Author Topic: AS devaluation of EK redemptions  (Read 28553 times)

Offline benjie1305

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Re: AS devaluation of EK redemptions
« Reply #40 on: March 31, 2016, 10:26:31 AM »
Until CX devalues, people will still churn and buy miles in the AS program as there is still tremendous value to be had and the best way to Asia2 for now.

But I have a strange feeling that that will change soon..
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Offline AJK

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Re: AS devaluation of EK redemptions
« Reply #41 on: March 31, 2016, 10:27:35 AM »
Until CX devalues, people will still churn and buy miles in the AS program as there is still tremendous value to be had and the best way to Asia2 for now.

But I have a strange feeling that that will change soon..
Uhm, as of today, you'd have to be a blithering idiot to spend thousands on AS miles without being able to ticket while on the same phone call.
2015: 116K bkd | 1.6M brnd | F: OZ,NH,AA,EK | J: UA,CA,TK,DL,TN,AF,VA | LIH,NRT,ROR,PEK,CNS,BOB,MEL,TLV & Pacific Hopper

Offline EJB

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Re: AS devaluation of EK redemptions
« Reply #42 on: March 31, 2016, 10:35:02 AM »
Wait, you're suggesting it will impact the BIS flyers *less?*

So I earned 1MM+ AS miles in about a half hour in 2015, and they earned 100K in about a year,  and now they'll have fly for *another year*, and it impacts them less?

Just because there are fewer MVPs than churners doesn't mean the effects are less. In point of fact, they are more, as that's where the actual business comes from. (Not to mention even pissing off churners and mileage buyers affects the bottom line as well.)

Again, it'll impact those that are saving for this particular redemption the same, but I don't think as many of them (both in # and %) are saving for this particular redemption.

Re: Bottom line impact - You're assuming this particular type of redemption at the old rates was profitable for AS from churners and mileage buyers. I'm not convinced it was, especially from churners. And, if you really want to talk about bottom line impact, AS can recognize the expected decrease to their mileage liability as income almost immediately, and doesn't need to do much work to justify what they select as the expected impact caused by alienating members (which I would hope they explicitly incorporate in their projection model).

I agree with your point about how this can alienate mileage buyers, but frankly I'm not convinced AS cares about alienating churners.

Offline benjie1305

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Re: AS devaluation of EK redemptions
« Reply #43 on: March 31, 2016, 10:49:14 AM »
Uhm, as of today, you'd have to be a blithering idiot to spend thousands on AS miles without being able to ticket while on the same phone call.

True, no notice is not fun.

I was merely commenting on churners still seeing value in going for AS cards. For that TU pull I am happy taking on that risk (even if it just came to bite me a bit).
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Offline AJK

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Re: AS devaluation of EK redemptions
« Reply #44 on: March 31, 2016, 10:49:35 AM »
Again, it'll impact those that are saving for this particular redemption the same, but I don't think as many of them (both in # and %) are saving for this particular redemption.

Re: Bottom line impact - You're assuming this particular type of redemption at the old rates was profitable for AS from churners and mileage buyers. I'm not convinced it was, especially from churners. And, if you really want to talk about bottom line impact, AS can recognize the expected decrease to their mileage liability as income almost immediately, and doesn't need to do much work to justify what they select as the expected impact caused by alienating members (which I would hope they explicitly incorporate in their projection model).

I agree with your point about how this can alienate mileage buyers, but frankly I'm not convinced AS cares about alienating churners.

You accountants/consultants/advisors love to quantify things, but I'm afraid the backlash to a no-notice devaluation, system wide or not, to one of the-if not the--most aspirational awards on your chart can't be quantified at this point. While theoretically possible to insulate the MVPs from the deval, that's not what AS chose to do, and are, in effect, throwing out the baby with the bathwater--regardless of whether they can "recognize the expected decrease to their mileage liability as income almost immediately."

