Three and a half years ago Air France executives were talking about taking seriously the changes that Delta had announced for its frequent flyer program. Two years ago Air France said revenue-based changes like Delta’s were coming along with a reduction in benefits for silver elites. Although they said it might not happen until the first quarter of 2018.
Last month changes were leaked on Air France’s website including the rate at which customers would earn miles based on the cost of a ticket.
Now Air France KLM Flying Blue has formally announced details of its new program which goes into effect April 1, 2018. And they’re both convoluted and I expect destructive of value — but we don’t yet know how destructive.
Reportedly Flying Blue has a goal with their changes of increasing revenue from the program by 15%. They’ve revealed that while they sometimes talk about 31 million members of the program, there are 15 million active members that can be communicated with and about 1.5 million elites, and that all members redeem about 400,000 award tickets per year.
The TheFlyingDutchboy at Norwegian Insde Flyer website has full details of changes including the rather bizarre claim from Flying Blue executive Derrick Merkus that the program ‘should become easier and more transparent for members.’ When it genuinely makes my head spin.
Revenue-Based Mileage-Earning
Mileage-earning will be based on the cost of a ticket — and will award fewer miles than US programs which start at 5 miles per dollar (and remember that one Euro is still worth more than one dollar, which further magnifies the gap):
- Flying Blue Ivory: 4 miles per €
- Flying Blue Silver: 6 miles per €
- Flying Blue Gold: 7 miles per €
- Flying Blue Platinum: 8 miles per €
Travel on partner airlines will continue to earn miles based on distance flown and ticket fare class.
Elite Status Will Be Earned Based on ‘Experience Points’
Elite status will no longer be earned on miles or segments. Those will be replaced by ‘Experience Points’. Here they’re doing something similar to British Airways Tier Points. Elite earning isn’t going to be based on ticket price. Instead it’s based on distance bands and class of service.
Credit: InsideFlyer.nl
This applies to Air France, KLM, as well as partner flights.
Status is based on earning the following in a membership year:
- Silver: 100 XP
- Gold: 180 XP
- Platinum: 300 XP
There is no minimum spending requirement for elite status.
Elite Membership Year Will Be Different for Every Member
In the U.S. we’re used to earning status, and having that status last through the end of the next calendar year (plus a month or two depending on the program). So status earning last month — October 2017 — based on flying in all of 2017 would be valid through perhaps January 2019.
That’s similar to how Flying Blue has worked to date. Now members are going to have to figure out personalized member years.
When you join Flying Blue your qualifying period starts with the date of your first flight that earns Experience Points. Your qualifying period lasts 12 months from that date.
When you hit a status level your status lasts 15 months. They’ll offer soft landings so at the end of 15 months you drop only one level.
Each time you hit a new status level your 12 month qualifying period resets. Any experience points earned about the qualifying threshold roll over into the new qualifying period.
Example: An Ivory member will receive 120 XP’s in July 5, 2018. The threshold for Silver is 100 XP. From July 5, 2018, the member has 15 months Silver status, including until the end of the month. So until 31st of October 2019. The 20 XPs above the threshold go to the new qualifying period running until July 5, 2019. The member then needs 80 XP in the next 12 months to extend Silver, or 160 XPs required for Gold.
This all means of course that when you earn elite status it will last for less time than it does today. If you qualified for status 3 months into a year, it would be valid the rest of that year plus the full next year and 3 months into the third. In theory you could earn status for 27 months by qualifying in January. Now status will last just 15 months.
Converting Elite Status Miles to Experience Points
Flying Blue currently runs on a calendar year elite membership year, but they’re not making the change January 1. Instead the first 3 months of 2018 will proceed under the old system so they need to convert elite credits earned into the new system.
- 1000 elite miles -> 5 Experience Points
- 1 segment -> 7 Experience Points
- But you don’t earn both, you receive the higher of the two as your starting balance on April 1
And even though the new program starts April 1, the qualifying period for existing Flying Blue members is actually January 1 through December 31, 2018.
Elite benefits do not appear to be changing as part of this revamp. So there’s nothing more Flying Blue is doing for their best customers, just changing the hoops customers have to jump through.
Revenue-Based Redemptions Are Coming, Sort of
While the new elite status program starts April 1, a new redemption program starts June 1. Because they’re keeping it simple.
Regions and fixed prices for awards are being eliminated for Air France, KLM, and Hop, Joon, and Tansavia flights. Each route will have a base miles price which will vary ‘based on several factors’. Flying Blue will announce the ‘starting rates’ (which will vary) for award tickets some time in March.
Promo awards will continue,
The rate is the price of the destination minus a certain discount rate. This discount may vary by destination. Promo Awards remains limited availability
And they’re introducing cash and points awards where you can cover 12.5% or 25% of miles required for a ticket with cash, and the cash cost for those miles will be lower than buying miles separately.
Mileage Expiration Changes
As today miles will continue to expire after two years and the only way to extend their validity is a flight with Air France, KLM, Joon, Hop, Aircalin, Kenya Airways, Tarom or other SkyTeam airline or make a purchase with a Flying Blue co-brand credit card.
However if you earn miles with a non-SkyTeam partner airline or earn via another partner activity you’ll extend the validity of only miles earned with non-SkyTeam partner airlines and other partners.
Please note that only the validity date for Miles earned with commercial and other partners is extended, and not the validity date for other Miles.
We Don’t Know How Bad This Is
You’ll probably earn fewer miles on all but the most expensive tickets, although the absolute cheapest fares aren’t likely to earn that many fewer miles since they’re already earning so few.
They haven’t announced new award prices yet, so it’s difficult to evaluate the new program. Award prices are going to be less certain and more variable, and undoubtedly will be more expensive especially for flights today that represent a good value. Even if some go up and some go down, it’s the ones where you’d want to redeem that will go up. And they haven’t released the cash prices for cash and points awards.
Roughly speaking elite status changes are negative based on reducing the length of time status lasts for. And status earning periods varying by member is more confusing and requires more gaming — you may not want to qualify for status quickly, based on how much flying you think you’re going to do and when over the coming 12 months. However long haul economy passengers will find status easier to earn.
For US members who transfer American Express, Chase,or Citibank points the relevant change is the cost of awards for Flying Blue members. And we have to wait until the end of the first quarter to see what those will look like.
Continue reading Air France KLM Flying Blue’s New Revenue-Based Earn and Burn: Convoluted and Less Valuable…