fifty_two

Here is the link

An article published today (sorry its in french, but you can use google translate) , about AF's strategy for flying blue in order to ''simplify FB and increase customer satisfaction''

Some of the changes mentionned in this article are already done , some will be later , upto 1Q of 2018

Here is a sample of what they told about (other unknown surprises will come later)

- book hotels with miles from their website
- miles per money spend (as delta) instead of distance flown
- less miles required for prime tickets
- Less privileges for silver members
- Ability to redeem miles on transavia flights
- Platinium for life after 10 years (thats exactly what is written , iam not lying)

The interesting thing is that 12 millions of members , but 90% of them are Ivory. First i understand why ivory card are now digital (they will save millions of euros)

Then , my big question , if it is really hard for them to focus on the last 10% , which are frequent customers, and not just random customers , what will happen with more than 10% of elite passengers ???

Below , there is also a video from BFM TV (a channel owned by the same company as this newspaper) about this topic. I really loved when the journalist has been asked what will be the improvements for passengers , and he made a short silence before he was able to improvise an answer and saying ..... i dont really know

ajs123

An interesting article - thanks for posting it!

I wonder whether FB will introduce minimum spending amounts as DL has - might be tricky given various currencies. In NL and France it could be tied to FB AMEX spend.

The figure of 12M seems rather surprising given that in 2014 over 24M were reported:
https://www.flyingblue.com/Numbers-behind-the-Miles

FD1971

For more information, please also see my comment about the changes due in 2016 from late November in the UX thread.

As pointed out before, the usual suspects (consultancies) running the old standard plays from their playbook.

fifty_two

You are welcome

That would be awful , but yes honestly i guess it will be their favourite idea , be sure that you spend X before granting you access to our wonderful services

If you are right , it means that ''Les echos'', as a newspaper which belong to the same company who owns ''BFM TV'' , is nothing more than a bunch of tourists who only know copy/paste and dont check their infos before publication

TerryK

How is this news?

https://www.flyingblue.com/about-fly....html#platinum

fifty_two

Thats the joke ! In france we are often laughing about some newspapers or websites such as this one, who dont even dare verify and double check what they say before publication. (or at least someone told them what they should write)

orbitmic

Many thanks for the link to the interesting article, however, I think that you read it to quickly. It simply doesn't say the above. The paragraph is:

"La première des priorités sera de simplifier les règles. « Beaucoup de clients disent ne rien y comprendre », reconnaît Frédéric Kahane. D'autres compagnies comme Delta ont déjà commencé ce travail de simplification », souligne-t-il. La compagnie américaine, partenaire d'Air France-KLM, a en effet décidé, il y a déjà un an, de remplacer le système de calcul des miles basé sur la distance parcourue, par une nouvelle structure basée sur le prix du billet. "

It says that one of the first tasks of FT will be to simplify the rules. It then adds that other companies have started doing it such as DL, and the journalist comments that DL has moved to a spend-based system.

There is, however, nothing in the interview that says that FB will move to a spend based system as well (at least certainly no more than today), and the journalist does not say it either. It specifically mentions that DL (and not FB) is doing that.

fifty_two

how do you translate it and understand this ?

So what is the difference between this and what delta is doing ? maybe i missed something , if yes can you explain ? It doesnt looks like straight like DL is doing , but in the end its getting closer and closer.

I dont forget too that this guy may not know what he is talking about , so i dont trust 100% what they said , i just use it as an indication until further notice from FB

KL803

In the context, I'd say that the journalist mentioned above lines as an explanation of the current Delta FFP. As orbitmic already said, Mr Kahane did not explicitly say (at least not in this article) that FB will change the earnings into the Delta model.

At this moment, Mr Kahane's phrase about "simplification like other companies already do" will surely lead to pure speculation on our part.

So indeed it's wait and see until some official news come from FB itself. Surely, changes will come and they will rather be to the benefit of the program than to its customers.

