milehighclubnz

Ok hostile may be too strong a word but I feel it really is one of the most flyer-unfriendly programs for frequent or casual flyers.

I got my membership pack today courtesy of NZ's "Slice It" campaign. So I was hooked by their membership waiver - I've flown NZ many times and I was pretty impressed by the opposite of generosity (what's the word for it?) of Airpoints, so I've been putting my miles to UA and BD and have benefited from them tremendously, mostly in NZ J!

So I thought ok now I could join Airpoints for free, I might earn some non-flying points here and there and keep me more motivated to buy NZ tickets over the likes of EK and QF.

Surprise! I just found there was a $30 "account maintenance" fee, waived if you have a Global Plus credit card or fly NZ once a year. I know I know that it's easy to fly NZ once a year, but I don't want to when I HAVE to, to keep that fee away. The idea of account maintenance fee is plain absurd - unlike credit cards which annual fees give me travel insurance and cashback (I love National Bank's Gold Thoroughbred - even better than NB's Platinum I say), what a fudge do I get from Airpoints? The elite benefits are really earned and widely available from competitors at much lower cost. I understand that airlines cancel the miles/points/account after a period of inactivity, but charging people to be actively loyal to it? People who do pay $30 (or the kindly reduced rate of $20) are being screwed forwards, backwards and downwards.

I also signed my uncle up for the Slice it campaign. He's flown NZ domestically like twice in the last 10 years, and when he does travel there're many alternatives like EK, QF to Australia, and CX, SQ... to Asia. Casual flyers won't take NZ because they want to keep their frequent flyer account, and value-driven/cheapskate frequent flyers like me won't put miles in NZ if the program is so poor. For example the grand total of Airpoints retail partner is......

ONE!

And the Airpoints Retail Oscar goes to.....

DFS Galleria!!

I can't think of any other airlines loyalty program in the WORLD that charges an enrolment fee, a bloody yearly account fee, and having an "exclusive" partner in retail. I mean there are some really bad programs out there (Eva Airways of Taiwan for instance), but NZ is in the league of its own.

I would like to have some comments from FTers on the purpose/effectiveness/direction of Airpoints - does Air NZ want to make $$ out of Airpoints? If so they should have way more partners and be creative with the availability of points - dining, shopping, etc. I think it won't deflate the points because the redemption requirement (on NZ metal at least) is constantly changing, and NZ won't bulk sell points like UA to Chase or DL to Amex, which devalues their miles.

This brings one off-topic: I think NZ consumers are used to be fleeced by the corporates here that they think fleecing is the norm - for example Westpac and ASB charge their credit card users to enrol in their reward programs. What a fudge - I have to pay to be rewarded for MY business?

I realise NZ is small and there is a lack of competition. But the lack of RESISTANCE to the status quo is what really hurts NZ consumers. Look at grocery shopping - 90%+ of kiwis go to either Foodstuffs or Progresive. If there were even 10% more to shop at local vege, fruit shops, butchers, etc that would keep the Big Two more honest. Same with credit cards, if more kiwis realise that compared to Aussies we are paying more to get less, and stop using them or look out for the best deal more often, then banks will better their offers.

I am going to return my uncle's and my Airpoints membership packs to the same Slice It P O Box - I just couldn't see myself using the program, given its severely limited earning options, and buck for buck, much better returns from other programs, even QF included.

As a dissappointed soon-to-be ex-Airpoints member, and an indirect shareholder of Air NZ (whose biggest shareholder is NZ Govt), I am going to write to Anita Hawthorne, Manager of Airpoints, to express my opinions on the state of the program - it could do a lot better to get a win-win for the company and consumers.

Cheers

milehighclubnz

Kiwi Flyer

I think the annual fee is a good idea. Someone who can't even fly one paid flight a year is not a loyal member, and costs the scheme money.

Perhaps sacriligeous to say this on FT, but loyalty is a two-way street.


Disclaimer - I'm not a NZ apologist. I do agree the program is mean. However I do like the idea of no fly annual fee.

kiwibigdave

I'm somewhat interested in your definition of "actively".

Please don't confuse 'Aucklanders' with 'Kiwis'.

Well, you've got that part right. I don't think Air NZ make too many apologies for aiming their FF programme at high value FFers, and that frequent Y travellers and casual flyers are simply not their target audience. Is that mean? Probably. Does the consumer have alternatives? Absolutely ...

