New policy for paid and miles upgrades (AF/KL) - sept 2017
#631
Join Date: Apr 2005
Programs: Eurostar Carte Blanche, SBB-CFF-FFS GA-AG, SNCF Grand Voyageur LeClub
Posts: 7,836
Originally Posted by NickB;[url=tel:30725356
30725356]Something does not look quite right about these figures: 17K miles for a return affaires CDG-LAX in the old scheme suggests a medium level discounted business class (say I class) by someone who has no status at all in Flying Blue.
Where you are right: I forgot the bonus for Plats of 100%. So the correct number should be 34,000. Still, the new scheme is better.
But the comparison also works for no status. It‘s less miles in total, but still an increase from old to new:
Old scheme: 17,100 miles
New scheme: 22,000-25,000 miles
Where status vs. non-status makes a difference is obviously in the earn/burn ratio. Awards cost the same for status and non-status customers. It takes a non-status customer twice as long as a Platinum to obtain the same award. But it‘s still faster than before for the above mentioned travel patterns.
To achieve 45 to 50K earning on the new scheme with no status, you would need to pay between €11,000 and €12500 euros for you ticket, which would definitely be way above the price of an I class on CDG -LAX (in fact, even a full-fare, full-flex J class is less than that) . Are you sure that you are not comparing one-way in the old scheme with return in the new scheme? You would still be better off in the new scheme but nowhere near as starkly as this.
You are right that some people will be better off in the new scheme but they are pretty much the exception that confirms the rule, as the experience of most of us on FT has tended to show (I know: it's purely anecdotal data rather than rigorous stats but still...).
Same story as with the evolution of wealth distribution in the last 50 years: an ever tinier circle of persons earns an ever greater proportion of overall wealth . So, yes: for 0.00001% of FB members, the new scheme gives better earnings but for the other 99.99999%, the earnings are worse and for many worse by such a huge amount so as to make the miles-earning negligible.
Same story as with the evolution of wealth distribution in the last 50 years: an ever tinier circle of persons earns an ever greater proportion of overall wealth . So, yes: for 0.00001% of FB members, the new scheme gives better earnings but for the other 99.99999%, the earnings are worse and for many worse by such a huge amount so as to make the miles-earning negligible.
Take the above example of CDG-LAX-CDG. Previously a Platinum would have earned 34,000 miles. To be worse off under the new scheme, he would need to be on a fare lower than 4,250 EUR (4,250 x 8 =34,000 miles). For any fare higher than 4,250 EUR, he is better off. Looking up fares (without taxes) on expertflyer, all fares in J, C, D and many in I are above that. Only Z is always lower. The same is true on European flights: people on flex Eco or Business are better off than before. As shown above, both status and non-status earn more than before.
Is it realistic to believe that 15-20% of passengers fly on a high (P, F, J, C, D, Y) fare? I would think so. They are better off than before.
So, if loyalty programs shift towards rewarding and loyalizing the 15-20% high margin contributors and frequent customers, then that makes commercial sense for them and is better for those customers.
Last edited by San Gottardo; Feb 1, 2019 at 2:24 am
#632
FlyerTalk Evangelist
Join Date: Feb 2000
Location: London, UK and Southern France
Posts: 18,364
Admittedly I did that calculation based on earnings table which I don’t have in front of me, but off the top of my head longhaul business class earned 150% of miles flown, didn‘t it? So CDG-LAX at something like 5,700 miles would give you 5,700 x 2 x 150% = 17,100. Is that about right?
Where you are right: I forgot the bonus for Plats of 100%. So the correct number should be 34,000. Still, the new scheme is better.
Where you are right: I forgot the bonus for Plats of 100%. So the correct number should be 34,000. Still, the new scheme is better.
Yes, your earning on expensive fares might have gone up by 25 to 50 % but it does not mean that your miles purchasing power has gone up by anywhere near that as, with dynamic pricing, average prices also seem to have gone up quite substantially. I think that a gain of perhaps 10 to 15 % is closer to the mark.
Originally Posted by San Gottardo
think it‘s rather 15-20% of people that are better off.
