Zero reward flights available
Jan 24, 2023, 1:55 am
#16
Join Date: Aug 2009
Location: SYD
Programs: QF WP (OWE), VA PLAT, EY GLD, SPG PLAT, Hyatt DIA, Hilton DIA, Hertz PC
Posts: 8,527
Interesting. As I mentioned earlier, loyalty programs are an investment. Extra capacity, lounge space, overheads, etc. I think few countries embrace the whole coupons on everything approach that the US does, so that might be why the points cards didn't work as well. But given we have flybuys and all, that might not be entirely the reason. Australia will also often prefer the local version of things. So while racking up Qantas points seems reasonable, doing so with Emirates might seem less so. But I can't help but feel that somehow the rewards availability also contributes. Perhaps the status aspects of the program appeal, but miles don't for that reason. But yeah, I noticed the Emirates Citi card had gone. I used to use that to book my Emirates flights. Having the card was a good reason to use Emirates and vice versa. Given that I now cannot actually use any miles I earned that would indeed seem like a poor value proposition.
Qantas Loyalty is incredibly successful. There are 13.6 million Qantas Frequent Flyers in a population of 25 million. QFF generates vast sums of income from selling consumer data.
The Emirates Citi card was cancelled because Citi effectively starting pulling out of the Australian market starting in 2021.
There is award availability with EK, but it is hard to find. No more so than QF, BA, EY or QR in or out of Australia.
Jan 24, 2023, 3:06 am
#18
Join Date: Aug 2009
Location: SYD
Programs: QF WP (OWE), VA PLAT, EY GLD, SPG PLAT, Hyatt DIA, Hilton DIA, Hertz PC
Posts: 8,527
QR only release 1 seat, if any, to QFF on purpose. That was my point. QR offer more seats to VA than they do to their own or other OW partners.
Last edited by m0hamed; Jan 24, 2023 at 3:42 am
Jan 24, 2023, 3:29 am
#19
Original Poster
Join Date: Apr 2008
Posts: 497
I wish I could believe that about EK, but the fact is their volumes, markets and sheer scale of the organisation means that the most valuable customer base is likely to be SLF and aspirational J/F travellers who watch YouTube videos. The trend has not been to invest in loyal customers but to onboard as many infrequent flyers on to skywards. I wonder how many Skywards accounts of the recently announced 30 million have balances below 10k (i.e good for a cuddly toy in the EK shop in T3).
Jan 24, 2023, 5:47 am
#20
Join Date: Nov 2013
Posts: 5,454
I don't think it's much of a gamble if you look at the history of EK and where it historically and now does operate. If you analyse EK's business from the perspective of a different aviation market you will probably come unstuck.
EK was founded to bring tourists and visitors to DXB, mostly from the UK - its most profitable markets are now pax in the UAE, partly the GCC, and the UK as they are the ones who significantly purchase O&D fares. Those posters who live in the UAE will tell just how significantly more expensive it is to fly on EK (but you all still do it because well, it's probably better than the alternatives to where you want to go). The fare differentials are a bit less now due to obvious uplift in fares but it's still there.
If you want some anecdotal evidence of those transit loads, go through transit security at DXB then look back on the screens as it will tell you transit pax expected per flight. Consistently ex-AU flights A380 flights are about 380/390/400 on 427 capacity planes (so say 90%+). Contrast say an ex-UK flight or ex-GCC flight and that drops to 60-70% or even less than 50% on GCC ones.
But these passengers have fairly transient lives or are locked in - they will go to DXB every year or two, for a while for vacation, then life takes over; or they are resident and are locked into one or two EK round trips a year. They are the family silver, as it were - the customers they don't want to lose, given their margin. But Skywards redemption isn't the thing that keeps them - it's product compared to others and in the case of UAE pax, Skywards partnerships (cards).