San Gottardo

If the article is not mis-representing facts or statements on every point then it seems that changes will occur over a period of two years. Which of course has the benefit to allow for a thorough testing of operations before bringing about the changes rather than a Big Bang with the risk that there are operational glitches such as IT not fully working, staff not fully informed and trained, some operations not set up, etc. The challenge is of course how to phase in things. Start with the good news? OK, that makes people excited and builds good will and good propaganda, but then later negative changes will be perceived all the more as treason. Start with the bad news first? OR always find a mix of good news or bad news?

Moreover, I am less convinced that all changes will only benefit the program and not customers. I believe that two groups of customers will benefit - the least and the most frequent travellers - and one group will lose out relatively. If the program becomes easier to understand then that's good news for all. If "prices" go down and there are also possibilities to make use of much lower amounts of miles including for things other than flights then that is good news for the infrequent travelers (Ivory) where a number of them can then make use of their miles, which otherwise they couldn't because they never had quite enough miles. I also believe FB will do more for the other extreme, the very frequent flyers, and up the game on status benefits. Whether that will be for Platinums or whether they'll create an additional tier remains to be seen, but I think that very frequent flyers will benefit. The ones that probably will lose most compared to today are those frequent-but-not-very-frequent flyers, i.e. the Golds and Silvers of today. They'll either really lose something such as Silver benefits or not take part in the overall upping of benefits for status card holders, with the gap between Gold and Platinum widening significantly. Some of that gap will be created by taking away benefits from Golds/Silvers, some by giving more to Plats or whatever tier comes on top.

There will be lots of screaming and shouting about how with these changes FB will not loyalise (potential) customers but drive them away. Thing is, FFPs are less about loyalising customers, except maybe the most frequent ones where losing their business may mean losing several hundreds of thousand of Euros per pax per year. But airlines have figured that in a world where customers care primarily - but not only - about price, an FFP is just a means to get customer data, run some big data analyses and send attractive offers to customers, thereby attracting them with good offers rather than the prospect of a free flight at some distant point in the future. Which it why it also makes sense to have a spending threshold to access higher status tiers: if you want to loyalise the biggest spenders, measuring who really is a big spender is the thing to do. The (often not very) practical aspects can still make this an idiotic idea, but there you go.

BTW, I am not advocating spending-driven status thresholds, but I can understand the logic behind (which doesn't mean I necessarily share that logic).

fifty_two

Sorry i made a mistake and deleted the content of my post !

orbitmic

The sentence in question is extremely clear: it says that AF's partner DL have moved to a spend-based system. Neither more nor less than that. It says absolutely nothing as to whether AF's simplification will be done in the same way, a similar way, a different way. Moreover, FK mentions DL "among others" and does not even refer to the spend based system itself, only the journalist mentions that example.

orbitmic

You may well be right or you may not be, but to be honest there is absolutely nothing in the article that says much about who will benefit or not apart from low earners already benefiting from Transavia awards which start at half the price plus the lowering of European awards.

If I am not mistaken, your reference to increased benefits for the most frequent flyers is more based on a discussion you had with AF people which you mentioned in another thread than with the contents of the article right? It may well be something that FK still has in mind, or they may equally have thought of something entirely different since (unless you have had further confirmation recently?) To be honest, with FB I'll just wait and see. Even your suggestion that everyone will win if things are simplified may well be optimistic because one thing we know for sure is that every time AF has announced that it simplified its service, it means a straightforward worsening for all and every passengers, and it is highly possible that FB will cook up similar enhancements.

To be honest, whilst I would love to be pleasantly surprised, my default position is that FB is run by bunch of incompetent idiots who take customers for granted and think that rewarding loyalty is simply a waste of resources. If they give you one, the likeliest possibility is by far that they are or will be taking 3 away. My default assumption is that in all likelihood, everyone will lose out from further changes but I may of course (and hope that I will be) wrong.