The point is, devaluations are something that, given the climate, are required by economics.  However, programs can go a long way to avoid pissing off their MVPs by giving notice ahead of time.  Not to mention the possible legal questions posed by what appears to be a rudimentary bait and switch for those who purchased miles.
2015: 116K bkd | 1.6M brnd | F: OZ,NH,AA,EK | J: UA,CA,TK,DL,TN,AF,VA | LIH,NRT,ROR,PEK,CNS,BOB,MEL,TLV & Pacific Hopper

Offline shmoe joe

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Re: AS devaluation of EK redemptions
« Reply #45 on: March 31, 2016, 10:55:41 AM »
And what is his position in AS? Phone Rep?
good joke!>:( About a year ago I met him while Vacationing in Hawaii, and we exchanged email's he happens so to be Jewish so I've send him matzos, menorah, asrog and lulav etc. I don't know his position but its enough high that he was able to help me a lot!
give some love (likes) to a brother!

Offline AJK

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Re: AS devaluation of EK redemptions
« Reply #46 on: March 31, 2016, 10:59:21 AM »
good joke!>:( About a year ago I met him while Vacationing in Hawaii, and we exchanged email's he happens so to be Jewish so I've send him matzos, menorah, asrog and lulav etc. I don't know his position but its enough high that he was able to help me a lot!

Nicely done. Care to show how?
2015: 116K bkd | 1.6M brnd | F: OZ,NH,AA,EK | J: UA,CA,TK,DL,TN,AF,VA | LIH,NRT,ROR,PEK,CNS,BOB,MEL,TLV & Pacific Hopper

Offline Dan

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Re: AS devaluation of EK redemptions
« Reply #47 on: March 31, 2016, 11:07:57 AM »
Ask him why there was no warning.
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline PlatinumGuy

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Re: AS devaluation of EK redemptions
« Reply #48 on: March 31, 2016, 11:08:26 AM »
And KE doesn't either, correct?
KE does
״וזה כלל גדול: שישנא אדם כל דבר שקר. וכל מה שיוסיף שנאה לדרכי השקר – יוסיף אהבה לתורה.״ - אורחות צדיקים

Offline EJB

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Re: AS devaluation of EK redemptions
« Reply #49 on: March 31, 2016, 11:08:57 AM »
You accountants/consultants/advisors love to quantify things, but I'm afraid the backlash to a no-notice devaluation, system wide or not, to one of the-if not the--most aspirational awards on your chart can't be quantified at this point. While theoretically possible to insulate the MVPs from the deval, that's not what AS chose to do, and are, in effect, throwing out the baby with the bathwater--regardless of whether they can "recognize the expected decrease to their mileage liability as income almost immediately."

That's exactly my point. Since it's difficult to quantify (albeit not impossible to estimate, as you suggest), I wouldn't be surprised if AS is using the lowest negative impact they can justify in their models. And, I'd hope they would have conducted this analysis before deciding on the devaluation, so they'd know exactly what that impact would be before deciding to devalue. Meaning, from a bottom line perspective, this change will likely have an immediate positive benefit, followed by an unknown future impact (that AS probably believes will be positive).

And again, this may be "one of the-if not the--most aspirational awards on [their] chart" for us, but I'm not sure the typical business traveler has the same aspirations as we do. AS should have the data to project how many frequent flyers (vs. frequent churners) would be impacted, and I would hope they made a decision based on that data. If, for example, 50% of churner redemptions is for EK F but <5% of MVP (through flight) redemptions is for EK F, the no-notice might not cause as much negative backlash.

IMO the bigger issue here that would impact the entire program is the precedent of a no-notice devaluation. AS may be banking on flying below the radar and hoping their most profitable customers don't realize what they did. I'm not sure whether this will work.