Good thread though. About time we had some fighting talk here ^

stewardo

The Qantas scheme has always charged an enrolment fee, though there is a free membership promotion for NZ residents at present.

DFS is a pretty good partner for an airline - I tend not to carry my NZ airpoints card except when travelling with NZ, so its nice that its always available when going through the DFS checkout. No points earning on tobacco anymore though. Contrast with BAA worldpoints where you have to remember the card, and then convert worldpoints to BD or BA miles...

Also, which other retail chains would Air NZ sign up with? Like you say, 90%+ shop with Progressive or Foodstuffs, and they already have their own loyalty programmes - Foodtown card and Fly Buys. Smith & Caughey? Kirkcaldies? Neither of them appear to want to track customer spend terribly... and none of them are particularly travel-related.

milehighclubnz

I say 99% of the population are loyal and nice AFTER they receive the loyalty/nice gestures from the other party, especially in a commercial setting. Airpoints is not Krisflyer PPS, which targets a VIP crowd. Airpoints is a general loyalty program that tries to maintain existing customer base and enlarges the company revenue and encroach competitors market share (as evident in the Slice It campaign). How does it get more people interested, and therefore generate more revenue, by saying "$50 to join us please, and you pay $20 if you DON'T fly us".

I mean customers can contribute revenue apart from flying, because for many fliers, NZ's program/pricing/product aren't the best option and why would I choose NZ if I could get better deals elsewhere unless I am stuck outside the main trunk routes? NZ could capitalise on its local advantages to generate revenue other carriers can't or won't, more on this later. Also I do fly NZ, I just don't want to put my miles with them.

On a sidenote, I've found better carriers in the Star Alliance (excluding minor or unfamiliar ones like TAP Portugal and South African) usually have worse loyalty programs do they not? SQ, NZ and maybe TG sprint to mind, where their services and products are way better than their FF, while AC, UA and US have better FF than their products. I don't think it has to be one way or another.

Credit/account expiry is a free and effective control to weed out non revenue generating customers and keep the admin costs in control. Trying to make $20 out of it is greedy, pissing people off and a pity tactic.


NZ needn't make apologies for aiming at high value FFers, but it doesn't need to punish low value FFers (such as myself) or casual flyers either. High value FFers who are loyal to NZ for patriotic/corporate/whatever reason will stay with NZ anyway, and for that matter they don't have to join Airpoints to be high value to them, if you meant by business premier-paying pax. I know that if I were high value I still wouldn't join Airpoints with the current offerings because others like BD, OZ and even LH and QF get me more goodies than NZ does.

I can be active in participating Airpoints without flying IF such opportunities count. I can put my hotel stays in Airpoints for example, but they don't count to waive the $30 annual fee, whereas with many other airlines they do, and they charge nothing to begin with. I WANT to convert my Fly Buys points to Airpoints, I HAVE to have a Global Plus card. No chance given the current benefits offered by BNZ or Amex in NZ, and the simple straightforward alternative by National's Thoroughbred. 1% return on spending is the benchmark and not many NZ cards give you that, and Thoroughbred is truly 1% cash, unless you spend NZ$50000+ a year on it which the cashback is capped. By the way I don't work for ANZ/National, I just use the best value credit card out there and it happens to be Gold Thoroughbred.

Why do Fly Buys and Global Plus have to go hand in hand to earn Airpoints $? Does BNZ have a stake in Fly Buys (and loan/finance arrangement with Air NZ)?

I also disagree that consumer have alternatives - NZ enjoys monopoly in provincial markets and I attribute that to small population and non-existent rail network. Compared to Asia, Europe and North America, non-flying activities are non-existent. I blame this on the NZ public less experienced/educated about choices/competition available elsewhere and Air NZ content to have its FF just being a FF, not a potentially much more profitable marketing and revenue generating machine that it could be. More on this later.


QF is also a co-defendant with NZ on ripping off new FFers, make no mistake. These two (and CX's Marco Polo Club, which is separate from Asia Miles though) are the only programs I am aware off that charge customers to be interested to frequently fly with them.