San Gottardo

I think it's a bit too simple to say "AF cannot compete with ME3 and LCC".

Along the lines of what I wrote before, AF believes that it does have a fair chance against the ME3 by improving its inflight and on the ground service and by adding real benefits to the top tier of FB. To these very frequent flyers, the ME3 are less relevant because they involve a time-consuming stop. I take myself as an example. I have flown two of the ME3 extensively, but only when traveling to the GCC region, never to anywhere beyond such as Asia or Africa. All my Asia trips where on no stops from Europe. And I know for a fact that there are plenty of people like me, who prefer flying nonstop from Europe if that optimises time rather than changing planes in the middle of the night at DOH or DXB. For travellers like these, AF has to attract them back from BA, LHLX, CX, SQ and the like. Less from the ME3. And the battle over the market to the GCC region is lost already anyway, there you can't beat the ME3 product quality, frequencies, etc. Most European airlines have understood that and reduce their offering.

On the LCC front as well, the thinking to attract people with good offers is not wrong. AF does stand a chance there if it does it right. Look at Vueling

The real challenges are not whether that thinking is right or wrong, the challenge is the implementing of everything it takes to bring about success of that strategy:
1. On the top end of the market, whilst the new AF premium offering is good and whatever changes FB may bring for top status customers will strengthen that, it's still not enough. Too few planes have the new J class on long haul is just a huge handicap, and it's not the only one
2. On the low end of the market, issues with high complexity costs, low productivity, difficult labour relations, change management, etc. just do not make the low end offerings by AF attractive enough to lure over enough customers. Sure, easyjet is a fortress, but look at Vueling on how it can be invaded. Transavia and the accompanying tussles with pilots about how many destinations can be flown to with which planes are just a complete joke compared to that.

And there isn't any strategic answer to the loss of pax that are not in the uber-frequent category or the super price sensitive. They are neglected by AF, see a nice price and great quality from Emirates or Qatar, and will wander there. The question then is whether giving more benefits to Golds and Silvers will fix that problem. I don't think so. Let's see whether Flying Blue does.

orbitmic

I guess that to me, the most important part of your post is what is in between the lines.

The question, I guess, is - assuming that what they have told you is right and they do want to improve their treatment of super-frequent flyers, how successful is that strategy likely to be ie how many can they either gain/regain or not lose as a result and is it worth the investment?

Your description of your own case is perfectly apt, but how many of you are there? We are looking for people who are (1) Paris or Amsterdam based , (2) very frequent flyers and very high spenders, (3) quite free in their airline choices, (4) who have either deserted AF or KL or would.soon.

Truth be told, I really don't think that we are talking of a big market here. Most Paris-based frequent flyers are still sticking to AF for the most part (and Amsterdamers KL) so they are cheap anyway and any improved FF treatment is (cynically) wasted on them, especially when they have corporate contracts that strongly favour AF or need the airline's unrivalled network from Paris, or simply have always been socialised in a spirit that made AF the "natural" airline to fly, Hermes the natural bag to buy, and French one the only one that they take seriously. In fact, many would still fly AF even if it still provided l'Espace 127 seats and service reminiscent of the Air Inter days if they could get the nonstop flights and frequencies anyway, and a status that "sounds" like it matters.

And then even for the few of you who have "rebelled" against AF because of quality and reliability issues, you make it very clear that even with the best of efforts, it's not as though AF was going to get "Le Jackpot" by being nice to you: you already mention that they are unlikely to regain you from EK's showers and QR's wifi enabled luxury when you go to the Middle East, but what else. Even if AF treat you well, will you actually choose AF's old P and angled J rather than CX's super-attentive F and 1-2-1 fully flat booths in J when you need to go to HKG? Will you resist the temptation of JL's better flight times (not to mention exquisite kaiseki, complete with caviar, lobster, and wagyu washed down with Salon champagne and Blue Mountain coffee as I realise that timings will matter more than service) when needing to go to Tokyo?