Offline Dan

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Re: AS devaluation of EK redemptions
« Reply #50 on: March 31, 2016, 11:20:17 AM »
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline eliteflyer

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Re: AS devaluation of EK redemptions
« Reply #51 on: March 31, 2016, 11:34:45 AM »
With these devals, I'm rushing to get the over-seas travel bug out of my system and focus more on the other trips I've been putting off that are much closer to home, such as our National Parks (that, frankly, I enjoy more than than many of the foreign countries we book these aspirational awards to).

Offline AJK

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Re: AS devaluation of EK redemptions
« Reply #52 on: March 31, 2016, 11:39:40 AM »
With these devals, I'm rushing to get the over-seas travel bug out of my system and focus more on the other trips I've been putting off that are much closer to home, such as our National Parks (that, frankly, I enjoy more than than many of the foreign countries we book these aspirational awards to).

Yup. As I've said in other places, the worth of my AS stash got halved overnight without notice. Stuff like this makes me want to just hang it up and call it a day.
2015: 116K bkd | 1.6M brnd | F: OZ,NH,AA,EK | J: UA,CA,TK,DL,TN,AF,VA | LIH,NRT,ROR,PEK,CNS,BOB,MEL,TLV & Pacific Hopper

Offline Emkay

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Re: AS devaluation of EK redemptions
« Reply #53 on: March 31, 2016, 11:44:05 AM »


Stuff like this makes me want to just hang it up and call it a day.
Sounds like you have the backbone of a jellyfish. 

Offline ilherman

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Re: AS devaluation of EK redemptions
« Reply #54 on: March 31, 2016, 11:52:43 AM »
I have a guy in Alaska airline and he confirmed it has nothing to do with them!
What a bunch of BS. They set their own rules nothing to do with EK.

Its bizarre how they think they could just lie to their members.

I mean how come JL did not change?
You can say what you think when you think what you say.

Offline Hershelsdeals

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Re: AS devaluation of EK redemptions
« Reply #55 on: March 31, 2016, 12:15:08 PM »
What a bunch of BS. They set their own rules nothing to do with EK.

Its bizarre how they think they could just lie to their members.

I mean how come JL did not change?
Perhaps the JL contract with EK isn't up yet.

(Perhaps)

Offline shmoe joe

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Re: AS devaluation of EK redemptions
« Reply #56 on: March 31, 2016, 12:22:09 PM »
Ask him why there was no warning.
he said he understands our frustration (at least this!) And says that they've  had huge backlash, but EK let them out cold without earlier notice and as a side note he points out to me that they would never do such a dumb move if was up to them it's really not good for There customer satisfaction!
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Offline EJB

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Re: AS devaluation of EK redemptions
« Reply #57 on: March 31, 2016, 12:24:00 PM »
Perhaps the JL contract with EK isn't up yet.

(Perhaps)

There may be some truth to this. I  believe EK has a 4/1 contract w AS. I'd be surprised though if AS had no notice of this change, though.

I'd be curious to know what specifically EK changed.
« Last Edit: March 31, 2016, 12:35:58 PM by EJB »

Offline AJK

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Re: AS devaluation of EK redemptions
« Reply #58 on: March 31, 2016, 12:37:26 PM »
Sounds like you have the backbone of a jellyfish. 

Not really, it's simply taking stock of both the "game" and my life.

There's no question it will continue getting harder and harder.
2015: 116K bkd | 1.6M brnd | F: OZ,NH,AA,EK | J: UA,CA,TK,DL,TN,AF,VA | LIH,NRT,ROR,PEK,CNS,BOB,MEL,TLV & Pacific Hopper

Offline eliteflyer

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Re: AS devaluation of EK redemptions
« Reply #59 on: March 31, 2016, 12:40:33 PM »
Assuming this is somehow coming from EK (even if just an increase in the charge imposed to partners for award redemptions), could it be related to the general belt-tightening going on in Dubai and the middle east now with plummeting oil prices? (which this: http://www.arabianbusiness.com/dubai-set-bring-in-9-50-airport-passenger-fee-626743.html  may be a symptom of)