Air NZ Changes Airpoints Scheme

Discussion in 'Air New Zealand Airpoints' started by redrat, Jul 29, 2004.

  1. redrat

    redrat Member

    Apr 26, 2003
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    Vic
    I just got this notification of the ASX and it poses some interesting thoughts...
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    SUBJECT Relaunch of customer loyalty programme
    Air New Zealand today announces enhancements that make Airpoints one of the world’s most innovative and attractive airline customer loyalty programmes.
    Managing Director and Chief Executive Officer Ralph Norris says one of the key features of the enhanced programme is that Airpoints members will be able to book any seat on any Air New Zealand ticketed and operated flight.
    From 16 November, Air New Zealand Airpoints Dollars ( ) will replace Airpoints as the programme currency.
    Able to be used just like cash when booking seats, one Airpoints Dollar will be equivalent to one New Zealand dollar, with members able to choose from every seat, every flight, on every Air New Zealand ticketed and operated flight. More than one million Air New Zealand customers are Airpoints members, with 780,000 of these living in New Zealand.
    On 16 November, all members’ existing Airpoints balances will be converted to Airpoints Dollars with 75 Airpoints equating to one Airpoints Dollar.
    Mr Norris says the conversion ensures that the vast majority of journeys that could have been taken by Airpoints members with their reward points can still be taken with their new Airpoints Dollars balance.
    “As well as being able to purchase any seat, 61% of flight redemptions will require fewer equivalent points to purchase the lowest fares and 15% of redemptions will require the same number of equivalent points.”
    Overall, the number of Airpoints Dollars required at the lowest published fare to obtain the flight redemptions taken in the past 12 months will be an average 6% less than the equivalent number of Airpoints required under the old programme,” says Mr Norris.
    As an earning rate example, a return flight between Christchurch and Auckland costing 20,000 Airpoints would convert to 266.67 Airpoints Dollars. A standard return Smart Saver fare is available from as low as 172 Airpoints Dollars, representing a saving of more than 94 Airpoints Dollars. Sale fares will provide even greater savings.
    Mr Norris says the new programme is designed to more fairly reward frequent flyers.
    “Under the existing programme, Airpoints are rewarded based on distance flown, rather than the fare paid. An Airpoints member currently paying around $2,400 for a discount economy return flight to London would receive 26,966 Airpoints, rewarding them with a return domestic flight (20,000 Airpoints) or nearly enough for a return trans-Tasman flight (30,000 Airpoints). However, to earn the same rewards, a frequent domestic customer would have to fly return between Auckland and Wellington 14 times at a cost of at least $3,900,” says Mr Norris.
    Under the new scheme, dollars spent on travel will be recognised ahead of distance flown. This means there will be greater earning potential on most domestic, Tasman and Pacific Island fares, but lower earning on long haul discounted economy fares.”
    Mr Norris says the enhanced Airpoints programme is a further reflection of Air New Zealand’s commitment to being innovative, efficient and nimble.
    “For an airline to survive in this fiercely competitive era of air transport, it must always strive to stay a step ahead of the competition, while at the same time delivering maximum value to customers and shareholders.
    “Today’s announcement is a further signal that Air New Zealand is committed to delivering innovative product offerings.”
     
  2. arun

    arun Member

    Sep 5, 2002
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    Sydney
    It will be interesting to see, how they will look at points to be earned on *A partners flights. Will it be still based on the fare paid?
     
  3. dajop

    dajop Senior Member

    Jul 1, 2002
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    Interesting development. This values points to 1.2c (Australian) per point. I think I'll stick to QF, where I aim to get at least 1.5-2.0c per point.
     
  4. redrat

    redrat Member

    Apr 26, 2003
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    Are you sure you're really looking at the real value?
    I've just been across to the FT site & there's not much talk there yet. I went to the Air NZ website & the FAQ's are excellent.

    Think about the fact that any seat can be purchased with the Air Dollars (AIRBUCKS as one FT'er put it). There are no blackouts, no restricted seats.
    You can use the AIRBUCKS across the *A (with a small handling fee). I'm almost in a mind to pay the $50 NZ and join. All I have to figure out is if I can wangle a txfr of my UA & SIA points. I don't even mind losing points in the changeover.
     
  5. dajop

    dajop Senior Member

    Jul 1, 2002
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    Maybe because I'm Platinum, I don't have a huge problem with award seat availability on QF, and in fact in my last Y redemption got nearly 3c/point value out of it. For the average punter though, it is probably quite a good system.
     
  6. clifford

    clifford Established Member

    Jul 6, 2004
    1,690
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    Canberra / London
    Hi All,

    Personally, I wouldn't touch this new NZ FF scheme with a barge pole. Linking benefits to the amount of money paid? Who would go along with that?