The entire business model for the non-captive market then, is based on visitors and there is a high turnover of them. The whole machine is geared to extracting 2,3,4 flights over a lifetime with them (and to keep good memories) and then moving on to a new (developing!) pax. That's more for EK's marketing and DXB's marketing.
That brings us to the next major model that EK targets, and that's the transit hub model that Sir Tim really pushed. Those pax are price-sensistive and low margin (even historically lower in J/F).
EK is an airline that does not need large margins - it has always operated on a "pay your own way and enough to invest, but the owner doesn't need you to squeeze as much margin as you can out of pax": again, part of EK's purpose is to promote DXB. Some of these transit passengers might stop in DXB one day. Or when they are wealthier they will come back. They are not completely strapped for cash - otherwise they would be on even lower cost carriers. But certainly loyalty programmes do not decide where to spend.
Once EK then had network, it just flooded capacity to get the best timings - making it the default choice.
Now that DXB's visitor strategy is to target rich/rich-adjacent (e.g. influencers/aspirational travellers) - that is not really orthogonal to "loyal flyers" - because EK's own experience is that there is no such thing as loyal flyers. Their pax fly for network and price - or something external to EK (such as DXB marketing) brings them on board. As long as the product is adequate compared to what else is on the route, then they fill the planes (EK being able to fill their substandard J products is testament to the viability of that strategy).
Skywards is not like say QFF and a major profit center. It is a fairly small part of marketing - EK decided to put its marketing money in sponsorships (which I think have worked out quite well) and its soft product (and promoting that). As well as its IFE which is extremely good. Feed and water them and keep them distracted (hey look we have a bar on board) and they'll probably be back. That seems to have worked. It wasn't until a few years ago that Skywards even had Platinum tier - and as no alliances, it didn't really regard facilities as revenue generating (that is a fairly new thing). The lounge expansion was mainly due to passenger numbers.
In terms of accounting, Skywards accounts for around 2bn AED in deferred revenue - contrast 54bn in transport revenue. It forms a small part of the accounts - it certainly isn't trumpted as a major component of Emirates group profit.
I wouldn't bet against EK revenue managers, who really know what they are doing even if I vehemently disagree with the value proposition - somehow they've managed to keep this airline afloat without a bailout apart from the covid bailout of 2 billion USD (which has been adequately covered by historical profit and I expect will be available to be repaid through profits from this and next year).
So the crux of it is, whether you think hollowing out Skywards would drop passenger numbers. I think that's extremely unlikey - especially as this is FT, where you can see on a daily or weekly basis going back over a decade about how if x airline does y, then it will go out of business. For every passenger who leaves swearing never to fly them again, well, most well run airlines (and EK is a well run airline) just replace them with more - and the pax numbers on EK prove it.
EK was founded to bring tourists and visitors to DXB, mostly from the UK - its most profitable markets are now pax in the UAE, partly the GCC, and the UK as they are the ones who significantly purchase O&D fares. Those posters who live in the UAE will tell just how significantly more expensive it is to fly on EK (but you all still do it because well, it's probably better than the alternatives to where you want to go). The fare differentials are a bit less now due to obvious uplift in fares but it's still there.
If you want some anecdotal evidence of those transit loads, go through transit security at DXB then look back on the screens as it will tell you transit pax expected per flight. Consistently ex-AU flights A380 flights are about 380/390/400 on 427 capacity planes (so say 90%+). Contrast say an ex-UK flight or ex-GCC flight and that drops to 60-70% or even less than 50% on GCC ones.
But these passengers have fairly transient lives or are locked in - they will go to DXB every year or two, for a while for vacation, then life takes over; or they are resident and are locked into one or two EK round trips a year. They are the family silver, as it were - the customers they don't want to lose, given their margin. But Skywards redemption isn't the thing that keeps them - it's product compared to others and in the case of UAE pax, Skywards partnerships (cards).
