Flying Lawyer

Good for me

Award availability is great and current earning/spending ratio is great either. I did a random check for FRA-HKK and FRA-NYC. For New York there is F/C availability for the full month with the exception of January 12. For Hong Kong most of the dates are available with the exception of outbound on January 9 and inbound January 16/18/21 are available in F/C. This is what I need - First Class availability for cheap money.

And when it comes to dilution: There might be 0.01% of the customers playing it the way I and certain others do. The number of miles in dormant accounts or miles spend for merchandize and Y-Class flights is enormous. THIS is what the average customer does and the program aims at the average customer. BTW: DC is insanely diluted: These crazy guys give me 625% on my cheap TG (or even worse TK or MS) First Class tickets. I did the math and with DC it is "buy one ticket get one award ticket for free". The program is so much diluted that LH refused to accept DC Cash & Miles award for LH's FC. For good reason...

Being ingrained in the DC's (or another FFP's) world, you might miss one point: M&M is not a pure FFP. It currently is the biggest loyalty program in Germany and it is not only used by LH but several entities on the ground.

Kevincm

Ok.. calm down dears.

Whilst we all have our personal opinions of whatever programme we're going to keep or use, remember the program you need to use and how you intend to credit miles to it.

Whilst not all programmes are built the same, remember that a programme:
- Should be suitible for your needs
- Suitible for attainment (if your target is *G, then how are you going to get there?)
- Suitible for travel class you fly (If you fly in discounted economy, where is the best place to dump those miles? If you fly in C, choose a programme that rewards C class flying)
- Suitble for what facilities you want (ie do you want miles to spend or lounge rights... or both?)

At the moment, we are ingrained in the Diamond Club world because this is the here and now.

Whilst we can all try and plan the next step, until things are revealed properly there's not much point crying over the milk that has been already spilt.

So whilst M+M is a good option for some people, it makes less sense for other people (and on the fares I fly on - nigh impossible).

Randy Petersen had some excellent advice on Chooising a Programme. It could be worth people reviewing it.

Flying Lawyer

I held from the very beginning that I expect the opportunities in the UK to become similar to the opportunities in Germany. Every change (from DC to M&M) has some farewells and some opportunities.

I am personally not sure whether I am "them" or "us". I hold two passports, work quite a bit of my time based in London and I am a member of M&M and DC.

If "us" is in the British Isles and "them" is on the Continent, than I feel it is more "us" against "them". From the very beginning I felt a certain "hostile approach" from some people of this board towards DC becoming M&M and bmi becoming LH (UK). The language was somehow like the SUN's language after a England vs. Germany football match. This is really very sorry and we should calm down. We all want to make the best out of a program and this is the idea behind it - not to waive the national flag.

What I tried to do is nothing but to give an overview of some of the earning possibilities I enjoy on the Continent with M&M resulting from the fact, that it is the number one loyalty program in Germany. Maybe I failed and did not convey this intention. Sorry for that. I am however amazed how negatively this is taken by some people. Well. However, I expect that LH will try to achieve the same recognition for Miles & More in the UK. If this is not interesting for some people here, I simply shut up. But one thing is for certain: "They" (LH) are taking "us" (bmi) over....

You may use every pet name you wish; I certainly do not fancy the use of WWII vocabulary. And when it comes to names: I would not certainly not call bmi "Britischer Mist" which would be a nice play on word. If you follow the ba forum, you see how sensitive some people in the UK can become if you call that airline by any other but its native name (even if the nickname is political correct). They even put it in their sticky....

TuxTraveller

Really good point! We are taking this discussion very seriously without actually knowing what we're comparing with. No one has said DC is going to be replaced/removed (Yes I know it is likely), but it hasn't been officially announced. Many things could change. BMI and DC could be sold to another third party. Perhaps VS is merged with BMI or perhaps BMI takes M&M. We really don't know yet. Until I hear more I will continue to use DC and credit my *A flight to DC (I also have accounts with SK EB and LH M&M for historic reasons), as that is currently the best programme in my opinion. I will decide what to do when more details become apparent.

