Lufthansa Miles and More devaluation 2019

[KSMH]

Forbes: Lufthansa Plans To Shift Its Miles & More Frequent Flier Program Awards To Dynamic Pricing.
https://www.forbes.com/sites/douggollan/2019/05/22/lufthansa-plans-to-its-shift-its-miles-more-frequent-flier-program-awards-to-dynamic-pricing/

[mileagejunkie]

Wait for American to start having the best redemptions lol

[Aerial Dag]

Fliers who use Skymiles have complained about business class awards that sometimes price over a million miles for a single ticket, while airline executives argue that dynamic pricing enables them to open up extra seats for redemption at higher levels on high demand routes.

This sentence really sums it up. Customers want one thing and the executives come back with "no, we know better." It's really sad to see airlines turning themselves into commodities rather than building out unique competitive advantages that would gain a loyal following.

[mmgfarb]

This sentence really sums it up. Customers want one thing and the executives come back with "no, we know better." It's really sad to see airlines turning themselves into commodities rather than building out unique competitive advantages that would gain a loyal following.

I think it comes down to the fact that airlines don't really need loyalty anymore, that's why they keep devaluing both loyalty programs and elite status benefits.

[Sig]

I think it comes down to the fact that airlines don't really need loyalty anymore, that's why they keep devaluing both loyalty programs and elite status benefits.

Why don't they need it anymore? Is there a structural shift in the airline space that has changed this? What exactly caused them to "need" it before and now now?

[KSMH]

In a fair sense, airlines should take a balanced approach. Introduce dynamic award pricing for seats they consider to get sold or questionably sold and fixed prices for seats they would consider unsold + some for elites etc.

There are many companies and wealthy individuals that spend a ton of money on cc and use the points as just another way not to take cash out of their pocket. These types of people cause the airline to loose money absent introducing dynamic pricing.

Then there are regular spenders that specifically spend on a specific cc or an individual that specifically flies airline #1, so to be able to take a vacation etc, with these people the airlines will be loosing losing money if they introduce dynamic pricing.


It's hard to dispute the fact that blogs caused people to be way more mind conscious on what method of payment they are using and once these people feel they wont be able to get value out of points they will start using cash back cc @ 2%.

Imagine  a blog not being able to boast about first class, they would have way less readers and cc companies wont be making that much money, and most of those people redeeming anyway dont maximize the points so why bother making things so restrictive? for those few people that know how to get value? will the blogs still have what to hype about?

I think it's time for airlines to realize that not always is there room to squeeze. By looking at some airlines financials, the only area they are making money is points, so why mess?

[GEMARAKOP]

In a fair sense, airlines should take a balanced approach. Introduce dynamic award pricing for seats they consider to get sold or questionably sold and fixed prices for seats they would consider unsold + some for elites etc.

There are many companies and wealthy individuals that spend a ton of money on cc and use the points as just another way not to take cash out of their pocket. These types of people cause the airline to loose money absent introducing dynamic pricing.

Then there are regular spenders that specifically spend on a specific cc or an individual that specifically flies airline #1, so to be able to take a vacation etc, with these people the airlines will be loosing losing money if they introduce dynamic pricing.


It's hard to dispute the fact that blogs caused people to be way more mind conscious on what method of payment they are using and once these people feel they wont be able to get value out of points they will start using cash back cc @ 2%.

Imagine  a blog not being able to boast about first class, they would have way less readers and cc companies wont be making that much money, and most of those people redeeming anyway dont maximize the points so why bother making things so restrictive? for those few people that know how to get value? will the blogs still have what to hype about?

I think it's time for airlines to realize that not always is there room to squeeze. By looking at some airlines financials, the only area they are making money is points, so why mess?

Thats exactly the point they look at delta making billions off of the amex relationship while those in the game call their points skypesos. Why wouldn't you follow their lead they get the best of both worlds

[PlatinumGuy]

Dynamic pricing has nothing to with exorbitant pricing.

DL was exorbitant before it was dynamic.

AF is cheap after it is dynamic.

[joey89]

Why don't they need it anymore? Is there a structural shift in the airline space that has changed this? What exactly caused them to "need" it before and now now?

Airline mergers. Many (most?) travelers only have 1 or 2 airline/flight options so there is not much competition to drive the price down.

[PlatinumGuy]

It's been 5 years since the last major airline merger. (Excluding AS/VX).

In my opinion it is a cumulative result of the increasing quantity of outstanding loyalty points and availability of dynamic pricing technology.

[KSMH]

Technology is definitely a player. I'm guessing the technology providers are pushing their software as a way to show they are ontop of their game not realizing there are other factors at play as well. They actually boast about it in their advertising material.


 Maybe delta, southwest and JetBlue can afford some type of devalued point program due to better service, better cancellation and baggage rules or cheaper buisness pricing as in the latter case and many more benefits they provide. AA, seriously? are you providing guaranteed delayed flights?



It's sad to see AA think they can just devalue without any loss at play. Maybe the mechanic union can help them figure this out.

[Sig]

Airline mergers. Many (most?) travelers only have 1 or 2 airline/flight options so there is not much competition to drive the price down.

The transatlantic market is one of the most competitive in the world with dozens of major and a few low cost carriers, and Europe has dozens of low cost carriers and dozens of national carriers that compete with LH. It's absurd to claim LH no longer faces a competitive environment! In fact the world is far more competitive now than when airline loyalty programs were first introduced, heck prices were literally regulated the year before the first program came out!

[Sig]

By looking at some airlines financials, the only area they are making money is points, so why mess?

This is a pet peeve misunderstanding of managerial accounting. No airline "only makes money from points" They all make money from flying people and stuff from point A to B, as evidenced by the fact that every one of them would cease to make money if they stopped flying people and stuff regardless of how robust their FF programs are. It's much like saying an airline "makes it's money flying people who's last name begins with A-H". If you want to apply all your revenue of the I-Z folks to your cost centers and consider the revenue from A-H folks your profit...sure. Doesn't make any sense, but makes a nice sound bite if you don't stop to actually think about it.

[db23]

any confirmation as to when this is happening? i am hearing October.

[Muhammad]

any confirmation as to when this is happening? i am hearing October.

source?