Inside info on new FD program
 

Take a look at the following thread on the KLM uk forum :

http://193.128.182.20/forums/Thread....ad_ID=723&mc=2

johan

THANKS JOHAN-

Below is summary of key pints from link:

I must admit I underestimated KLM on the conversion. But it looks like status via segments could be in danger. Better to have good news/bad news than bad news/bad news.

Four valuable points:

1. The conversion rate is approx 1.8 mile per point to mile you have in yr account.

2. RW members will be given Platinum Elite Cards for the first year, longer if they qualify already with FD points for future years ( ie multiples of 24,000 points.) Silver members will be given Gold Elite, & those almost reaching silver will get a silver card.

3. Platinum elite members will get a 100% bonus on service miles on all flights.

4. You will need 75,000 +flight miles each annum measured 31st Dec each year to renew to Platinum Elite. Business class earns x 2 rates of mileage for service & awards.

If this is true I will be out a couple of bottles of scotch but will be happy. There has to be a catch somewhere? Airlines just aren't nice (maybe I'm biased by the terrible treatment from AC over the last year).

Thanks for the heads up Johan. Can't believe they are going w/ 1.8 conversion. My calculator can barely display all the numbers in my new mile account http://www.flyertalk.com/forum/smile.gif

Now I'm curious to see what the new mileage levels for awards will be.

At 24K per year, I guess I'll be Platinum Elite For Life, based on the 1.8 conversion.

Lucky you,

so many status points in your account now? Or do you expect to get level miles (status miles) for award travel, too?

Ojh yeah, I forgot about award/bonus points not being the same as service/status points!
Guess I'm gonna have to actually fly a few segments each year!

I have for years had a fairly regular KLM flying pattern :

±18 segments at 550 points = 9900
6-10 segments at 3,600 points = 21,600 - 36,000

for a total of 31,500 - 45,900 service points, with a few flights to miscellaneous destinations on top of that. I thus qualified for RW by a very comfortable margin.

The exact same flights will earn me between 42,510 and 54,820 miles! On that basis I might or might not qualify for gold, but not even come close to platinum.

I currently have enough service points for at least five years of RW, which at a conversion rate of 1.8 will be enough for three yearts of platinum.

Assuming the "inside information" is correct, I can only conclude that KLM are doing their utmost to chase my right into the arms of the competition!

johan

newbe ..... please remember, Mike Turnbull and I do prefer the Dom Perignon chilled slightly. http://www.flyertalk.com/forum/wink.gif

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~ Glen ~ Calling all United 1K Members - please join .. www.1Kflyers.com

Not too good so far... We have to wait for the details to make a whole picture out of it...

Thanks again Johan for finding this..

Seems like we can have a lot of benefits if they copy NWA, the entrance level of 75.000 miles are taken from NWA so why not the other benefits like "unlimited business upgrade in Europe" http://www.flyertalk.com/forum/wink.gif
They even might take out the very best and knowlegded people from the FD Helpdesk to make an
"Exclusive Elite Services Reservations Line, with dedicated Elite Services agents who are specially trained to address Elite members' travel needs. " http://www.flyertalk.com/forum/smile.gif

***********************************
WorldPerks Platinum Elite Benefits :

For WorldPerks members who fly more than 75,000 Elite qualifying miles in a calendar year, WorldPerks Platinum Elite membership affords our highest level of prestige and privilege:

125% Mileage Bonus on credited flight miles earned on Northwest Airlines, Northwest Airlink, KLM Royal Dutch Airlines, Continental Airlines, Alaska Airlines and other WorldPerks Partner Airlines.

Unlimited Confirmed First Class Upgrades on domestic Northwest- and Continental-operated flights, with no certificates required - and the ability to upgrade from any fare.

Unlimited Companion Upgrades on domestic Northwest- and Continental-operated flights, which provide the opportunity to upgrade one travel companion on every qualifying flight.

Exclusive Elite Services Reservations Line, with dedicated Elite Services agents who are specially trained to address Elite members' travel needs.

Priority Check-In and Pre-Boarding Privileges on Northwest, KLM and Continental, providing prompt check-in and additional time to settle in before takeoff.
Elite Personal Privileges, offering access to unique venues, exclusive privileges and special offers from our participating WorldPerks Partners.

*************************************

Oh Happy days http://www.flyertalk.com/forum/smile.gif

If they really would copy the free domestic northamerican upgrades to free european upgrades that would for shure make us and other FF's extremely happy. Possible other devaluations then would not be a problem, KLM FD would be the most outstanding FF-prog in europe for shure.