I think this is where your expectation differs from myself (and probably a lot of other people on here). This is likely the root of the differing opinions. I look from past examples where M&M has clearly not been geographically modified for a new region and I haven't seen any evidence from LH or M&M that it is likely to create similar opportunities in the UK if it were to takeover DC. If M&M did create UK earning opportunities equivalent to those in Germany, I think a lot of us UK based DC members would likely look at M&M slightly differently and be less likely to jump ship (tho time will tell).

Guava

Rightly so, Flying Lawyer's expectation that suddenly there will be Germany-like M&M promotions in the UK because Lufthansa takes over BD DC is completely unrealistic and Roger's post here explained very well why. The fact is these kind of juicy promos that he and many of his fellow Germans are enjoying stem not so much from LH marketing but rather the fact that Germany appears to be a late adopter of CC and FFP. Not surprisingly, when LH M&M migrates outside of Germany, such deal simply disappears as it the case with LH M&M credit cards in the USA. See, same marketing team at M&M but completely different results.

The concerns echoed by A_Lee are also quite valid. One has to wonder about the sustainability of LH M&M as a frequent flyer program a few years down the road seeing how this relatively young program is being flooded with with non-flying related mileage. In a way, all the non-German flyers could end up "subsidizing" this sustainability of LH M&M in Germany without being offered the same kind of opportunity all along, precisely because the vast majority of new miles created will only be available for domestic German customers. But this won't last forever. When an airline is being generous with flying mileage credit, the process is usually sustainable. BD giving out 625% mileage on paid F is actually fine because flying is a core business for BMI and this strategy allows BD to attack BA heads on, which is a necessity given BA's establishment status. What BD hasn't done is devaluing its FFP with non-flying mileage and hence the reason why, many of us came over in the first place seeing what was happening in the U.S. and knew how it was going to end...

The short-term solution for now seems to be stay put with the BD DC program, like you stated and others have repeated. If you can anticipate some future C&P or one-way bookings within the next year, you should book them ASAP because those might disappear sooner than any official changes to BD DC and would be a sensible precaution.

Flying Lawyer

Wait and see

Excuse me, but this is simply wrong: The 625% are only for flights NOT on BD (BD has no F/C) and it costs BD a substantial amount of money for guys like you and me. THEY have to sponsor flying on other airlines by awarding these exatra miles out of their pocket. Great business approach. And due to comping each and anybody to BD gold they have to sponsor thousands of flyers all around the globe for getting into other carriers's lounges. Great business approach.

Selling miles to third parties (because these may use the miles as incentives) is directly the opposite approach. When you read LH's annual report, one gets (so I was told) a feeling how many miles are in dormant accounts and will never be used. Selling miles to others is nothing but printing money knowing that only x percent of this money is ever spent.

I fully agree and I will continue to collect 625% miles as long as possible and spend these on short o/w or open jaw business trips within Europe. I only hope DC will survive until I have finished my recent SQ RTW in F. Something in the range of 6900 USD for the ticket incl. 150k BD miles.... This is insane and can only be a substantial loss for BD (if these 150k miles are ever used).

Guava

With all due respect, many of us, old timers here, have long outgrown those generic advice. I think those are fine for people relatively new to FFP, but for more seasoned users of this business, not sure how much more value they can provide. One thing I would add and is sorrily missing as a criteria (of choosing FFP) is its long-term sustainability. I don't think you ever see this as a measure in any of his literature but this is in fact the #1 headache for Randy's own home market, United States of America. Delta just imploded, UA now has close to crazy redemption level + blocking of all NC availability space after April, Continental = No pass, there are very few U.S. FFPs left that have any appearance of sanity. I can count on one hand those that are actually still "livable".

