Inside info on new FD program
Sep 12, 2002 | 5:08 am
#16
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Yes, I agree with newbe. 1.8 is not enough unless they introduce very low cost for award tickets. Which I, too, doubt...
Probably 1.8 is the conversion factor for dutch FD'ers and 2.5 the factor for all others... ?
Probably 1.8 is the conversion factor for dutch FD'ers and 2.5 the factor for all others... ?
Sep 12, 2002 | 5:50 am
#17
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To determine equitable conversion rates, one needs to distinguish between Service Points / Level Miles and Award Points / Award Miles. What is fair for the one, is not necessarily reasonable for the other.
Even if redemption rates are juggled in such a way that a conversion rate of say 1.8 will still buy you the same awards, the fact remains that you may well lose out as far as elite qualification is concerned.
Elite qualification is of course the fundamental cornerstone of any FF program. To get the most out a program one must attain top elite status first.
In the current FD program, Service Level points are earned on the assumption that they have a specific value, i.e. 24,000 of them will earn you RW status. Once again assuming the Platinum qualification level will be 75,000, any conversion rate less than 3:1 will mean that your current Service Level points will be devalued. If the rate is 1.8:1, your points will lose no less than 40% of their value overnight. That constitutes robbery, if you ask me.
Awards may be cheaper under the new program; you may earn elite bonuses, etc. but that's all completely irrelevant when it comes to earning or retaining status.
johan
Even if redemption rates are juggled in such a way that a conversion rate of say 1.8 will still buy you the same awards, the fact remains that you may well lose out as far as elite qualification is concerned.
Elite qualification is of course the fundamental cornerstone of any FF program. To get the most out a program one must attain top elite status first.
In the current FD program, Service Level points are earned on the assumption that they have a specific value, i.e. 24,000 of them will earn you RW status. Once again assuming the Platinum qualification level will be 75,000, any conversion rate less than 3:1 will mean that your current Service Level points will be devalued. If the rate is 1.8:1, your points will lose no less than 40% of their value overnight. That constitutes robbery, if you ask me.
Awards may be cheaper under the new program; you may earn elite bonuses, etc. but that's all completely irrelevant when it comes to earning or retaining status.
johan
Sep 12, 2002 | 6:28 am
#19
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by The-Longhauler:
Yes, 1 : 1.8 will be too low if awards will cost more than the double !!</font>
Yes, 1 : 1.8 will be too low if awards will cost more than the double !!</font>
Hey - no one said it needed to be FAIR.
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">
Originally posted by newbe:
The bet is fine with me, btw. Did you get my email, ozstamps?</font>
Originally posted by newbe:
The bet is fine with me, btw. Did you get my email, ozstamps?</font>
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Sep 12, 2002 | 6:29 am
#20
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Newbe and Ozstamps, I think we all made a terrible mistake, when we discussed the conversion rate...
Why should KLM give everybody the same conversion rate ???
Since the introduction of the FD programm they were always discriminating some zones, first of all their own countryman and beside that many other european nationals....
What brought me up to this point is the fact, that I have confirmed information, that 9000 old FD points will become more than 20000 service points in the new system, in addition to that a standard intraeuropean award will be available at 20000 new KLM miles...!!
This would mean at least a conversion rate of 2:22 to 1 for german residents.....
Why should KLM give everybody the same conversion rate ???
Since the introduction of the FD programm they were always discriminating some zones, first of all their own countryman and beside that many other european nationals....
What brought me up to this point is the fact, that I have confirmed information, that 9000 old FD points will become more than 20000 service points in the new system, in addition to that a standard intraeuropean award will be available at 20000 new KLM miles...!!
This would mean at least a conversion rate of 2:22 to 1 for german residents.....
Sep 12, 2002 | 7:03 am
#21
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Threy:
I have confirmed information, that 9000 old FD points will become more than 20000 service points in the new system...
This would mean at least a conversion rate of 2:22 to 1 for german residents.....
</font>
I have confirmed information, that 9000 old FD points will become more than 20000 service points in the new system...
This would mean at least a conversion rate of 2:22 to 1 for german residents.....
</font>
Sep 12, 2002 | 7:14 am
#23
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Tractor Boy:
If they have different conversion rate for different members things will certainly get interesting. I assume that with the new program, the discrimination based on country will finally disappear.. but who knows?</font>
If they have different conversion rate for different members things will certainly get interesting. I assume that with the new program, the discrimination based on country will finally disappear.. but who knows?</font>
As posted before, from a german standpoint, you cannot blame KLM at all, we were given generous special offers all over the last two years....
Sep 12, 2002 | 8:48 am
#24
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Threy:
It was already confirmed, that the awards will be priced differently from country to country, beside that all the discrimination will stop at least from the standpoint of actual flown miles.But it would be possible to give certain countries more of a status bonus or even more offers.
As posted before, from a german standpoint, you cannot blame KLM at all, we were given generous special offers all over the last two years....
</font>
It was already confirmed, that the awards will be priced differently from country to country, beside that all the discrimination will stop at least from the standpoint of actual flown miles.But it would be possible to give certain countries more of a status bonus or even more offers.
As posted before, from a german standpoint, you cannot blame KLM at all, we were given generous special offers all over the last two years....
</font>
Take my AMS-CDG weekend trip example from above.
Dutch (Europe 1) member:
10.000 points needed for round trip now
2x.000 miles needed for award later
apply conversion rate of 1:2.x or better and communicate accordingly
German (Europe 2) member:
9.000 points needed for round trip now
20.000 miles needed for award later
apply conversion rate of 1:2.22 or better and communicate..
