CalFlyer

Indeed. And even worse, I would normally count myself into the camp of "LH apologists". But I have been annoyed once too often in recent months. The ridiculous fuel surcharges, the introduction of the "optional payment fee" (or whatever they call it) for credit card payments (even with LH Matercard), and the retroactive devaluation of miles. There is a pattern evolving of trying to (over-)milk the cow. LH starts feeling like a shady car rental company.

Most customers have a good sense of fairness. LH got more than their fair share of my business after introducing HON (I have been a member since day 1). I often picked LH over competitors only because I was grateful for the overall treatment I received. And I think I was not the only one: Antinori once told me that revenues per HON went up 20-30% with the introduction of the program. Treat me as a valued customer again, and you will see my business again. In the meantime, most of my travel dollars go to Etihad Airways - better hard product, good soft product, fair award program, and a compelling Elite-program as well. Good that I already re-qualified last year for HON, so I can sit it out this year.

RTW1

I think your speculation is for a large part based on how you would like the ruling to be made, not on any facts (or a history of how these kinds of verdicts are normally tailored towards consumer rights). But you are right without the full verdict it's for a large part speculation.

But I'm also quite sure that if the verdict would have contained anything like a statement that the 4 month period was derived with the intention of using all 800k miles in this period this would have been published.

I'm leaning more toward an interpretation that after a period of 8 years of not changing the redemption charts a 1 month period is not considered as a sufficient period for communicating and implementing changes. But in my opinion 5 years would be just as ridiculous.

That's also something that isn't clear from what has been published, as usual the press is doing their (lazy) job without really providing any useful information. And there is surely going to be an appeal from which the end result is anything but clear.

But you never know, LH might surprise us by making some positive statement about this. Although with the number of miles on their books the stakes are high, and it would not be reasonable to expect that redemption and earnings rates will remain the same for ever... the lesson should be to use your miles instead of hoarding them.

And for LH it might be a valuable lesson on how to use a FFP as a positive thing for your best customers, instead of engaging them in lawsuits. But I don't have high hopes, the financial stakes are just too high and money is thight at the moment.

CalFlyer

As I said, all speculation right now, RTW.

LHSINFF

He won the law suit against LH. Although LH has the right to alter terms and conditions of the M&M program - they have to give more notice than the one month they did in this case. The court felt at least 4 months would have been appropriate. Not sure whether LH will appeal - or what that would mean for others. There is talk that there are many in Germany awaiting the outcome of this case and considering sueing as well.

Here is a link about the ruling:
http://www.spiegel.de/reise/aktuell/...821747,00.html

Koby

Post #71... a few pages up... But thanks anyway!

moeve

In all honesty there is no way in the world that even a fraction of M&M Miles could be used for flying even with 4 months of warning - so even that is really cosmetics

oliver2002

If you carry a large balance... which is a always a risk. When M&M changed the rules completely in 2004, the value of miles on hand were actually appreciated, since it was more difficult to earn them. The Nov 2010 change was a devaluation, so a large balance was a risk. I had some 870k on hand and estimate the devaluation to be around 10% for my redemption pattern. A healthy balance for M&M would be around 250-300k which probably shouldn't be a big issue with a 4 month notice.

In any case, the judgement is just for this one instance, and will be effective for this one individual on April 20 if LH doesn't appeal. If it becomes valid, then you have to file your own suit, reference the other judgement and get a high enough value to get to the same court level. In this particular case they bundled a few 261/04 situations along with the M&M topic to make it large enough for a LG to look at it.

TRAVELSIG

Perhaps the company could also come back and say "sorry, we made a little mistake back in November"- and now would like to fix it. A little apology goes a long way towards goodwill.

I don't think arguing that "you kept a large balance- that is your risk" is a very good customer retention strategy longer-term.

IIRC when looking at frequent flyer programs and their financing in detail a few years back- the revenue generation through the sales of miles/points/affinity to financial institutions, lodging companies, car rental and leasing companies, telecom groups, automotive retailers, publishers- was very lucrative indeed as compared to the marginal costs on redemption. If the miles/points/affinity become perceived as not being a major value to the receiving- the companies offering points/etc don't have to purchase as many.

Sooner or later oliver- it is the customer who purchases a product- and certainly blaming the customer for "purchasing too much and thus risking a devaluation" is a very risky proposition to raise from an affinity program point of view.

oliver2002

Who said LH is saying that? They want you to spend you millions on cr@p at the Worldshop and not carry a large balance because they have to accrue for it as per IFRIC 13.

I'm saying a savvy FTer shouldn't have humongous balance of around a million and rather keep it around a quarter million. That way you limit your losses.

TRAVELSIG

I would think that LH probably pays more for purchases made through Worldshop as opposed to an upgrade from C to F.

oliver2002

The plaintiff (probably) argued as described here: http://meilenschwund.wordpress.com/meilenwert/

RTW1

That's a sensible statement that more people should apply.

But reality probably is that most people who complain the loudest have gotten their miles through flights their employers/customers have paid for. And because they fly so much there is hardly any time left to use these miles on award flights.

And although I also feel LH is at fault here by making these changes in an inadequate short time period, it's not realistic to expect your miles will not be influenced by "inflation" for years to come (or as some would like to see, indefinitely). That's just not economically feasible for LH with the number of miles they are having to account for.

But it will be interesting to see if LH has learned something from this PR fiasco. I'm afraid that since one of the main problems was that they hadn't changed the redemption rates for such a long time, they will not make that mistake again.... Hopefully the full verdict will be published soon.

moeve

While I agree with you to a CERTAIN extent about the inflation here I also beg to differ though because bear in mind the LH tacks on HUGE taxes and fees to flights none of the other programes have..... effectively there are the inflation related increases.

As to not having too many miles while that is legitimate suggestion but imagine if every M&M holder with 100.000 miles in their accounts would want to purchase a single flight within that given 4 month period - it simply wouldn't be possible since there are not that many flights go around at least not award flights. Oh sure there are other ways to spend them but why should I have to - that is after all the reason for the collection of AIRLINE miles!

Maluku_Flyer

And many of them work for companies that don't allow the use of company miles for private award flights. That includes my own company, but nobody has ever checked. And I really don't know how they could even do that, since we're not required to keep print-outs of old mileage balance statements. And M&M doesn't have an account history that can be accessed by the members. EK is different in this respect, I can still see my oldest flights on their web page.

CalFlyer

Problem is that I have not had the time to use any of my miles for many years, basically flying all the time for business. So miles tend to build up.