploit that data base for other sources of income.

But not with me. If 18 million people are st*pid enough to have a worthless piece of plastic, why should I get penalized for that? (OK, this card in blue is not send every year or two years, but....)

I mean, I am also not collecting customer cards from every f-ing gas station, plumber or bakery around.

I hope they will offer an alternative to that...

kanor

I find this disturbing, I thought the PAYBACK - M&M duo was the perfect solution to this problem.
People flying and/or valuing privacy go for M&M.
Others wanting to earn points on every daily stuff go for both.

And now they compromise this and potentially make the FFP part less attractive to actual flying people.

gum

Additionally this is an even uncorrelated course of action by LH.

Astonishingly enough Payback sent out a mailing last week. Content was an offer to automatize the transfer from Payback points to LH MIles&More.

Without any advantage in comparison to the transfer "on demand" which you can start anytime after you have reached 200 Payback points.

Not very attractive.

One week later LH states that they will spin-off Miles&More in order to create a Payback clone.

Rambuster

I hope they don't follow the Air Canada path, where he FFP was turned into a shopping mall.

oliver2002

Back in the 90s when rebates were not allowed in Germany by law, LH/Weber set up M&M (MMI) in Bermuda. 10 years later it was moved back to Germany as the law was changed. Just before Franz came, Mayerhuber integrated into the Passage division and Franz made it a part of the marketing department. This caused a few issues with integrated partners that are not owned by LH (eg LOT, Luxair, etc) but they didn't have much choice.

Payback was supported by Weber (as part of an executive decision) because he thought it was a great idea and needed support.

The essence behind the current move is that Payback is essentially in every female consumers wallet in Germany. The upwardly mobile high income person has a M&M card in his wallet but doesn't use payback. The new structure will enable the M&M card to be used in more places to collect points, getting M&M a slice of the action Payback doesn't address at the moment. The co-operation will remain AFAIK. Payback has also moved on with their new owners (Amex) and is probably looking at more airline partners.... Amex MR is a model M&M is aiming for.

Bernie2012

There is perhaps a reason as to why certain people have a FFP card and not a Payback card, I mean there are people out there having facebook accounts or post their willy on twitter and others do not do that, all a matter of informed choice.

With MM there was and still is a very tangible reason to have that card (for me), for Payback, I can't follow the reason behind having such card, for me its waste of time even possessing it, opposite, the surefire bet that I get squarely and on a larger scale profiled by using it, makes it for me a NoGo.

"Rabatt und Skonto lasst euch sagen, werden vor dem Verkauf drauf geschlagen", sorry for posting German here. The "discounts" and benefits of a Payback card are so little and what bothers me is, that this spin off moves MM data from the "save" LH environment into an, lets say AMEX styled environment, which is not save as they are only after their profit and exploit their position wherever they can, even at the cost of selling/renting or abusing customer data. (And Amex is a really parasitic middleman no one needs other than AMEX's shareholders, do you know how expensive AMEX is for the retailer accepting it? Do you know how much that drives up the purchase price everyone has to pay for no good reason?). I am totally happy with my Visa Business card, I don't need another card and I really don't need and want a Payback like LH card. Sure LH profiles, but this is my adult decision to accept that with this one single company as long the data stay within this single company.

gum

That's an interesting point of view, Bernie2012! Although I completely disagree with your opinion of Amex (I am admiring Amex and fan of their cards) just let me add some infos about Payback:

The only *tangible* advantage of Payback is the fact that the point-collection card can be issued by different shops.

If you have a card of Galeria-Kaufhof it delivers nearly 10% (+1% in Payback points) for nearly every item sold there. Food & Beverage is 0 % (+1% in Payback points), electronics/foto is 5 % (+1% in Payback points).

These coupons are sent to you by mail.


But this is not valid for all purchases but only for a specific number of items bought per couple of months. In that time you regularly receive e.g. 7 coupons for one 10% item etc.