I therefore believe that the conversion is indeed dependent on the planned award levels. I think they will hurt a few members anyway who were able to take advantage of the old point system. Will be hard for KLM to make them stay in any case. But if they devalue your points so that you can't afford the same awards any more, that will cause a catastrophy IMO.
Sep 12, 2002 | 11:02 am
#25
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by ozstamps:
No newbe, I did not. I could have emailed you to advise this, but none shows in your profile.
</font>
No newbe, I did not. I could have emailed you to advise this, but none shows in your profile.
</font>
I resent the email to the address in your profile...
Sep 12, 2002 | 11:49 pm
#26
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by newbe:
I resent the email to the address in your profile...</font>
I resent the email to the address in your profile...</font>
Anyway in case of future contact, please use [email protected]
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Sep 13, 2002 | 8:31 am
#27
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If the platinum elite bonus applies only to award and not staus miles this is going to make it very difficult for many loyal royal wingers to stay top tier. 75000 miles a year is the equivalant of having to fly there and back to Cape Town 7 times in economy or 3.5 times in business. Hence I am not sure that there statement that no one will be dissapointed is not a bit optimistic!
Service points should be multiplied by at least 3.2 times in order to maintain status for the already promised time.
Service points should be multiplied by at least 3.2 times in order to maintain status for the already promised time.
Sep 13, 2002 | 10:46 am
#28
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KLM is obviously not introducing a 4 tier FF program just to add a category below Silver Wing. IMO it will be Platinum > RW > Gold > SW > Silver, with both current SW and RW's eventually benefiting or suffering from the change depending on by what margin they used to qualify under the current program.
The RW's who comfortably exceeded the 24000 point threshold will be Platinums, the rest Golds. Similar situation for SW's. If KLM indeed gives Platinum to all RW's and Gold to all SW's for the first year, this will be more of a transition period/ pacifier for FD elites than a one-to-one equivalency.
RW was easier to achieve than most other FFP's top level, and SW provided better benefits than most other 'Silver' elite levels. I certainly appreciated that benefit, and steered business KLM's way because of it. I do not expect to make Platinum with my current travel pattern, but will be reasonably happy if the benefits offered to Golds are not too diluted from the current RW level.
The RW's who comfortably exceeded the 24000 point threshold will be Platinums, the rest Golds. Similar situation for SW's. If KLM indeed gives Platinum to all RW's and Gold to all SW's for the first year, this will be more of a transition period/ pacifier for FD elites than a one-to-one equivalency.
RW was easier to achieve than most other FFP's top level, and SW provided better benefits than most other 'Silver' elite levels. I certainly appreciated that benefit, and steered business KLM's way because of it. I do not expect to make Platinum with my current travel pattern, but will be reasonably happy if the benefits offered to Golds are not too diluted from the current RW level.
Sep 13, 2002 | 6:13 pm
#29
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They may or may not discriminate on residence on the conversion ratio. What I would suspect would be more likely is that they might discriminate in the new programme on elite qualification levels depending on country of residence. Most European FFPs do that.
I must say that I am not enthused by what we hear about the new rules. Elite qualification levels are the thing that matters most and, like Johan, I suspect that I might find it difficult to make it to Platinum level on a regular basis.
On some routes, the drop in points awarded might be vertiginous. Think of AMS-TLS which earns you 3100 FD pts (UK residents rate) for a return flight. You'd need 8 return flights at present to make it to top tier elite. Under new rules, if 75 000 is the threshold for plat, you'd need 75 return flights in the worst case scenario and 19 return flights in the best case scenario (viz. double (level) miles for single cabin flights, and elite bonus counting towards level miles).
I must say that I am not enthused by what we hear about the new rules. Elite qualification levels are the thing that matters most and, like Johan, I suspect that I might find it difficult to make it to Platinum level on a regular basis.
On some routes, the drop in points awarded might be vertiginous. Think of AMS-TLS which earns you 3100 FD pts (UK residents rate) for a return flight. You'd need 8 return flights at present to make it to top tier elite. Under new rules, if 75 000 is the threshold for plat, you'd need 75 return flights in the worst case scenario and 19 return flights in the best case scenario (viz. double (level) miles for single cabin flights, and elite bonus counting towards level miles).
Sep 13, 2002 | 11:52 pm
#30
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It's a quite tricky situation for KLM.
The current complex program has been structured to target (and thus benefit) specific market segments, presumably for sound commercial reasons. Hence the use of points, which makes it easier to manipulate benefits.
Given that the FD membership base is thus highly fragmented, the conversion to a mileage-based program can not possibly please everyone. Just calculating all the possible permutations must be a mind-boggling challenge!
What I can't figure out is why KLM want to switch to a mileage based program in the first place. If they want to improve the program and make it more attractive to all, surely that can be achieved by changes to the existing points program?
As FD has not been conceived for altruistic or charitable purposes, there must be something else behind it. There is something to be said for a logical, transparent and comprehensible program, but I for one would certainly prefer an incomprehensible but generous scheme!
johan
The current complex program has been structured to target (and thus benefit) specific market segments, presumably for sound commercial reasons. Hence the use of points, which makes it easier to manipulate benefits.
Given that the FD membership base is thus highly fragmented, the conversion to a mileage-based program can not possibly please everyone. Just calculating all the possible permutations must be a mind-boggling challenge!
What I can't figure out is why KLM want to switch to a mileage based program in the first place. If they want to improve the program and make it more attractive to all, surely that can be achieved by changes to the existing points program?
As FD has not been conceived for altruistic or charitable purposes, there must be something else behind it. There is something to be said for a logical, transparent and comprehensible program, but I for one would certainly prefer an incomprehensible but generous scheme!
johan