Had NZ had its sights higher Fly Buys wouldn't have existed - Airpoints could have been like AA's AAdvantage or UA's Mileage Plus, a wide array of retail and other partners. Even now NZ still has ample opportunities to generate more revenue, work with NZ businesses and us NZ consumers can benefit. Dining for example, restaurants and even joints like Burger King (which used to be in Fly Buys) would probably have higher turnover if they offered incentives like Airpoint Dollars, and they and Air NZ could offset liabilities by offering meal vouchers/discounts.

A loyalty program doesn't have to be travel-related. You just have a foundation/cornerstone/marquee company that launches and supports the currency, then expand from there. I think AC's Aeroplan, CX's Asia Miles and even LH's Miles & More are good examples of this.

Speaking of tracking spends, I think most NZ businesses just aren't fired up to beat their competition - I mean in the US you have Barnes & Nobles vs Borders vs Amazon, KMart vs Target, T Mobile vs AT&T, Adidas vs Nike....
each of those participates in multiple airline loyalty programs (although most of them are done online). My point is that they don't settle for status quo, they want to beat their competitors and gain marketshare/revenue as much as they can, even though in many cases they probably don't need to or have marginal impacts. I know NZ is small but that's not an excuse, especially for companies which rely more on discretionary spending and not in cosy duopoly like Vodafone-Telecom and Foodstuff-Progressive

I think Air NZ, and many other businesses, chronically think small and discover/adapt to competitive/innovative practices too little too late. Had NZ had better business model/financial arrangements or even started Freedom Air/LCC early in Australia, Ansett would have stilled stayed and there wouldn't be Virgin Blue and its sisters, not as big as they are today anyway.

The fact that QF, NZ and NZ banks that charge customers to be loyal and have the ABILITY to earn rewards for so long astonishes me. Sheep are being fleeced for so long that they now are happy to queue up and ready to get naked.

Why doesn't NZ fly to South America? I hear that Lan Chile, and even Qantas do a brisk trade on Santiago and Buenos Aires routes. And after them we just have the lousy Aerolineas Argentinas - I think passengers on both sides of the South Pacific deserve better and will pay to have a Star airline to run this route.

NZ can really can the Beijing route and move the aircraft to fly to Argentina/Brazil where they can even get transit traffic from Star partners from Europe.

NZ could be a great transit point bridging Asia and South America, but the lack of routes and the introduction of transit visa killed it.

Xiaotung

You could write to Airpoints as I have done but I imagine that you would only get an answer like "we can't change the program to the satisfaction of all members." And now they have one more reason they can use which is the ability to earn Status Points even on grabaseat fares. You can't really argue that this is for high value flyers, can you?

Unlike most other carriers, NZ sees loyalty programs as liabilities rather than assets. Even though you can purchase any seat available on sale, you are burning Airpoints at a much faster rate, ie decreasing their liabilty quicker. Most people can't be bothered to go into this depth and think Airpoints ia brilliant. That's why Airpoints is still receiving some most innovative program awarded by some magazine. Mathmatically, members are not better off. I believe Airpoints rules are written by accounting firms like PwC which makes sure NZ is always the winner.

I can live with the annual fee but I can't stand the fees charged to book a Star Alliance awards. There is no option to book this online and why the hell can't they put this in the redemption rates. $100 per booking is a rip off. Is there many programs out there that charge you fee for a reward? Rewards are meant to be free.

GlobalPlus Gold Amex gives you the best value so far. 1 Airpoints Dollar per $66.67 spent. I believe BNZ was the co-founder of FlyBuys.

milehighclubnz

I am going to write to Angela Hawthrone, the Manager of Airpoints when I return my membership pack (pretty temped to "Slice It" but that would be rude) with a copy to Rob Fyfe (yeah I know it's a long shot that he'll read it, but doesn't hurt trying)

Earning Status Points (or EQM in US lingo) on the cheapest fares is nothing to brag about. I say the existing "high value" flyers fly NZ not for the value of the Airpoints program, but for its quality services and other reasons. They pay for the tickets but they aren't necessarily Airpoints members - what Air NZ should do is to generate more revenue from those flyers by offering more opportunities and working with non-travel partners (eg retail, dining, etc), to get the $ flyers would have otherwise spent with a competitor. For example one pays for his travel on Air NZ, but credit his miles to bmi (therefore bmi gets to earn the potential revenue such as redemption fees, sale of miles, shopping portal rebates from sellers, etc), and worse uses ANZ Qantas card for his purchases, instead of BNZ Global Plus because he thinks Airpoints is crab.