The downside is cross-selling. Remember the last purchase of sport-shoes. Got the immediate rebate of 10 %, my Amex MR points through payment by Credit Card.

But then the cross-selling started: Once in the shop I enjoyed the atmosphere and bought some items at food&beverage (with a "surcharge" compared to the full-service supermarket) and some other items.

If I would have calculated it in a fair way and deduct the "cross-selling surcharge" on other items my rebate would be much lower.

So you can use that card if you already shop in Galeria Kaufhof, e. g. after a day of work in the heart of Munich, but you shouldn't think that you have really saved something.

Therefore I agree: Skonto und Rabatt, das lasst Euch sagen....

starlicious

Maybe this is driven by a wish of LH to remove deferred liabilities from the miles accumulated by customers from their balance sheet?

Bernie2012

Well, the last time I bought shoes, I went first to my bank to withdraw cash for free, then I went shopping, found some nice Italian casual shoes, they were tagged 189 EUR.
I went to the seller, I would like to buy them if I get a good discount and I pay cash, she went back to ask her superior, returned with a proposal: ok. 150 EUR. Agreed (very high quality, they look after 6m still like new)

So I think there are multiple ways to save money, one of the best is to cut out the middle man first

The same with Hotel reservations, I am basically reluctant to book with large oversea chains or portals like Expedia, but usually tend to go with family owned Hotels, call to the Hotel (first and foremost to find out whether or not they have smoking amenities, rooms, balconies, then whether or not there are discounted rates available, if that does not work I am asking for a room upgrade, if that is met with hesitation, I encounter: "so, should I just book the room then via Expedia?", that gets you in many situations a nice upgrade or offer...As Expedia is ridiculously expensive it is a good incentive for the other end of the phone line to cave in...(which they can't do officially when hooked up to such GDS, but...)

Maybe that is a good hint:
http://www.thisismoney.co.uk/money/e...n-Express.html

To pay a ridiculous card fee for having insurances I already have otherwise, to have services I don't need, credit I don't need and want, being sold lounge access I am already granted with and then together with overcharging the retailer I just want to give my hard earned cash, to finally have handed over my personal data to someone else as a thank you, is for me a nice incentive to stay away from AMEX. There are plenty of ways in the pursuit of happiness

There must be a reason why the AMEX CEO is receiving a 10-20 times higher pay then the typical LH CEO...

Or serve as an excuse for being stripped of your bargaining rights

Do you read these "welcome to my shop invitations"? If that does not concern something new, rare, interesting or different, I dispose the rare coupons I get usually into what we call in Germany "Ablage P".

As stated otherwise, and this is meant to be totally sincere, LH had been until today an absolute quality outlet in terms of data protection and privacy and looking on their bold reaction, they still take that apparently very serious and this is for me very comforting...and rare.

I just received a couple of days ago a nice personal letter from a major US Corporation stating (Adobe its called): "Dear Mr. Bernie2012, we unfortunately need to inform you that our servers had been hacked and your personal data including your full credit card details had been stolen."

As said, I trust LH IT and policy, but not much beyond...

weero

Quite a refreshing read Bernie2012 thanks for that insight!

And while I agree with your sentiment regarding the whole evolution - is AMEX really that bad? I have used them driven mainly based on their eternal mileage retention policy and the relative ease of conversion.

Unlike Google which currently makes the KGB and the Gestapo look like innocent boy scouts when it comes to sniffing, AMEX left me with mostly one impression: clumsy and inept. My spending pattern with them is about 100% airline tickets and electronics .. and all they do is inundate me with spam on products how to increase my female slutfactor (I kid you not, from make up to underwear all in pure brothel quality) and discounts to bars and events ... all things I abhor and haven't attended since I earned the right to say no.

Any company which is so entirely oblivious in regards to its customers cannot be an evil data collector IMO. They can still leak and loose it though, I agree.

DownUnderFlyer

And now AC is offering frequent flyer benefits again outside thr Aeroplan program because it had become almost useless.