Last edited by NickB; Jan 31, 2019 at 7:11 pm
#633
Join Date: Apr 2005
Programs: Eurostar Carte Blanche, SBB-CFF-FFS GA-AG, SNCF Grand Voyageur LeClub
Posts: 7,836
Your revised calculations make much more sense and are more in line with what I would have expected. The one thing that still looks to me over-optimistic is that you seem to assume that the burn side has remained the same in the move to the new system. I do not think that this is correct.
Yes, your earning on expensive fares might have gone up by 25 to 50 % but it does not mean that your miles purchasing power has gone up by anywhere near that as, with dynamic pricing, average prices also seem to have gone up quite substantially. I think that a gain of perhaps 10 to 15 % is closer to the mark.
Yes, your earning on expensive fares might have gone up by 25 to 50 % but it does not mean that your miles purchasing power has gone up by anywhere near that as, with dynamic pricing, average prices also seem to have gone up quite substantially. I think that a gain of perhaps 10 to 15 % is closer to the mark.
In fact, it could be even better: fly once to West Coast from Europe and get 50,000 miles, and then buy awards in European Y. Those often go for 8,500 miles. So for once flying to California I can afterwards travel from Paris to Lisbon and return, from Paris to Rome and return, and from Paris to Berlin and return, all for „free“ (taxes are low on these awards). That‘s not bad at all - which was the point I wanted to make: there are scenarios where the earn/burn isn‘t that terrible.
I do not think that it is anywhere near this by a very long chalk. Even if 15 to 20% of seats on a plane are sold in one of these buckets (and it already seems to me a rather high estimate), it will only represent a much smaller number of persons given repeat travel by the same persons. I would have thought that people consistently flying in higher fare buckets represent a tiny proportion of the flying population. Yes, they represent a much higher proportion of the airline's income but that is not the point: we have a scheme where the earning has become somewhat better (although not spectacularly so) for a minuscule proportion of the membership and considerably worse for the vast majority. Maybe I under-estimated it (there is a certain degree of arbitrariness in guessing a number past a certain number of decimals ) but I would be extremely surprised if it was higher than 1%,
A better plasubality test than how many seats are sold at high fares - which was the wrong approach I took - would be to look at the population of FB members. As far as I know FB has 17million members. 1% would be 170,000 members. Are there 170,000 status members? I could be wrong, but I think I had seen somewhere that the number of Gold card holders was about 100,000? In any case, it is obvious that it‘s not 3 million.
So your 1% assumption sounds about right.
#634
Join Date: May 2017
Location: LYS
Programs: FB Plat
Posts: 438
Just as a notice, I am able to see all the full numbers that you intended to hide.
#637
FlyerTalk Evangelist
Join Date: Feb 2000
Location: London, UK and Southern France
Posts: 18,364
A better plasubality test than how many seats are sold at high fares - which was the wrong approach I took - would be to look at the population of FB members. As far as I know FB has 17million members. 1% would be 170,000 members. Are there 170,000 status members? I could be wrong, but I think I had seen somewhere that the number of Gold card holders was about 100,000? In any case, it is obvious that it‘s not 3 million.
So your 1% assumption sounds about right.
So your 1% assumption sounds about right.
Certainly, as a Plat member, my earn/burn ratio is a very pale shadow of what it was before the changes even though some Power Plats like yourself rather than bottom-feeder plats like myself are doing somewhat better under the new scheme. All in all, my original figure of 0.00001% may not be that far off the mark after all.
OK. Let us not be mean and knock a couple of orders of magnitude and say that 0.001% of members are better off with the new scheme. That would mean a little over 1.5 in every thousand member at Gold level or higher being better off. That seems to me reasonably plausible. If we go down one further order of magnitude at 0.01% of membership, that would mean about 1.5 in every hundred members at gold or higher being better off. I very much doubt that we are anywhere near that.