But I doubt that. They would loose some money from newly Plats then hoping to get a free upgrade instead of buying a C-tix. And in the current situation loss of those fares in exchange to make your FF's more happy would be risky...

Looking at it from another perspective :

The current RW qualification level is 24,000 Service Points. Assuming the Platinum level will be 75,000, the conversion rate would have to be just over 3 Level Miles to one Service Point, if one's accumulated Service Point balance is to retain its value.

As far as earning points/miles is concerned, I think there are very few routes, if any, where the actual mileage is three times the points currently earned. The one exception is for residents of the Netherlands, because they earn so few points.

johan

At a conversion rate of 1:1.8 the Dom Perignon and me will be at about the same temperature, ozstamps:
slightly chilled
http://www.flyertalk.com/forum/wink.gif

The bet is fine with me, btw. Did you get my email, ozstamps?

However, I still think such a conversion rate is not advisable unless they introduce extremely low award levels. And that would be really surprising to me.

I deliberately take the example from the FD program brochure since everybody knows that. We're going for a trip from Amsterdam to Paris. Depending on where you live you need 9.000 or 10.000 points for the round trip now. Let's assume we're living in the KLM home market (Netherlands), hence we'll need 10.000 points for that weekend trip.

Now what will be the cost in miles? Not less than 20.000 in my opinion.

Since I assume that quite a few Dutch customers will do this or a very similar calculation, KLM will very likely need to convert at a rate of 1:2 or better in my opinion.

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... ? http://www.flyertalk.com/forum/wink.gif

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

Yes, 1:1,8 will be too low if awards will cost more than the double !!

Hey - no one said it needed to be FAIR. http://www.flyertalk.com/forum/wink.gif


No newbe, I did not. I could have emailed you to advise this, but none shows in your profile. http://www.flyertalk.com/forum/biggrin.gif



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~ Glen ~ Calling all United 1K Members - please join .. www.1Kflyers.com

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.....

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?

This is getting too exiting ..

remember "No one, will be disappointed"

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....

If I were in charge I would do it the following way:

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.

top secret http://www.flyertalk.com/forum/wink.gif
I resent the email to the address in your profile...

Wow that is strange, received neither. Must be getting blocked somehow? http://www.flyertalk.com/forum/frown.gif

Anyway in case of future contact, please use [email protected]



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~ Glen ~ Calling all United 1K Members - please join .. www.1Kflyers.com

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.

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.

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).

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

I'm still here...watching and waiting..patiently. (The empty glass is on the side table here)

Wait a minute, I'm feeling a little giddy. If I just comped royal wing and got 600K points (supposed to post any day http://www.flyertalk.com/forum/tongue.gif), does this mean I will end up with 600K x 1.8 conversion rate = > 1 million miles!!!

say it is so. I may start to fly KLM for real.

[This message has been edited by MilesToGoBeforeISleep (edited 09-14-2002).]

Many of us think it is 'so'. http://www.flyertalk.com/forum/wink.gif



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~ Glen ~ Calling all United 1K Members - please join .. www.1Kflyers.com

The scream Fred (Harland Williams) gave out in the movie Rocket man comes to mind.

http://www.harlandwilliams.com/harla...et/rock028.wav

Edited to add link.

[This message has been edited by MilesToGoBeforeISleep (edited 09-15-2002).]

A conversion factor of 1.8 sounds great. On the other hand, I think that unfortunately it's realistic to believe that we will have to start paying double miles to get the flights we want. I doubt very much that they will give a 100% platinum bonus while retaining the current policy of expanded award availability for RoyalWings. Likely, they will argue that the purpose of the 100% bonus is for platinum members to afford paying double miles for "anytime awards." While it will be neutral for future miles earned by platinum members it will effectively depreciate the value of any current (comped) miles.

Please explain (no, my surname is not Hanson http://www.flyertalk.com/forum/smile.gif ) :

KL have one major disadvantage: they are based in a relatively small country and are thus crucially dependent on transfer traffic. This necessarily hampers their ability to compete at the top end of the market, as money-no-object flyers in the large European countries will tend on the whole to prefer direct flights. The sensible thing to do is to target the middle-rank market. Their business class product (decent but lagging behind the competition) and pricing policy (rather lower) are in line with that.

Now, you would expect that the FFP would be in line with their customer base. That is on the whole true of the existing FD programme: a frequent flyer programme that allows access to top elite status for middle-rank frequent flyers. So, why destroy that competitive advantage by making access to top elite status much more difficult?

Who says they are doing that? KLM certainly are not. On the contrary, they would have us all believe that "You can see why the changes to the FD program are rewarding for you!" http://www.flyertalk.com/forum/biggrin.gif

johan