So, have just dug a little deeper and it seems they are essentially changing FFP to make sure that no one traveller is able to be a net loss to the business, whilst also aligning the FFP to reward high margin travellers (instead of distance flying). Except it isn't really reward is it, it's giving you what you have now and strip things from people whom it is convenient to strip from.

Let me first preface this post by saying I think EKs announcement is really quite cynical - a major devaluation (which is always unpleasant, but is a fact of life with all loyalty programs...economically extremely difficult to keep printing points into your little ecosystem when the amount of point-sinks, aka redemption/expiry opportunities just doesn't keep with the earnings) with literally no redeeming (ha!) features is spun to be a positive. Worthy of the crudest political theater, imho, not a service organisation, and an awful tone to communicate with your most frequent customers who get the impression they are seen as stupid enough to not realise what's going on (or they just don't care enough). Not a good message to send out as the cynicism works both ways: it will take much less for people to change their buying habits (hand lotion notwithstanding).

However, I think the calculation at EK HQ is that it is all the best for the company in the long-term and better to get the short-term backlash over with now, as they cull loss-making customers - higher margin customers (aka, the more flex J and F fares) are more insulated as we see on the earning rates and the increased number of points out there with barely growing redemption options means those redemption seats are more valuable (to EK) and so has to be dealt with by devaluation. The entire industry is moving towards the rewarding revenue model, and this goes further by blatantly going to the rewarding margin model. I can't exactly blame EK for doing it, I just wish they got subsidised by their rich owners so I could earn more miles, haha!

Doing some rough calculations, let's take a route like LON-BKK - a typical EK route between the two busiest outstations on the network. (also makes the mileage calcs easier!).

An old Y saver would go for 460 and flex starts at 960. Full Y is 1100-1400. (including taxes). You earn 6000 miles for a saver rt and 12000 miles for a flex rt. The new rates: 3000 for special, 4200 saver, 8400 flex, 12000 flex plus.

Old system: Gold after 8.3 savers, 4.16 flex; Platinum after 25 savers, 12.5 flex
To EK that means a gold member has given them:
400*8.3 rising to around 800*8.3, around 3.3k GBP-6.6k GBP revenue - on savers
900*4.16 to 1300*4.16, around 3.7k-5.4k GBP revenue.
For platinum, it's: 10k GBP - 20k GBP for savers, or 11.5k GBP - 16.25k GBP for flex.

If we take EKs margins from their accounts at 4%, we can see that's around 132GBP profit for the whole year for someone on cheap fares with status, rising to 216GBP for someone flying on higher margin fares, or with Plat, 400GBP - 800GBP. There's also that interesting area between similar margin fares on the border between high cost saver and the cheapest flex - the old system saw EK wanting people who travel regularly to buy the highest saver, not the cheapest flex. Relatively anomalous pricing that needs to be fixed! However, inside the same cabin, you can say that the cheapest fares have lower margin than the most expensive (obviously). So you would want to say something like, savers have a margin of e.g. 1% and the top flex, up to 6%. That gives us a different profit distribution: 33GBP-324GBP.

You can see how an EK accountant looking to trim costs/improve margins might be looking at the lower margin business and think, hang on, every time they go to the lounge and drink half a bottle of champagne and eat food, they spend 10 GBP in additional costs. That could wipe out yearly profits on a pax, so what's the point of giving them status. Similarly if you are in the DXB F lounge twice on a trip and your yearly profit value to EK is 500 GBP and you're making 10 trips a year, spend 30 GBP a time there (easily doable with the restaurant and wine costs)...what would be the point, says a bright spark. Not to mention the additional baggage allowances and increased Skywards miles earnings.

Now, in the new system:
Gold - 16.6 specials, 11.9 savers, 5.95 flex, 4.16 flex plus
Say the prices range: 400, 600, 900 and 1200 GBP
and the margins are: 1%,2%,3%,6%
Ek are seeing: 66.4, 142.8, 160.65, 299.52 a year.

That makes more sense to revenue managers and can justify the extra free stuff you get once you hit that status. And as the higher margins on the most expensive fares require less flying, you are more likely to have to give the free stuff less often! Accountants and revenue managers get a bonus!

If you do the same calculations for other routes, short and ULH, they have broadly similar revenue equivalents for status, indicating that the driving force between the changes is to make sure that ancillary status costs can be directly compensated by the higher margins/profit value of a pax and so EK aren't in a situation where travellers like those on FT have not actually made EK enough money but are using ancillary services ultimately costing EK money.

Makes the FT hobby less fun...!