Last edited by NickB; Feb 1, 2019 at 2:59 am Reason: typos galore
#638
Join Date: Dec 2014
Location: SJC / SFO
Programs: Flying Blue Platinum; Marriott Bonvoy Platinum; Hilton Gold
Posts: 785
Something does not look quite right about these figures: 17K miles for a return affaires CDG-LAX in the old scheme suggests a medium level discounted business class (say I class) by someone who has no status at all in Flying Blue. To achieve 45 to 50K earning on the new scheme with no status, you would need to pay between €11,000 and €12500 euros for you ticket, which would definitely be way above the price of an I class on CDG -LAX (in fact, even a full-fare, full-flex J class is less than that) . Are you sure that you are not comparing one-way in the old scheme with return in the new scheme? You would still be better off in the new scheme but nowhere near as starkly as this.
Nobody was sitting next to me on the B747 from LAX-AMS. Was wondering if the seat was blocked or just lucked out
Last edited by Sjondorn; Feb 2, 2019 at 1:43 am
#639
Join Date: May 2018
Posts: 757
Depends how you look at it.
Both Flying Blue and M&M have moved to spending-based mileage credits. That sucks for people who fly on inexpensive fares and/or have low status and/or want to qualify for status with segments, no doubt.
However, for frequent travelers that have status and with certain travel patterns, the changes are not that bad. I usually end up with many more miles on my intercontinental flights than I used to in the past.
Example:
- Flying Blue, Paris-Los Angeles return in Affaires: past, 17,000 miles. Now, usually around 45,000-50,000 miles
- M&M, Germany-New York return in Business: past, 17,000 miles. Now, usually around 28,000-36,000 miles.
On the burn side, things look a little different:
- Flying Blue has gone dynamic pricing. Whilst there rarely are Promos which for Europe-USA return in Affaires would be around 130,000 miles return, the going rate is more in the 250,000-300,000 range. But when I earn 50,000 per flight, requiring five flights to get one free is not a bad deal. It‘s basically an approx. 15% discount on the flight that I paid (if I happen to find the 130,000 miles flights, then less than three returns are needed to afford that - an excellent deal). And Flying Blue is really attractive for awards in Economy Class to European destinations, very often at half of what M&M would require in number of miles.
- Miles & More has not gone dynamic pricing. There is an award chart for all Star Alliance flights. With that, Europe-USA return in Business is 120,000 miles. When one earns 30,000 miles per journey, only four are required to get one for free
Availability is of course a different issue. Flying Blue does make seats available, but sometimes prices are really crazy. I have seen Paris-Lisbon one-ways in Economy for 390,000 miles and things like that. To get award seats at a „reasonable“ rate, the availability is more limited but not better or worse than with M&M. But M&M has one incentive to very very frequent flyer: fly a lot, get HON status, and you get a guaranteed award seat for you and 3 other people at the price of the award chart, rather than inflated dynamic prices.
In sum: I do hear those people complaining about the changes and I understand why they complain. But that does not mean that everybody is worse off. The frequent customers that bring in the money are better off than before. Which after all is the point of a loyalty program, isn‘t it?
First, how on earth is it possible to earn 45.000-50.000 miles on a CDG-LAX J fare? Even assuming you have Platinum status so earning points x8 per spent euro, you would have spent 7.000 euro’s on a CDG-LAX round trip? That is at least 3 times the normal price. I booked that round trip in J for 1.800 euro’s this summer and that is even not the best possible price. 7.000 euro is WAY overpriced.
But yes you are right. If you are consequently booking last minute busy routes like CDG-LAX then you pay these kind of fares. But who does that? Maybe you do?
Actually I earn sometimes more now. Short haul Y trips cost often 400 euro’s which give me around 2/3.000 miles each. In the old days, the trips were paid based on distance and often giving me 1.000 miles or less.
But long haul Y is a total disaster and the losses there do not weigh up to the increased earnings on short haul Y.
Anothet thing are DoD upgrades. Before I was able to upgrade on CDG-JFK from Y (K-class ticket) to J for 35.000 miles. Today the amounts are often at 100.000 miles. That’s triple!?
