Finnair Plus will get ”fantastic new improvements”
Jan 12, 2018, 12:00 pm
#31
Join Date: May 2014
Location: HEL
Programs: AY+Plat, ALL Plat, Scandic L2
Posts: 3,620
I'm with intuition on this. Finnair is not a hotel chain, it is not a franchising business. A revenue-based system is not the graal. The goal of the loyalty program is to bring more money. It works by distorting the competition through incentivizing loyalty: customers are willing to pay some more for AY (or OW) to earn points and/or for the tier benefits.
On the one hand, it makes perfect sense to give "only" 3,000 points for an expensive KUO<->HEL Pro ticket, because there are no alternatives, so no needs to reward loyalty there. On the other hand, it also makes sense to give more points on cheap Europe-Asia tickets where there is a lot of competition.
I spent hundreds of € in Value upfaring in the past few years. And thousands of € on AY airfares, where I could have bought cheaper tickets from other carriers. (I have only done positioning once, and never done MR. So I consider myself less abnormal a customer than many here
) If Finnair reverted to the old system, I would aim for Silver on segments like back then: buying the dirt cheapest tickets. If Finnair went pure revenue-based, I would ditch loyalty altogether. I don't think that makes them more money.
But they might just do it anyway because others are doing it. That's why I already wrote it "sounds scary".
On the one hand, it makes perfect sense to give "only" 3,000 points for an expensive KUO<->HEL Pro ticket, because there are no alternatives, so no needs to reward loyalty there. On the other hand, it also makes sense to give more points on cheap Europe-Asia tickets where there is a lot of competition.
I spent hundreds of € in Value upfaring in the past few years. And thousands of € on AY airfares, where I could have bought cheaper tickets from other carriers. (I have only done positioning once, and never done MR. So I consider myself less abnormal a customer than many here
) If Finnair reverted to the old system, I would aim for Silver on segments like back then: buying the dirt cheapest tickets. If Finnair went pure revenue-based, I would ditch loyalty altogether. I don't think that makes them more money.But they might just do it anyway because others are doing it. That's why I already wrote it "sounds scary".
Jan 12, 2018, 12:00 pm
#32
Join Date: Sep 2005
Location: HEL
Programs: AY Platinum, TK Elite, BT VIP, AA, BA, SK, DL, NT, WB + hotels
Posts: 8,749
I don’t like what OH-LGG saying, but I don’t disagree with him, either. However, I'm not sure a €-based system would be beneficial for AY and their Asian strategy.
So what are the status members of AY+ like? I think most will fit into one of the following categories. And I think that the two factors any airline wants to consider when granting status is the loyalty the status will create and the cost that will come with the status.
Group 1: Mauri Maakunta. Mauri flies frequently, but almost exclusively within Finland. He qualifies on segments. Domestic tickets are expensive as there’s often little choice. He will be loyal to AY because he has no options, on the other hand he won’t create unbearable costs because the tickets he buys are expensive and the benefits he gets are valid only on half his flights: there are lounges and priority security lines at HEL, only. AY won’t even lose revenue by letting him prereserve seats for free, because on short domestic hops, no one is paying for those seats anyway. He does like his gold card, however, because he can enjoy the benefits when he takes his wife to RHO every summer and he thinks AY is the world's best airline.
Group 2: Pentti Pisnesmies. Pentti needs to take frequent work-related flights to Europe. If he’s smart, he books light tickets and qualifies by segments. If he is restricted by company policies, which he probably is, he buys changeable and expensive tickes and might qualify with points. He gets more benefits than Mauri because the outstations have priority lines and third party lounges, and he might bring in less revenue than Mauri, too. But he does have options, so it pays off to let him have status because lounge access and priority lines create loyalty and without them, he might choose *A next time and all those European connector flights to Asia would fly empty the other way.
Group 3: Heinrich Hamburg. He lives in Continental Europe, close to a AY-serviced airport that has few intercontinental flights. His work takes him to Asia in J on a regular basis, perhaps not very often but a couple of times a year. For him, AY is the best option time- and convenience-wise, and this also applies to his Asian colleagues who visit him in Europe. After two J trips, he gets Gold. It feels nice and creates a sense of being valued, so it will generate loyalty and Heinrich will take the next two trips with AY, as well. However, it costs AY practically nothing since Heinrich will get all benefits as a part of his J ticket anyway. This is AY’s main target group today, so taking their once-earned status away is not a good idea.
