Originally Posted by
sehgalanuj
So, I can see the rationale of trying to extract more value from those who are chasing status. But at the end of the day, status is an irrational behavior on the consumer side.
(...)
So what would I suggest instead? Maintain a minimum XP floor for any fare that is part of a premium cabin or long-haul product. Keep these static. XP floors are the glue that keeps AFKL as the default choice even when competitors offer cheaper fares. Removing floors destroys that behavioral inertia.
Reward up, never punish down. Don’t differentiate XP between AF and KLM for harmonized fare brands. If you want to increase revenue, raise status thresholds instead of undermining the XP concept itself. Customers are far more perceptive than you might realize and can see the backdoor increase. Customers stay loyal when they can predict what it takes to requalify. XP differentiation introduces variance, and variance kills planning. When planning dies or things become unpredictable, loyalty dies.
Fully agree with this.
For example, let's take a look at Lufthansa. To be precise, their lowest business class fare (P), as it earns zero miles at many other *A frequent flyer programme outside of Lufthansa's own Miles&More. There are thousands of Star Alliance frequent flyers across other programmes who don't book these Lufthansa fares, because it feels wrong to pay 2000 euro or even more on a business class flight and earn zero miles.
What do these people do? They don't upfare to a higher booking class. They book with the competitor. On a recent intra-EU itinerary I had the choice between paying Lufthansa 600 euro for my flights and earning 0 miles, or pay 200 euro more and fly with Turkish Airlines and still earn a decent amount of miles. The choice was remarkably easy.
This is one reason why you don't want to punish down - especially not within FlyingBlue itself. Although I know that non-earning business class light fares are getting more common across the industry, it's one thing to only take away earnings on such fares to partner FFPs, but doing so to your own elites would be extremely punitive. It also just looks "cheap" when customers spend hundreds or thousands of euros on a flight ticket (obviously, I'm not talking short-haul routes for Ryanair prices here, where it would be understandable).
I think most of us understand the reason behind unbundling, differentiating between fares. But I would be extremely cautious with taking this too far. A minimum XP floor for all long-haul fares and all short-haul business class fares should always exist, in my opinion. A carrot works better than a stick, even if it's a mouldy carrot that isn't as tasty as we remember them being a decade ago
