Lufthansa to “Spin Off” Miles & More for 2014?

This Boeing 747-800 aircraft operated by Lufthansa awaits its passengers at the gate at Los Angeles International Airport for its flight to Frankfurt. Photograph by FlyerTalk member gluedtothewindow. Click on the photograph for a trip report written by gluedtothewindow.

Although no final decision has been reached at this time in forming a “spin-off” of the Miles & More frequent flier loyalty program within the Lufthansa Group — nor are there any plans to sell it at this time — there is speculation that Lufthansa is considering having the Miles & More frequent flier loyalty program become its own independent company.

To me, this sounds similar to what Air Canada did with the Aeroplan frequent flier loyalty program. The rumors of Air Canada selling Aeroplan started as early as 2003 on FlyerTalk. In 2005, ACE Aviation Holdings — the parent company of Air Canada — initially sold 12.5 percent of Aeroplan; and as of May 28, 2008, Air Canada no longer had direct control over the Aeroplan frequent flier loyalty program after ACE Aviation Holdings disposed of its remaining holdings.

That prompted the question of whether or not airlines should “spin off” their own frequent flier loyalty programs in order to raise cash back in June of 2005 on FlyerTalk.

My answer is that it does not matter to me. All I really care about as being a member of a loyalty program — whether it is for an airline, a lodging company, a rental car company or even a sandwich shop — is that the benefits of being a member of that loyalty program outweigh the time and effort I devote to it. It also helps that the terms and conditions of the loyalty program should be simple enough to follow. If a loyalty program becomes too complicated for me, I lose interest.

As for “spinning off” a frequent flier loyalty program to raise cash, it has been proven that charging ancillary fees for specific products and services has been nothing short of a “gold mine” for airlines and lodging companies. However, it appears that Lufthansa is seeking to increase customer benefits for the approximately 18 million members of the Miles & More frequent flier loyalty program who do not fly in order to strengthen their loyalty…

…but some FlyerTalk members question as to whether or not that was the purpose of the Payback program, which became a partner of the Miles & More frequent flier loyalty program back in 2002.

Does Lufthansa believe there is more potential for profit from those 18 million inactive members of the Miles & More frequent flier loyalty program than its more active two million members who are frequent fliers?

Regardless, FlyerTalk members are concerned about the data mining aspect of the “spin-off” of the Miles & More frequent flier loyalty program — but then again, it seems as though frequent flier loyalty programs are increasingly out to collect more data about you whether or not they are “spun off” into their own entities. This controversial discussion about Delta Air Lines profiling members of its frequent flier loyalty program is but one example.

I have sympathized with frequent fliers of Air Canada having to deal with an increasingly complex frequent flier loyalty program. The independence of Aeroplan might have contributed to that, as it is no longer within the control of Air Canada…

…but if the Miles & More frequent flier loyalty program does become an independent entity, what could that ultimately mean for you? Could the Miles & More frequent flier loyalty program become more complex, as has seemed to happen with Air Canada and Aeroplan with the introduction of such initiatives as Altitude and Distinction — and the resulting angst of its members? Do you believe that a frequent flier loyalty program should be under the partial or complete control of an airline — or should it be “spun off” and independent, as this question has been asked last year?

What are your thoughts?

Comments (Showing 1 of 1)

  • sdsearch at 12:19pm December 12, 2013

    If Miles & More will get rid of “hard” expiration (like Aeroplan did recently), then I’m all for it.

    However, a more general question: For those airlines that have lifetime status programs, does that make it more complicated to totally spin it off into a separate company over which the airline has no control?

    I certainly care much more about any changes to my lifetime status (that i cannot re-earn) than to my yearly status (which I can choose to earn elsewhere, if need be).

    Or is the status part of the program not included in the sale typically? (It’s confusing, because there are redeemable miles vs qualifying miles (and sometimes, as in AA’s case, also qualifying points and qualifying segments). One way of looking at it, those are all part of the frequent flyer program. But equalifying instruments need to be more closely aligned with the airline that the redeemable instruments.

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