What magazines gave Airpoints awards for innovation? Cosmo or TV Guide?

Yowza $100 booking fee for Star Alliance awards? Is that for urgent ticketing (less than a week prior to departure or so)? Foreign airlines do charge a booking fee, but usually for urgent ticketing and changes.

Global Plus Gold Amex is only good if you are a user of Airpoints - I don't think Airpoints Dollars are worth as much as cash. If Airpoints were even like QF's program then I would have ranked it higher or on par with National's Gold Thoroughbred, but at the moment it's not worth it.

Speaking of FF programs and airlines, I wasn't a big fan of United Airlines before I knew more about and joined Mileage Plus. A good loyalty program does change purchase behaviour - before my Mileage Plus days I was with Thai - I flew NZ, TG, SQ and LH the most and I knew TG's program was better than the other two. UA never came across my mind until I learned the art of Frequent Flyer Programs. So I flew more and more with UA instead of SQ and LH on Asia-US and US-Europe, even though UA's soft and hard products were, and still are, inferior to SQ and LH.

I think UA's treated me fairly well, with 100% bonus miles on UA metal, domestic upgrades and award tickets on NZ, TG, NH business class tickets.
I've given UA a good portion of my flight budget to fly Australia-US, Asia-US and US-Europe, often on the expense of NZ and SQ's. I am not a "high value" flyer by any means, but I do believe some extra business is better than no business at all.

Cheers

air_boi

Interesting diatribe.

But were you aware that at the 2009 Loyalty Awards Air New Zealand won the award for the airline industry's most innovative frequent flier programme and that "Air New Zealand was chosen by the 250 delegates at the event as the most outstanding loyalty programme."

The Loyalty Awards are organised by Airline Business and Global Flight and recognise the airline industry's best frequent flier programmes.

http://www.flightglobal.com/blogs/ai...-the-spot.html

Just goes to show, different strokes for different folks!!!

DCF

I'm very happy with Airpoints.

I hit Gold Elite each year by flying typically one trip in BP to the USA,one in BP to the UK and one in BC to Tahiti, and so do my wife and kids.

And this allows us two long-haul upgrades each year,which we apply to a full Economy fare to HNL for a family holiday.

The program is designed to reward high-value passengers like us and to drive away people like the OP who aren't loyal passengers and who want rewards even though they deliver no custom to the airline. Fine by me.

splatnz

I quite like the NZ airpoints program. For me a couple of decent long-haul trips in Business a year keeps me at gold status (great for lounge access etc for frequent short-haul and domestic flights in economy). Yes, the earning rate isn't great but I can 'spend' them on whichever flights I like (usually grab-a-seat) which is a lot more convenient than most airpoints programmes.

As others have mentioned I also don't have an issue with an annual fee if you don't fly on NZ. If you don't fly they still have the cost structure associated with the membership but aren't making revenue unless you've paid to sit in one of their seats

Slightly OT but seen as it was mentioned twice - I'm not sure that NZ/OZ banks are all that into ripping people off. Yes they charge fees for things that aren't charged in other countries but they also don't charge for many things that people pay for overseas (eg home loan applications). I think also if you compare the cash rates in both countries to the rates they charge for residential mortgage rates the margin is much smaller than some other countries. In the US for example (FFR 0.25% and average mortgage rate of just under 5%) compared with NZ's OCR of 3% and floating mortgages around 6.5%.

Love the thread though, gets you thinking about what NZ could do better!

milehighclubnz

Air NZ was awarded for their use of technologies, not for the overall program excellence.

"Air New Zealand's Airpoints loyalty programme combines the creative use of mobile and web technology to radically enhance its customer experience,"

and Global Flight, one of the judges and co-sponsors of this feel-good awards, works more on operational issues and for the management, not on the big picture/strategic focus and for other stakeholders:

"Privately owned and acting independently of any suppliers, the company can fully focus on delivering value at the critical management level of loyalty issues rather than upselling other products or services."

In fact of all the judges, perhaps apart from the guy from Air France/KLM, weren't really that representative of the airline industry. And how did they get someone from Mexicana (nothing against it, but it wasn't a major player on a global scale)?

I am happy that Air NZ/Airpoints are using technologies to help the flyers and the company, but speaking of the value overall Airpoints program, this is really style than substance. If you poll 250 FTers here I doubt it will win the most innovative or anything at all. Look at the FT survey on Airpoints I see a lot Cs and Ds - even our legendary Kiwi Flyer didn't have a high opinion of Airpoints. Again the airline is great, but the airline's FF program isn't.