The entire business model for the non-captive market then, is based on visitors and there is a high turnover of them. The whole machine is geared to extracting 2,3,4 flights over a lifetime with them (and to keep good memories) and then moving on to a new (developing!) pax. That's more for EK's marketing and DXB's marketing.
That brings us to the next major model that EK targets, and that's the transit hub model that Sir Tim really pushed. Those pax are price-sensistive and low margin (even historically lower in J/F).
EK is an airline that does not need large margins - it has always operated on a "pay your own way and enough to invest, but the owner doesn't need you to squeeze as much margin as you can out of pax": again, part of EK's purpose is to promote DXB. Some of these transit passengers might stop in DXB one day. Or when they are wealthier they will come back. They are not completely strapped for cash - otherwise they would be on even lower cost carriers. But certainly loyalty programmes do not decide where to spend.
Once EK then had network, it just flooded capacity to get the best timings - making it the default choice.
Now that DXB's visitor strategy is to target rich/rich-adjacent (e.g. influencers/aspirational travellers) - that is not really orthogonal to "loyal flyers" - because EK's own experience is that there is no such thing as loyal flyers. Their pax fly for network and price - or something external to EK (such as DXB marketing) brings them on board. As long as the product is adequate compared to what else is on the route, then they fill the planes (EK being able to fill their substandard J products is testament to the viability of that strategy).
Skywards is not like say QFF and a major profit center. It is a fairly small part of marketing - EK decided to put its marketing money in sponsorships (which I think have worked out quite well) and its soft product (and promoting that). As well as its IFE which is extremely good. Feed and water them and keep them distracted (hey look we have a bar on board) and they'll probably be back. That seems to have worked. It wasn't until a few years ago that Skywards even had Platinum tier - and as no alliances, it didn't really regard facilities as revenue generating (that is a fairly new thing). The lounge expansion was mainly due to passenger numbers.
In terms of accounting, Skywards accounts for around 2bn AED in deferred revenue - contrast 54bn in transport revenue. It forms a small part of the accounts - it certainly isn't trumpted as a major component of Emirates group profit.
I wouldn't bet against EK revenue managers, who really know what they are doing even if I vehemently disagree with the value proposition - somehow they've managed to keep this airline afloat without a bailout apart from the covid bailout of 2 billion USD (which has been adequately covered by historical profit and I expect will be available to be repaid through profits from this and next year).
So the crux of it is, whether you think hollowing out Skywards would drop passenger numbers. I think that's extremely unlikey - especially as this is FT, where you can see on a daily or weekly basis going back over a decade about how if x airline does y, then it will go out of business. For every passenger who leaves swearing never to fly them again, well, most well run airlines (and EK is a well run airline) just replace them with more - and the pax numbers on EK prove it.
Jan 24, 2023, 9:03 am
#21
Join Date: Mar 2011
Location: New York, NY
Programs: AA ExPl, DL PM, UA Silver, Hyatt Globalist, Marriott Titanium, probably some others
Posts: 4,097
I hoped for, but really shouldn't have expected, better. Please point out the point where I'm getting "mad". I made a very straightforward request. I also pointed out my feeling that at some point we must surely have some protection. Not mad at any point. Developing a belief that I had a valid point - yes; letting that become emotional - no. Disagreement isn't always emotional, you need to work on that.
I'm always amazed at how quickly people will come in to bat for big business with "you're not entitled to jack buddy" as though they're the security. It was a simple question and observation. No one getting mad, or being unreasonable, or having a tantrum. I was clear on my reasoning on why it might feel or perhaps even be recognised as deceptive; I also made fair points on why it might actually disadvantage Emirates and NOT earn them money in the long run (short-termism). I also got some great responses (including the interesting point on Emirates cards, which I'm about to respond to). I'm unsure why you needed to do the "if you don't like it, there's the door" approach. Is that how you deal with disagreements generally? Whatever, I'm sure Emirates are grateful for your service informing people that they can like it or lump it. So, for the avoidance of doubt, I'm fully aware that they can do what they want, and that I can take it or leave it. That was not the request or the point of my observation.