This total lack of control is sadly a eerie reminder to the credit crisis we are living right now. Whereas the credit market crush came from an over-exuberance of credit granting in the past decade - this implosion of U.S. FFP market also stems from a decade of uncontrolled, unsustainable, explosive growth in non-flying related mileage earning. That's why when choosing a FFP, one must also look at the long-term sustainability of the FFP and airline itself. Does your airline have a tendency to "enhance" their FFP year after year? When you add that in as a criteria, you'll notice that some FFPs that seem so rosy before suddenly look quite worrisome. The fact is, mileage earning / redemption has always been a long-term process that usually takes years. It used to take years of flying to save enough miles for a trip. That's why mileage expiration rules matter a great deal. While we seemed to be able to time warp it somewhat with the growth of non-flying mileage - this growth came at a tremendous cost that many people are unaware of. As a result, it used to be that if I fly and save miles for 5 years, I can reasonably expect that 5 years from now, the mileage I need for a trip would be the same as when I started to save and that the seat will most likely be available provided I am reasonably flexible with dates - not anymore.

Looking at the major programs out there, some have begun to realize the seriousness of this sustainability issue and started to address them, perhaps too late - we'll see (e.g. AF) but others, have always planned for it and look at where we are today. Japan Airlines, the mileage redemption chart you see today is still the same old one back way before when I was just a teenager over 10 years ago. I can still claim a USA-Japan First class award for only 110K miles. This has always been the case for as far as I can remember. Its chief rival, ANA, is also having extended period of mileage seat sales that actually represent true improvements over past programs. What gives here? Those FFPs, for one thing, are not flooded with non-flying related mileage and their miles used to expire in 2 years, now it's 3 years but an exception is made for top tier member where miles don't expire - thus thanking their most frequent flyers for their business = excellent, the way a FFP should be, value frequent flyers, not frequent shoppers.

So the point is, when your FFP of choice has obvious long-term sustainability issue, this should give you pause. Because when it comes to the time for you to redeem your award ticket, will the FFP you knew still be there? That's the question. Given how fast some these FFPs have been devaluing in the past few years, any choice of FFP should accompany a self-assessment of long-term sustainability. When that's considered, LH M&M is dangerously on the list of being the next big implosion. It has all the characteristics of being the next perfect storm: Too big, too fast and too young. Given that BD DC will likely merge or tie to LH M&M one way or the other, that's why this should be worrisome to BD DC members.

A_Lee

Exactly what I was thinking. Flying Lawyer is enjoying lots of free or low-cost miles but someone must be paying for them. As a non-German, I don't want to be the one paying for all the benefits the Germans are enjoying.

I've only been on 4 LH flights in my entire life and 3 M&M airline flights and don't see the situation changing much in the future. DC is a great program, even for people who don't live in the UK and who don't fly on BMI. LH offers me nothing special being I don't live in Germany and don't fly LH or M&M airlines.

A_Lee

Guava, another excellent post! I know I've learned a lot and matured a lot in my flying choices over the years. A lot of it thanks to all the great posters here on FT. When I first started collecting miles I had really no clue about how they worked or how to get the most out of a FFP based on my flying. I was merely looking at getting miles and getting a free trip out of it. I then progressed to adding status as an important part of the equation once I was flying enough to start getting lounge access and other perks. I then progressed to looking at top-tier benefits. But I've also become a real mileage hoarder, which may or may not be a good thing, but for some reason I get a kick out of seeing a multiple million mile balance in my account. That's the thing that drew me into DC, though with the sale to LH it may not have been the wisest decision as I don't think I have any hope of burning even a quarter of my miles in the next year or two.

Anyways, I'm now at the point in my learning curve where I can really see that what you've just said is really of such importance. I might not be able to burn my miles until I retire and the sustainability of a FFP without having to devalue their miles should be one of the key factors for me in choosing a program. I don't have a wife or kids and my family members either don't fly or have enough of their own FF miles to use for their own trips. I'm a total workaholic and don't have many friends. I've burned a few miles for a couple of friends, and maybe one trip at most per year for myself. I've never spent miles for purchasing upgrades and probably won't. So I continue to accumulate miles much faster than I can burn them.

What I really want in a FFP is to enjoy the various status benefits now and as far into the future as possible and build up a nice cache of miles to use down the road when I don't fly so much for my work and maybe find a lifetime partner to join me in flying. I've always loved flying and seeing all parts of the world and can never seem to get enough of it.