Award availability is less now, but they promised more. Very disappointing. And despite FB will say: but we offer now 53.000 for a one way CDG-JFK leg in J instead of 62.000, the reality is that because of the dynamic pricing, these routes often lack availability and even if there is availability, the fares often exceeds 250.000 miles which is even higher than P fare on the same route. For me that is equal to no availability because who would pay, let’s say, 265.000 miles for a one way J leg when you can fly P for 200.000?
So in order to earn 200.000 miles, you have spent 25.000 euro’s (without taxes!) on flight tickets, even being a Platinum member. And be serious, who spends so much in a reasonable amount of time ? For the normal traveler like me, I need to book at least 70 short haul Y trips, which often are more legs. So that means flying around 200 flights to get 1 one-way J trip as a reward.
I don’t think this is attractive in any way.
#640
FlyerTalk Evangelist
Join Date: Feb 2000
Location: London, UK and Southern France
Posts: 18,364
I booked that round trip in J for 1.800 euro’s this summer and that is even not the best possible price. 7.000 euro is WAY overpriced.
It seems to me that you look at it from the perspective of an individual who pays for their own fares (I know the feeling - I am in that boat too ) rather than from that of someone at a medium to high level of seniority in a large corporation and traveling for business.
#641
Join Date: May 2018
Posts: 757
While San Gottardo's initial calculations were a bit off, the revised figures make sense to me: a D class ticket to CDG-LAX would be a shade under €7000, so within that ball park figure. That would not be that outlandish for a business trip even though an increasing number of companies are tightening the purse strings and the number of individuals flying on these kinds of fares has tended to diminish over the last decade.
€1800 for CDG LAX return is very good value but also very a-typical. The cheapest possible CDG-LAX fare in affaires on AF (in Z class) is currently in the region of €3500/€4000 and that is for a totally inflexible ticket, which may not be suitable for some business trips.
It seems to me that you look at it from the perspective of an individual who pays for their own fares (I know the feeling - I am in that boat too ) rather than from that of someone at a medium to high level of seniority in a large corporation and traveling for business.
€1800 for CDG LAX return is very good value but also very a-typical. The cheapest possible CDG-LAX fare in affaires on AF (in Z class) is currently in the region of €3500/€4000 and that is for a totally inflexible ticket, which may not be suitable for some business trips.
It seems to me that you look at it from the perspective of an individual who pays for their own fares (I know the feeling - I am in that boat too ) rather than from that of someone at a medium to high level of seniority in a large corporation and traveling for business.
I can live with the fact that people like above earn more miles on extremely high priced tickets compared to lower fare classes. And the other way around too, people earn less on lower fare classes.
I do have a problem with the fact that there is less availability and in general an extreme increase in amount of miles needed for a DoD upgrade or award seat. It is not balanced anymore. Plus there was no warning, FB painted a nice picture they couldn’t make happen and now I have a nearly worthless amount of miles.
The majority of FB frequent flyers lost value of their miles. It is a disgrace. A FU from FB to their most loyal customers.
#642
Join Date: Apr 2005
Programs: Eurostar Carte Blanche, SBB-CFF-FFS GA-AG, SNCF Grand Voyageur LeClub
Posts: 7,836
I’m very sorry but your calculations do not make sense at all.
First, how on earth is it possible to earn 45.000-50.000 miles on a CDG-LAX J fare? Even assuming you have Platinum status so earning points x8 per spent euro, you would have spent 7.000 euro’s on a CDG-LAX round trip? That is at least 3 times the normal price. I booked that round trip in J for 1.800 euro’s this summer and that is even not the best possible price. 7.000 euro is WAY overpriced.
But yes you are right. If you are consequently booking last minute busy routes like CDG-LAX then you pay these kind of fares. But who does that? Maybe you do?
First, how on earth is it possible to earn 45.000-50.000 miles on a CDG-LAX J fare? Even assuming you have Platinum status so earning points x8 per spent euro, you would have spent 7.000 euro’s on a CDG-LAX round trip? That is at least 3 times the normal price. I booked that round trip in J for 1.800 euro’s this summer and that is even not the best possible price. 7.000 euro is WAY overpriced.