Happy for you to post a reply, but I won't be answering it.
I'm always amazed at how quickly people will come in to bat for big business with "you're not entitled to jack buddy" as though they're the security. It was a simple question and observation. No one getting mad, or being unreasonable, or having a tantrum. I was clear on my reasoning on why it might feel or perhaps even be recognised as deceptive; I also made fair points on why it might actually disadvantage Emirates and NOT earn them money in the long run (short-termism). I also got some great responses (including the interesting point on Emirates cards, which I'm about to respond to). I'm unsure why you needed to do the "if you don't like it, there's the door" approach. Is that how you deal with disagreements generally? Whatever, I'm sure Emirates are grateful for your service informing people that they can like it or lump it. So, for the avoidance of doubt, I'm fully aware that they can do what they want, and that I can take it or leave it. That was not the request or the point of my observation.
Happy for you to post a reply, but I won't be answering it.
Jan 24, 2023, 10:31 am
#22
Join Date: Apr 2022
Posts: 11
This is the main issue with the skywards programme compared to BA, EY and QR. They do not release reward seats for every route or make them available at a certain time say 330/355 days in advance when the cash tickets go on sale. If EK did this it would greatly increase the value of the scheme and reward customer loyalty but as others have said they obviously don’t feel the need to do so.
Jan 24, 2023, 2:56 pm
#23
Join Date: Jan 2010
Location: N/A
Programs: N/A
Posts: 823
Just because I find this conversation to be completely absurd I thought I would waste 60 seconds to do a search. While SYD might be a very tough redemption and that has been discussed here many times I put in a random date for a one one biz award from BNE and on my VERY FIRST search I found 2 seats on March 8 from BNE-DXB in business.
I have zero loyalty to EK and in no way am I trying stick up for Emirates here but this discussion is so obnoxious, anyone who uses miles and hangs around flyertalk knows you need to be flexible, take position flights, ect to get what you want. Stop complaining, be flexible and buy a $100 ticket to BNE to get your Emirates award.
I have zero loyalty to EK and in no way am I trying stick up for Emirates here but this discussion is so obnoxious, anyone who uses miles and hangs around flyertalk knows you need to be flexible, take position flights, ect to get what you want. Stop complaining, be flexible and buy a $100 ticket to BNE to get your Emirates award.
Jan 24, 2023, 9:35 pm
#24
Join Date: Jul 2018
Programs: BA executive club Gold, United milage plus Gold
Posts: 58
Now that DXB's visitor strategy is to target rich/rich-adjacent (e.g. influencers/aspirational travellers) - that is not really orthogonal to "loyal flyers" - because EK's own experience is that there is no such thing as loyal flyers. Their pax fly for network and price - or something external to EK (such as DXB marketing) brings them on board. As long as the product is adequate compared to what else is on the route, then they fill the planes (EK being able to fill their substandard J products is testament to the viability of that strategy).
.
.
Jan 26, 2023, 11:48 am
#25
Join Date: May 2012
Location: San Francisco
Programs: AA
Posts: 163
I wish I could believe that about EK, but the fact is their volumes, markets and sheer scale of the organisation means that the most valuable customer base is likely to be SLF and aspirational J/F travellers who watch YouTube videos. The trend has not been to invest in loyal customers but to onboard as many infrequent flyers on to skywards. I wonder how many Skywards accounts of the recently announced 30 million have balances below 10k (i.e good for a cuddly toy in the EK shop in T3).
I joined Skywards, bought a Business Saver ticket for next month and now wondering if I should invest in a CC to get more miles for upgrades. I transferred AMEX points over to be able to upgrade from DBX-MAA. I am exactly who you described
. I have been sucked in and haven't even flown yet- I blame this forum (in the best way) for wanting me to get to F on a 380!