Group 4: Fredrika Fannypack. She is a travel blogger and loves travelling. She might not live in the HEL area, so her travels usually need a connecting flight via HEL, doubling segments. But she doesn’t restrict herself to AY; she gladly buys a TK flight when she finds a good deal. She earns her status more or less by accident, especially if this year’s flying includes a rare paid J ticket for €1200, or even two. For AY, she is not a valuable customer. Taking advantage of the best offers will but her butt in the AY seat quite often but for very little cash. The cost of having her as a Gold will outweigh the revenue, and to have her fall back to Basic would still keep her flying as much as before.
Group 5: OH-LGG and friends. Myself included, and a handful of active FTers. And that’s it – this group is very very small. We fly far too much, we pay far too little and we know how to take advantage of all the benefits and then some. Yes, we don’t bring AY much revenue and the cost of having us as status members will exceed the revenue by far. You could say Group 5 takes advantage of the loopholes in the system. But since there are so few of us, it’s pointless to try to close those loopholes because in doing so, you would jeopardise groups 1–3. So it’s best to let us enjoy ourselves and to concentrate on making money on the rest of the bunch.
So if AY+ went €-based, what would happen with Group 3? I think that's the 10.000 dollar question here. If you want to keep Group 3 Gold, you would need to set your limits so low that Groups 1–2 would increase a lot, even Group 4, which is not what you would want.
So what are the status members of AY+ like? I think most will fit into one of the following categories. And I think that the two factors any airline wants to consider when granting status is the loyalty the status will create and the cost that will come with the status.
Group 1: Mauri Maakunta. Mauri flies frequently, but almost exclusively within Finland. He qualifies on segments. Domestic tickets are expensive as there’s often little choice. He will be loyal to AY because he has no options, on the other hand he won’t create unbearable costs because the tickets he buys are expensive and the benefits he gets are valid only on half his flights: there are lounges and priority security lines at HEL, only. AY won’t even lose revenue by letting him prereserve seats for free, because on short domestic hops, no one is paying for those seats anyway. He does like his gold card, however, because he can enjoy the benefits when he takes his wife to RHO every summer and he thinks AY is the world's best airline.
Group 2: Pentti Pisnesmies. Pentti needs to take frequent work-related flights to Europe. If he’s smart, he books light tickets and qualifies by segments. If he is restricted by company policies, which he probably is, he buys changeable and expensive tickes and might qualify with points. He gets more benefits than Mauri because the outstations have priority lines and third party lounges, and he might bring in less revenue than Mauri, too. But he does have options, so it pays off to let him have status because lounge access and priority lines create loyalty and without them, he might choose *A next time and all those European connector flights to Asia would fly empty the other way.
Group 3: Heinrich Hamburg. He lives in Continental Europe, close to a AY-serviced airport that has few intercontinental flights. His work takes him to Asia in J on a regular basis, perhaps not very often but a couple of times a year. For him, AY is the best option time- and convenience-wise, and this also applies to his Asian colleagues who visit him in Europe. After two J trips, he gets Gold. It feels nice and creates a sense of being valued, so it will generate loyalty and Heinrich will take the next two trips with AY, as well. However, it costs AY practically nothing since Heinrich will get all benefits as a part of his J ticket anyway. This is AY’s main target group today, so taking their once-earned status away is not a good idea.
Group 4: Fredrika Fannypack. She is a travel blogger and loves travelling. She might not live in the HEL area, so her travels usually need a connecting flight via HEL, doubling segments. But she doesn’t restrict herself to AY; she gladly buys a TK flight when she finds a good deal. She earns her status more or less by accident, especially if this year’s flying includes a rare paid J ticket for €1200, or even two. For AY, she is not a valuable customer. Taking advantage of the best offers will but her butt in the AY seat quite often but for very little cash. The cost of having her as a Gold will outweigh the revenue, and to have her fall back to Basic would still keep her flying as much as before.