But yes you are right. If you are consequently booking last minute busy routes like CDG-LAX then you pay these kind of fares. But who does that? Maybe you do?
Because *you* paid EUR 1,800 for a return (?) CDG-LAX and because *you* think that EUR 7,000 is not normal, and because *you* cannot imagine that there are people who pay these fares you come to the conclusion that the calculations I showed make no sense at all. When just the post before another poster explained how he earned 75,000 miles on a roundtrip to California.
Just a little random test: CDG-LAX-CDG, from February 26 to 28, Business Class: lowest fare EUR 6,774. That is not last minute. Yields 50,176 miles for a Platinum. Not everybody and probably not you fly at these fares, but some people do. And those are the customers they try to lure with more miles.
The fact that they have very little availability at lower redemption rates is a real issue. Which is why I also gave the example of M&M which has made earnings EUR-based but maintained awards redemption table-based. That then becomes more attractive for frequent flyers, as the price of awards is fixed and at higher fares it takes less flights/time to earn them. You may have noticed that my first post on the topic was in reaction to someone saying that M&M was a joke just like FB these days. I didn't disagree completely, but added another perspective.
#643
Join Date: May 2018
Posts: 757
Because *you* paid EUR 1,800 for a return (?) CDG-LAX and because *you* think that EUR 7,000 is not normal, and because *you* cannot imagine that there are people who pay these fares you come to the conclusion that the calculations I showed make no sense at all. When just the post before another poster explained how he earned 75,000 miles on a roundtrip to California.
Just a little random test: CDG-LAX-CDG, from February 26 to 28, Business Class: lowest fare EUR 6,774. That is not last minute. Yields 50,176 miles for a Platinum. Not everybody and probably not you fly at these fares, but some people do. And those are the customers they try to lure with more miles.
The fact that they have very little availability at lower redemption rates is a real issue. Which is why I also gave the example of M&M which has made earnings EUR-based but maintained awards redemption table-based. That then becomes more attractive for frequent flyers, as the price of awards is fixed and at higher fares it takes less flights/time to earn them. You may have noticed that my first post on the topic was in reaction to someone saying that M&M was a joke just like FB these days. I didn't disagree completely, but added another perspective.
Just a little random test: CDG-LAX-CDG, from February 26 to 28, Business Class: lowest fare EUR 6,774. That is not last minute. Yields 50,176 miles for a Platinum. Not everybody and probably not you fly at these fares, but some people do. And those are the customers they try to lure with more miles.
The fact that they have very little availability at lower redemption rates is a real issue. Which is why I also gave the example of M&M which has made earnings EUR-based but maintained awards redemption table-based. That then becomes more attractive for frequent flyers, as the price of awards is fixed and at higher fares it takes less flights/time to earn them. You may have noticed that my first post on the topic was in reaction to someone saying that M&M was a joke just like FB these days. I didn't disagree completely, but added another perspective.
However, you describe in your example that you (or your employer) structurally purchases extreme high J fares. I hope for you (or your employer) it’s not the case.
In any way you look at it, your example is not realistic for 99% of the FB frequent flyers.
#644
Join Date: Apr 2005
Programs: Eurostar Carte Blanche, SBB-CFF-FFS GA-AG, SNCF Grand Voyageur LeClub
Posts: 7,836
In any way you look at it, your example is not realistic for 99% of the FB frequent flyers.
Who said it was? I had made an earlier statement that it would be 10% of FB members, but NickB showed me that my assumptions were wrong.
EDIT: don't get me wrong, I am not saying FB is attractive. It isn't, because of the dynamic pricing of awards. But I wanted to show i) that the other program that statement was made about (M&M) doesn't have dynamic pricing and is more attractive ii) that there are people who gain more miles than before, and that those are the cases that are worth for a loyalty program to reward iii) if you think about the econmics - buy three, get one free - they aren't bad. The absolute price (EUR 25,000) may be too much for many, but that doesn't make the ratio bad.
Last edited by San Gottardo; Feb 2, 2019 at 5:29 pm