"Loyalty is priceless" however, it seems the time has come for some companies to "I don't give a damn about you"
I often say it, in Italy the Frequent Flyer topic is taboo, except (perhaps) for a few articles about the Millemiglia program [...]
I often say that, in Italy, the topic of frequent flyer is taboo, with the exception (perhaps) of a few articles on the Millemiglia program always in the Alitalia crisis and the like, this topic is never mentioned.
In this article:
In the Anglo-Saxon world, but not only there, things are profoundly different. If at the bar in Italy we talk about soccer, in the U.S. we talk about miles, in the U.S. accumulating points and taking advantage of the benefits of credit cards and FF cards is the norm, in Italy it is abnormal.
Last weekend, for example, a beautiful article came out on CNN with a very telling title: "Frequent flyers have spent years staying loyal to airlines. Now airlines are giving them 'the middle finger'" which translated into Italian might sound like this, "Frequent flyers have been loyal to the airlines for years, now the airlines are sending them to c%%6Tare" (ed. I doubt that with the exception of Libero, a legacy paper could ever titrate like this in Italy)
The trigger for this analysis was, needless to say, British Airways' move to twist the rules of gaining status in its executive club, a move never seen before in this industry. Now you no longer have to be a frequent traveler to have the status, but just have to be a high-spending customer, even flying only once a year. A paradigm shift that has been on everyone's lips in the UK for the past 2 months, but also overseas and in the rest of the world, partly because the frequent flyer program is from a British company, but then the member can live in Australia, Brazil or like yours truly in Italy, and be an elite user just the same.
Singular then that the day after this article also Lufthansa announced the revolution, for the worse, masquerading as an improvement of its Miles&More. And even in Germany for days that's all they've been talking about because miles are not a niche issue, miles are those things that push users' consumption in one direction rather than the other. They are that spring that pushes you to book with a company rather than a competitor. The trait d'union is always the same as well as BA also LH talks about improvements made after listening to the base.
If British Airways has made a mock reversal., LH has distinguished itself by giving almost 4 months' notice to its customers, with one small flaw well remarked by Reisentopia in a cool-headed analysis: zero transparency, very little information, and lots of doubts. Because it is true that it has been said as of June 3 everything changes, but no parameters have been given as to whether and how award ticket redemptions will change (for better or worse).
In this scenario, the only voice against the tide is that of Flying Blue's number one, That is, the loyalty program judged to be the best in the world, Benjamin Lipsey. Ben is a former Canadian kid who went from running the family miles to becoming a key figure in this industry, but without forgetting his origins, without ceasing to frequent dot-com forums, and without selling his soul to the devil. He is the one who, for example, in a recent error fare decided to honor the tickets issued by frequent flyers, The same one who responds when there are problems or doubts with a manner and approach that we Italians can only admire.
In the CNN article Lipsey is one of the interviewees and makes his beliefs very clear (and Flying Blue's) "You don't put a price on loyalty." and that is exactly what British Airways and Iberia did instead. To clarify his position, Flying Blue's deus ex machina candidly admitted that he hopes to earn tens of millions of dollars from the BA debacle, because then it's only fair to remember that loyalty programs don't do charity, they don't give anything away, in fact they are real money machines.
In the United States, it is estimated that airlines earn more than $15 billion annually from the sale of loyalty points to financial institutions. For example, Delta Air Lines grossed more than $5 billion in 2022 through its partnership with American Express. Other airlines also derive significant profits from their loyalty programs. In 2008, an analysis by JPMorgan Chase estimated that Qantas' loyalty program was worth A$2 billion, accounting for more than a quarter of Qantas' total market value. Even Alitalia has always made money from Millemiles, while the rest of the company was losing billions the miles have always been in the black.
And we Italians? don't realize that we lose opportunities while still paying the ticket price. It applies to groceries at the supermarket as it does to airfare; you pay for the points even if you don't use them, and if you don't use them the company is doubly happy. Now then that we have to prepare for the transition into Miles&More we should be interested spectators to this newly announced news, but in the end "points? I can never use them, I prefer a pot to a business class ticket."