Group 5: OH-LGG and friends. Myself included, and a handful of active FTers. And that’s it – this group is very very small. We fly far too much, we pay far too little and we know how to take advantage of all the benefits and then some. Yes, we don’t bring AY much revenue and the cost of having us as status members will exceed the revenue by far. You could say Group 5 takes advantage of the loopholes in the system. But since there are so few of us, it’s pointless to try to close those loopholes because in doing so, you would jeopardise groups 1–3. So it’s best to let us enjoy ourselves and to concentrate on making money on the rest of the bunch.
So if AY+ went €-based, what would happen with Group 3? I think that's the 10.000 dollar question here. If you want to keep Group 3 Gold, you would need to set your limits so low that Groups 1–2 would increase a lot, even Group 4, which is not what you would want.
Jan 12, 2018, 3:55 pm
#34
Moderator, Finnair
Join Date: May 2011
Location: MMX (CPH)
Programs: Eurobonus Diamond, QR Gold, AY+ Platinum, A3*G, Nordic Choice Lifetime Platinum, SJ Prio Black
Posts: 14,174
Could it be time for Lifetime Silver ?
Lifetime site:
https://www.finnair.com/fi/fi/finnai...tiers/lifetime
for some reason AY Silver Card imagine added there recently.
Lifetime site:
https://www.finnair.com/fi/fi/finnai...tiers/lifetime
for some reason AY Silver Card imagine added there recently.
...
So what are the status members of AY+ like? I think most will fit into one of the following categories. And I think that the two factors any airline wants to consider when granting status is the loyalty the status will create and the cost that will come with the status....
So what are the status members of AY+ like? I think most will fit into one of the following categories. And I think that the two factors any airline wants to consider when granting status is the loyalty the status will create and the cost that will come with the status....
Also, group 5 is very very very small. Even a lot of FT'ers are not in this group.
I am at least not, and I even consider myself as a pretty good (valuable) customer. Not only do I buy mostly J tickets, I also bring in at least 3 other flyers on a regular basis only because of my status.
Jan 12, 2018, 6:55 pm
#35
FlyerTalk Evangelist
Join Date: Jan 2008
Location: HEL
Programs: lots of shiny metal cards
Posts: 14,105
I'm in a way in 3 ∩ 5 (intersection of 3 and 5) Flying to Asia on business and flying too much while taking advantage of the system. 
while bringing (low) five-figure revenue to AY
The current AY+ fits me, the changes 2-3 years ago brought me back into the fold. Before that I was BA Gold and crazily enough flew often via LHR to Asia in C. I like AY's direct flights and the AY+ programme, but I also play the system and fly mostly ex-EU, no way I'd pay their ex-HEL C prices.
BUT if they make changes that I'd feel negative, I would switch FFP very quickly and probably carrier as well, becoming ex-EU flyer for TK or LH. Even now I'm TK*G by actually earning it
while bringing (low) five-figure revenue to AYThe current AY+ fits me, the changes 2-3 years ago brought me back into the fold. Before that I was BA Gold and crazily enough flew often via LHR to Asia in C. I like AY's direct flights and the AY+ programme, but I also play the system and fly mostly ex-EU, no way I'd pay their ex-HEL C prices.
BUT if they make changes that I'd feel negative, I would switch FFP very quickly and probably carrier as well, becoming ex-EU flyer for TK or LH. Even now I'm TK*G by actually earning it
Jan 12, 2018, 10:37 pm
#36
Join Date: May 2014
Location: HEL
Programs: AY+Plat, ALL Plat, Scandic L2
Posts: 3,620
I would be in group 2 (including a fair amount of not-that-cheap long-haul too).
Obviously group 3 is the most valuable, but it's also not really concerned by the loyalty program IMO. First, group 3 enjoys most of the benefits from the J booking class anyway, regardless of loyalty. Furthermore, group 3 profiles are mostly company-paid and company-policed. Group 3 can use ME carriers and possibly local European carrier. So group 3 profiles are possibly not permitted to or not interested in sticking to only Finnair - just buying it occasionally. Probably AY+ Group 3 is actually sizable only in the Nordics - and likewise AY+ Groups 1 & 2 in Finland.
But I don't think that's how the airline businesses are approaching the loyalty matters at the moment. Both LH and AFKL are switching to revenue based systems, copying the big US carriers, presumably for similar reasons than the US carriers. I think the key point for them is pressure from LCCs.