Oddly, on their site it said 31K miles to upgrade from DBX to MAA and I signed up for the auto upgrade- I called about something today and they said because I bought a saver ticket it was 41K miles to upgrade. I found it odd the site posted something on my itinerary different than the information from the live agent.
Jan 26, 2023, 1:39 pm
#26
Join Date: Jan 2018
Posts: 262
To generate brand loyalty, repeat sales and word of mouth advertising? To give a perception of value for money? To boost income during leaner periods and periods of higher competition through Skywards members' investment in the brand?
More simply, a rewards program is a long term branding exercise and an investment. One that is perceived as unfair still has costs involved (accrual of all miles currently being earned) but with much reduced benefit for the company. They should be giving up seats for free regularly, even if they could sell them, because it increases the value of the program, which increases the perceived value of the product and the standing of the brand. The point I'm at right now is I am looking for flights with other airlines because my perception of Emirates has lowered on the basis of this. The cost of one reward flight has likely lost them 2 or 3 returns this year. Once I have points with another airline I am likely to stick with them as I have an investment there. You don't get much more prized customers than those who stick around and pay a premium because they are invested in a brand.
IMO the mistake airlines make is the "coupons" approach where everything and anything earns you points. That makes the reward flights feel like a liability that has no future value for the airline. Nothing could be further from the truth. There's a big chunk of semi-regular business travelers who will stick to one airline for status and miles who are right now at the point of aligning to a brand for the next half decade. You'd be a fool to reduce the value of the product you offer to them at this point.
More simply, a rewards program is a long term branding exercise and an investment. One that is perceived as unfair still has costs involved (accrual of all miles currently being earned) but with much reduced benefit for the company. They should be giving up seats for free regularly, even if they could sell them, because it increases the value of the program, which increases the perceived value of the product and the standing of the brand. The point I'm at right now is I am looking for flights with other airlines because my perception of Emirates has lowered on the basis of this. The cost of one reward flight has likely lost them 2 or 3 returns this year. Once I have points with another airline I am likely to stick with them as I have an investment there. You don't get much more prized customers than those who stick around and pay a premium because they are invested in a brand.
IMO the mistake airlines make is the "coupons" approach where everything and anything earns you points. That makes the reward flights feel like a liability that has no future value for the airline. Nothing could be further from the truth. There's a big chunk of semi-regular business travelers who will stick to one airline for status and miles who are right now at the point of aligning to a brand for the next half decade. You'd be a fool to reduce the value of the product you offer to them at this point.
Jan 26, 2023, 3:00 pm
#27
FlyerTalk Evangelist
Join Date: Mar 2008
Location: Netherlands
Programs: KL Platinum; A3 Gold
Posts: 28,722
Jan 26, 2023, 3:06 pm
#28
Join Date: Jan 2018
Posts: 262
Those prices looked crazy to me until Google flights showed flights on that date (Feb 8 outbound / Mar 15 return) as USD 6.1k in Y. Actually not a bad redemption at 3.4 USD cents per point, but only because cash fares are so high...
Jan 26, 2023, 3:07 pm
#29
FlyerTalk Evangelist
Join Date: Mar 2008
Location: Netherlands
Programs: KL Platinum; A3 Gold
Posts: 28,722
Jan 26, 2023, 3:29 pm
#30
Join Date: Aug 2009
Location: SYD
Programs: QF WP (OWE), VA PLAT, EY GLD, SPG PLAT, Hyatt DIA, Hilton DIA, Hertz PC
Posts: 8,527
Who's to say that they didn't already make award tickets available and then see them get booked given the high demand into and out of Australia rn? Just because award tickets weren't available when you searched doesn't mean they didn't release any for the flight that you're looking at. Australia is in such high demand that SQ is pulling A380s from other routes and shifting them onto their Australia routes to capitalize on high demand. You're not the only one looking for award tickets...
Even with new routes being announced, there is no standard award availability for EK in premium cabins anymore.