DCF, if you are happy with Airpoints, great, enjoy it. But you could be even happier if you put your miles with bmi, Air Canada or even Lufthansa instead of Air NZ - you didn't even need to buy an economy fare to get an upgrade; bmi's miles would get you business class tickets, and one roundtrip from NZ to UK in J would get you Star Alliance gold with Air Canada - with both you fly NZ, the only difference is that you put miles with Diamond Club or Aeroplan instead of Airpoints.

Supporting local/national airline doesn't mean you have to support its frequent flyer program.

And you misunderstood my points -

"The program is designed to reward high-value passengers like us and to drive away people like the OP who aren't loyal passengers and who want rewards even though they deliver no custom to the airline"

Quite opposite - I say the current Airpoint program drives away more high-value passengers than it retains/attracts. And your "us" vs "them" mentality is not what I had in mind nor what the program is about. It's about "We", the airline customers, the New Zealand public who are stakeholders of the company.

I deliver custom to NZ by flying them instead of QF/DJ/EK and I can deliver more if Airpoints provide more earning opportunities (just look at Virgin Blue Velocity's retail partners vs NZ's. One could earn DJ points with purchase of iTunes!), I just choose not to put my miles with Airpoints. I earn my rewards like everyone else, and I started this thread not because I thought I didn't get enough rewards from NZ - I thought there weren't enough opportunities and too many restrictions to EARN rewards, and that puts NZ to a competitive disadvantage compared to DJ and QF for example.

Again it doesn't have to be high value flyers vs not high value flyers - a good program can cater to, and generate revenue from both market segments. The elite benefits will always be there and one has to earn them; somehow I feel you want to keep the pie small to your benefits but don't really care how the company does over the long run with its loyalty management strategies.

You are fortunate to be able to fly long haul business class, and can transfer awards, have no annual fees..etc. But most of the flying public is not, and Air NZ is not an exclusive airline by any means, The fact that it is majority-owned by the NZ government is more of a reason that its loyalty and other policies should be more inclusive, at least to flyers based in NZ. Being more inclusive does not mean being less profitable, in fact I think it's the opposite. I am not a socialist (quite far from it), I am just looking at things from CSR, competition,financial and consumer perspectives instead of purely administrative/operational viewpoint.

Air NZ has a lot of good stuff going for it, and I like it for its products and services. I just think that Airpoints could do much better - both Air NZ and consumers can gain.

Cheers

Gotta Requalify

My flying depends on the project I am on, one year it could be all to Asia, the next to the US.

Going from MEL to KL or BKK, is hard on Air NZ, so for a year, I don't fly on Air NZ. I send all of my business class points to Air NZ, but have to pay $30, because I haven't flown on one Air NZ flight?

I am the high value client they want, whenever I go home for christmas, the family of 4 fly business class. I fly 200,000Kms a year in business. Yet what's the point of sending non Air NZ flights to airpoints if for one year, they want to charge me $30. So I send my points to Lufthansa or SQ, and the year I do fly across the pacific a lot, I fly on United instead of Air NZ, as I get 25% extra LH miles on UA.

My wife & children are enrolled in Asiana's scheme, as if we want to go to Thailand in business for a holiday, that year they won't fly on Air NZ so would all be up for a $30 charge. If we could all be in Air NZ, I would work harder at flying Air NZ, to use my points for upgrades for family members.

I make Gold Elite every 2nd or 3rd year, if something that just happened (family related) hadn't of just happened, I would consider letting Air NZ airpoints fade away and just send my points to LH or SQ, but I will be doing weekend trips to NZ every couple of months for this year, so will keep it awhile longer.

Overall - I think the Airpoints scheme sucks, and would much prefer Ansett's Golden Wings. Damnit - lost 250,000 points when they went bang. Somethings you never forget.

everywhere

Another satisfied customer

Rebound

I started off on BMI's Diamond Club, but i went back to Air NZ as you accrue status points too and i've found with my trans-tasman flying its usually the cheap fares. I'll reach Silver faster on Air NZ and with myairnz and the epass its kind of better for choosing seats etc with KC.

mattyroo

In one word - YES.

I am one of their high value clients, and I think there program is bl**dy awful.