The more cost-conscious (or cost-constrained) premium travellers? AF won't compete with the QR and EK or even the BA and LX of this world for those people anyway.

Then there are those people like myself or a few others who are not Paris based and for whom there is no easy winner in terms of convenience. One of the two main airports that I fly from is an excellent example - I can use AFKL (7 daily connections to CDG, 3-4 to AMS, and a daily JFK which AF codeshares on), IAG (5-8 daily to LHR, 3 to MAD, plus LGW and LCY for the few connections going from there) or the LH Group (3-5 daily connections to FRA, 3-5 to MUC, 4 to ZRH, and 2-3 to VIE) pretty much indifferently. AF used to have a significant part of that segment and now a large majority have gone to greener pastures. I don't do things in an "all or nothing" way, but let's just say that if I had kept the same proportion of my flying with AF-KL as before the April Fool's day instead of getting my CCR card in 5 months, I would have flown well over 500,000 level miles and over 200 segments with AF-KL alone instead of the measly 10,000 or so that I have.

Nonetheless, I'm not sure AF-KL would be interested in me. I don't buy full fare tickets (I just don't need the flexibility and can plan my travel in advance with only exceptional deviations so I have long figured out that I am best off buying Z or I type fares and losing the occasional ticket completely rather than paying three times the price for a flexibility I typically do not need), I do the vast majority of my European travel in Y (can't be bothered to pay for J on a 1-3 hour flight frankly), do almost no paid first or only if it is very discounted, and still some of my long haul flying is even in Y. I am typically the type of customer that AF will understandably prefer to treat with some contempt and I respect that choice.

However, even if they did want to win me back, frankly, they probably could not. BA give me an email address that I can write to directly whenever I have a problem and they reply within 24 hours, they have given me a priority phone number which is made of a team of mostly excellently competent people also available 24 hours a day, they give me enough vouchers to upgrade any itinerary to F to keep me happy, and some "jokers" which enable me to get award tickets or upgrades on any flight on a space-available basis 2 or 3 times a year. They upgrade me regularly too, give me one free gold (Platinum equivalent) and two free silver cards to hand out to whoever I want, and while I have had the occasional problem with them, typically make me feel more valued than the average customer. The CCR is frankly much less good than the P lounge, but I get access on any flight and it still beats all non-P AF lounges by a very significant distance.

Even if AF offered the same, I probably wouldn't return to them as I have now developed a loyalty to BA, so really, they would need to offer me more than BA does and that is frankly not going to happen. Plus even if they did, they won't status match me so I undoubtedly wouldn't bother to lose my GGL/CCR benefits for one year just to regain AF diamond or whatever it will be called status the hard way. Will they get a small part of my travel back if they make platinum attractive? Probably, but to be honest, not much right now as OW gives me an almost network wide flat bed guarantee in J, and solo seats on most airlines (including most long haul AA, long haul CX, the new JL, half of QR, most of UL, etc).

I'm not saying that I do not want AF to try. Obviously, it is in my interest that they improve Platinum benefits, and even if they choose to make Platinum worse and create a new more exclusive Diamond, I will be happy for the people who will benefit from it. However, I personally seriously doubt that it will prove a successful strategy at the moment, especially considering AF's financial difficulties, and that if they choose to distract money from Y in order to improve J and F, I suspect that they will precisely lose even more as I personally think that they cannot compete with LCCs. U2 is now more or less untouchable, and VY is, as you describe, an excellent example (DY would be another) with a much lower cost base than AF will ever achieve because in effect, their labour costs at every level are sadly more than the competition and will remain that way as long as AF lives. Those airlines are not just cheap, but they provide a certain form of quality (e.g. DY includes free wifi and in my view the most interesting airline magazine articles of any airline worldwide, although I actually rate AF magazine pretty high in that category) and will continue preventing AF from making money on point to point with their current cost structure (or even a marginally reduced one as directors and staff will likely agree on).

In short, I am pessimistic.