With that said, it is questionable if LCCs affect Finnair as much as they affect AFKL, LH, IAG and the three big US carriers. In HEL, LCCs are still mostly D8 holiday flights, that compete maybe with AurinkoM but not AY regular. FR (TMP-BUD, TMP-BRE), EZ (HEL-TXL), EW (HEL-TXL too), VY (HEL-BCN), W6 (TKU-GDN) are most exactly strong in Finland-Europe, and they cannot compete on the Asia strategy (for political and cost reasons).
Obviously group 3 is the most valuable, but it's also not really concerned by the loyalty program IMO. First, group 3 enjoys most of the benefits from the J booking class anyway, regardless of loyalty. Furthermore, group 3 profiles are mostly company-paid and company-policed. Group 3 can use ME carriers and possibly local European carrier. So group 3 profiles are possibly not permitted to or not interested in sticking to only Finnair - just buying it occasionally. Probably AY+ Group 3 is actually sizable only in the Nordics - and likewise AY+ Groups 1 & 2 in Finland.
But I don't think that's how the airline businesses are approaching the loyalty matters at the moment. Both LH and AFKL are switching to revenue based systems, copying the big US carriers, presumably for similar reasons than the US carriers. I think the key point for them is pressure from LCCs.
With that said, it is questionable if LCCs affect Finnair as much as they affect AFKL, LH, IAG and the three big US carriers. In HEL, LCCs are still mostly D8 holiday flights, that compete maybe with AurinkoM but not AY regular. FR (TMP-BUD, TMP-BRE), EZ (HEL-TXL), EW (HEL-TXL too), VY (HEL-BCN), W6 (TKU-GDN) are most exactly strong in Finland-Europe, and they cannot compete on the Asia strategy (for political and cost reasons).
Jan 13, 2018, 1:32 am
#37
Join Date: Feb 2001
Location: HEL
Programs: AY Plat Lumo, SK Gold
Posts: 954
Group 4: Fredrika Fannypack. She is a travel blogger and loves travelling. She might not live in the HEL area, so her travels usually need a connecting flight via HEL, doubling segments. But she doesn’t restrict herself to AY; she gladly buys a TK flight when she finds a good deal. She earns her status more or less by accident, especially if this year’s flying includes a rare paid J ticket for €1200, or even two. For AY, she is not a valuable customer. Taking advantage of the best offers will but her butt in the AY seat quite often but for very little cash. The cost of having her as a Gold will outweigh the revenue, and to have her fall back to Basic would still keep her flying as much as before.
I'm in this group 4 myself. I have to say you might get Silver by accident, but getting Gold would require careful planning (including loyalty, also meaning you have to pick destinations where you can fly OW). A friend of mine (also in group 4) maintains Gold by flying a few longhaul returns with Value tickets and then changing the remaining points.
In the end, AY's network is quite limited and as Fredrika Fannypack's want to see new destinations, you will have to quickly move outside the AY network (especially as the secondary Chinese cities are not really touristic). QR coming to HEL helped getting AY status as they do offer so many destinations where OW wouldn't be competitive otherwise.
Although we sometimes snatch campaign fares, we do also buy more expensive tickets. Our travels require often open-jaw tickets, as we will try to use our vacations efficiently and visit multiple destinations on the same trip. We also tend to travel over the Christmas holidays, when there is no hope of getting a campaign fare.
Jan 13, 2018, 1:32 am
#38
Join Date: May 2015
Location: ATL/MCO
Programs: Costco Executive, RaceTrac Sultan of Soda, Chick-fil-A Red
Posts: 5,662
Interesting and very obeservant find! I'd say you are pretty spot on. The cards in the old pic had the word "LIFETIME" in upper right corner, and in the new image there is no LT marker at all, But that space is taken by the tier moniker nowadays. The new image is named "lifetime2" so it is clearly not just a random image chosen.
Jan 13, 2018, 1:37 am
#39
Join Date: Feb 2001
Location: HEL
Programs: AY Plat Lumo, SK Gold
Posts: 954
If you look on one of the descriptions of the AY Plus tiers, like Platsku for example you will see that the card has been redesigned with "Platinum" moved to the top right and "Plus" written under Finnair.