One thing I think that I would add to your great advice is that it might be wise not to put all your eggs in one basket. Especially if you fly a lot, you should consider looking at two or more FFPs to bank your miles with so that if one airline should go belly up or something happen to it you have a backup. I'm already investing a lot of miles in OZ and will probably add ANA and/or JAL to the list either now or perhaps wait until DC is decimated.

Thanks so much for all your great posts. You really seem to have an excellent grasp of the FFP world and use a lot of detailed logical thinking in analyzing them.

A_Lee

I certainly agree with what you've said and think most people should be patient and stick with DC until if and when the time comes that the features of the program they use are taken away or downgraded. But one important thing also to consider is that this is now the start of a new year and quite a number of programs are based on the yearly calendar. So for some people they might possibly want to take a gamble and bail out now on DC in favor of another calendar-based program. If the difference between the two programs wasn't so great that possibly could be a wise decision. For most though, as you and others say, nothing concrete has been announced yet about the future of DC, and no need to get too excited yet about what may or may not change. It never hurts though to discuss the possibilities and to be prepared for what might be coming.

Flying Lawyer

Do not worry. Somebody is paying for them, but certainly not Miles & More.

Lufthansa values the outstanding 202.900.000 thousand miles with 910.000.000 Euro. (Do a search on "Miles" in http://www.lufthansa-financials.de/s...H_E_GB2007.pdf) This is about 4,50 Euro per 1000 miles.

They sell the miles to third parties for promotions somewhere in an estimated range of 12 to 16 Euro per 1000 (see this offer: 90 Euro cashback or 6000 miles http://www.burdadirect-abo-service.d...0/?bonusID=527). This results in a book gain of something close to 10 Euro per 1000 miles. I would love to have this business. And it gets even better if the average customers uses his miles for cheap 10.000 miles promotional offers on LH metall - they are selling an otherwise empty airline seat to the customer, have got 150 Euro and the customer pays fuel surcharge (which is part of the airlines profit) in cash. Wonderful This is a business, not a charity.

The dealers are paying for these miles as part of their marketing cost. Lufthansa makes a huge profit out of this. However, as always, one needs to use this for ones benefit....

Frayed_Yak

Slightly different question...

When the other airlines FFPs merged into M&M, who was SEN status given to?
Is it even reasonable to hope that all DC Gold members will be comped SEN status?

What are some alternative (perhaps more realistic) scenarios you think makes more sense?

Raffles

LH has very little choice but to give all DC Gold members SEN status. Star Alliance Silver status is pretty useless compared to, say BA - you can only access lounges when flying with the airline that issued your Silver card, for example - and there would be serious trouble.

In 2006 LH offered to comp SEN status to everyone in the UK who had a BA Gold card (or who said they did ...) so they are not averse to mass comps.

In any event, why SHOULDN'T LH give BD Golds SEN status?

oliver2002

The most recent one is the Swiss Travel Club (before that OS & LO migrated to M&M after the demise of Qualiflyer). All Gold were given SEN for 200x+two years, all Silver FTL for the same period. SN/BD programme should be the same if LH decides to abandon running DC as a stand alone programme.

Flying Lawyer

I would expect that DC cards remain valid until the end of their validity; it is a Star Gold Card. Given that this takeover is certainly different from the situation when an airline joins Star Alliance in the moment of a take-over (as it was with SWISS on April 1st, 2006).

At some point in time they might/will decide to abandon running DC as a stand alone programme. I would expect that the DC requalification rules remain valid in the moment of the (still absolutely fictious) takeover of DC by M&M will remain intact. (such takover can, however certainly does not need to and most likely will not happen together with the takeover of bmi by LH).

However, at some point in time they might/will decide to apply the M&M rules (which are easier for some and more difficult for more people). Easier (or not more difficult) for those with heavy C-Class travel within Europe and travel on certain other airlines, easier for those with heavy travel in one an no travel in a second year, certainly more difficult for most others).