Jan 13, 2018, 2:39 am
#40
Moderator, Finnair
Join Date: May 2011
Location: MMX (CPH)
Programs: Eurobonus Diamond, QR Gold, AY+ Platinum, A3*G, Nordic Choice Lifetime Platinum, SJ Prio Black
Posts: 14,174
If you look on one of the descriptions of the AY Plus tiers, like Platsku for example you will see that the card has been redesigned with "Platinum" moved to the top right and "Plus" written under Finnair.
The appearance of the silver card in that image could be just because someone wanted to refresh the page with the new card design and mistakenly used stockpile photo with all three cards without thinking about it. But naming the image "lifetime2" kind of indicates the image being a successor. Let's see if they clean it up or leave it there!
*) Finacial sense yes, but not getting anywhere near the full marketing potential of the lifetime status. Having LIfetime cards made of precious metals and delivered to your doorstep by Herr Vauramo accompanied by a marching band and elephants and dancers in sequins would be closer full potential
Jan 13, 2018, 2:53 am
#41
Join Date: May 2014
Location: HEL
Programs: AY+Plat, ALL Plat, Scandic L2
Posts: 3,620
Regardless of what the "enhancements" are, it's indeed very likely that the ticket types, the fare structure will change - because there was a questionnaire about that last year. And with that, I wouldn't be surprised if the first checked-in bag got unbundled on long-haul - at first, perhaps only outside the JVs. Not only does that seem to be the way the industry is going. But that would enable "simplifying" the (visible) ticket types by getting rid of Basic.
With that in mind, I just hope they don't over-simplify back down to only two tickets types by removing Value/semi-flexible. IMO, Value was a win-win ticket type:
Ideally, they'd rework the system a bit so that Value can return to the JV flights too, but not holding my breath for that.
With that in mind, I just hope they don't over-simplify back down to only two tickets types by removing Value/semi-flexible. IMO, Value was a win-win ticket type:
- It was almost free money for the airline.
- It was attractive for frequent fliers.
- Probably a lot of infrequent fliers bought it for the bags, not realizing that they can get away with Light+bag.
Ideally, they'd rework the system a bit so that Value can return to the JV flights too, but not holding my breath for that.
Jan 13, 2018, 3:12 am
#42
Moderator, Finnair
Join Date: May 2011
Location: MMX (CPH)
Programs: Eurobonus Diamond, QR Gold, AY+ Platinum, A3*G, Nordic Choice Lifetime Platinum, SJ Prio Black
Posts: 14,174
Here is the article. I don't think it is a major revamp. I think it is the silver LT tier and some new or reshuffled perks. Maybe some minor adjustments of the tier thresholds too.
Jan 13, 2018, 7:11 am
#44
Join Date: Jul 2012
Location: Helsinki
Programs: A3 Gold, BA Silver
Posts: 1,014
Regardless of what the "enhancements" are, it's indeed very likely that the ticket types, the fare structure will change - because there was a questionnaire about that last year. And with that, I wouldn't be surprised if the first checked-in bag got <em>unbundled</em> on long-haul - at first, perhaps only outside the JVs. Not only does that seem to be the way the industry is going. But that would enable "simplifying" the (visible) ticket types by getting rid of <em>Basic</em>.<br />.
Jan 13, 2018, 7:37 am
#45
Moderator, Finnair
Join Date: May 2011
Location: MMX (CPH)
Programs: Eurobonus Diamond, QR Gold, AY+ Platinum, A3*G, Nordic Choice Lifetime Platinum, SJ Prio Black
Posts: 14,174
I think the joint ventures are a bit like a big "wet felt" for Finnair. My guess is that the multilateral agreements are hampering many internal discussions/development initiatives, ie stopping any revamp or a re-launch of the ticket types. Finnair adopted BA ticket types upon joining the JJV and I don't see any changes on that side until JJV breaks up or is renegotiated.
(BTW, wonder what will happen march 2019 when BA becomes a third country airline?)
On the AJV side maybe things are easier - I imagine AA is calling the shots there.
(BTW, wonder what will happen march 2019 when BA becomes a third country airline?)
On the AJV side maybe things are easier - I imagine AA is calling the shots there.
Last edited by intuition; Jan 13, 2018 at 8:07 am