    There are much better FF schemes available (eg many of the other *Alliance airlines), where you can get full mileage credit for discount fares. Don't be fooled into thinking that awards are impossible to redeem via the *Alliance (if you think they are, please ask me and I will explain how this is not so). And furthermore, why would anyone actually PAY to join a frequent flyer scheme?

    In my opinion, this is just a ploy from a cash-strapped airline to further reduce the benefits to its frequent flyers.

    Regards,
    clifford.
     
  7. pomjim

    pomjim Intern

    Aug 1, 2004
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    Brisbane
    G'day
    Well, by my reading, it would appear that the new scheme is better re. redeeming points on other airlines.

    Example: now, 90,000 points Brisbane-Asia return. With the "airbucks" scheme, 910 return, needing 68040 airpoints.

    Or have I got it wrong?
     
  8. thadocta

    thadocta Active Member

    More disinformation from clifford.

    He seems to be ignoring the fact that most carriers base the number of points you get on the fare that you paid. I as a QF FF for example get less points on BA in N than I do in Y. I get more points in J, and even more in F.

    Having looked at the points earning table, there is nothing even remotely radical in it, it is fairly similiar to most other airlines (even his beloved Star Alliance airlines).

    What IS radical about this proposal, and which he singularly failed to address, is the award redemption function, which is, I believe, unique (and should be emulated).

    You have 347 AIRBUCKS? The fare is $NZ347? Bingo, it is yours, no stuffing around with whether there ar any redemption seats available and so on.

    QF is criticised for only having one or 2 F seats open per flight, under this scheme, someone with sufficient points could book out the entire F cabin if they so wanted. Nothing I can see would prevent this, if the seat is there you can have it.

    Bring it on to other carriers is what I say.

    (We now return you to clifford's disinformation.)

    Dave
     
  9. kristo

    kristo Intern

    Feb 23, 2003
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    New Air NZ scheme

    The only way to properly compare the current scheme with the new one is to do just that, compare.
    For example, currently it costs 30000 points to fly SYD to New Zealand, say Christchurch.
    Under the new scheme 30000 points gives you 357 airpoints dollars.
    Using Air NZ Smart Saver airfare it would cost 418 airpoints dollars return,so you would need the equivalent of approx 35000 points which is 17% more than the current scheme.
    It looks like we are being taken advantage of , doesnt it?
    Any comments?
     
  10. Kiwifruit

    Kiwifruit Junior Member

    Jun 22, 2004
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    Melbourne
    OK Kristo lets revisit your example, by my calculation at the rate of 75 airpoints per airpoint dollar, 30,000 points equates to 400 airpoint dollars, not 357 as you state (I suspect you may be using some exchange rate conversion factor though its not entirely clear from the ANZ press release how they intend to take into account disparity between the currencies). In any event the cheapest fare I have found on the ANZ website (excluding taxes which were always additional) is AU$358 which would seem to suggest in this case the status quo has at least been maintained so far as the cost of award travel is concerned.

    In my opinion the real benefit of the new scheme lies in its flexibility being able to purchase any seat on any flight using airpoint dollars rather than being limited to a few seats on each flight. Haven't attempted the conversion for other routes but attach following from ANZ press release:

    <Mr Norris says the conversion ensures that the vast majority of journeys that could have been taken by Airpoints members with their reward points can still be taken with their new Airpoints Dollars balance.

    "As well as being able to purchase any seat, 61% of flight redemptions will require fewer equivalent points to purchase the lowest fares and 15% of redemptions will require the same number of equivalent points."

    Overall, the number of Airpoints Dollars required at the lowest published fare to obtain the flight redemptions taken in the past 12 months will be an average 6% less than the equivalent number of Airpoints required under the old programme.>
     
  11. kristo

    kristo Intern

    Feb 23, 2003
    61
    0
    The rate as per the Air NZ site is 84 ff points to 1 australian airpoint dollar, so 30000 points is 357 airpoints. Smart Saver SYD to NZ is 418 ap dollars which is 17% reduction in benefits as I mentioned before.
    The "cheapest fare" is not what frequent flyers expect, SMART usage of ff points means either using them at peak times eg School Holidays or on "special" offers where you get the same flight for 20% less points.
    At least these are the ONLY times I have used my ff points.
    These are not times when the "cheapest" air fares are offered.
    I feel we should be careful not let media hype or Air NZ promotional wordings by an Air NZ exec distort or confuse the true and CORRECT mathematical calculations which I hope I have outlined.
    Any more calculations /thoughts?
     
  12. Kiwifruit

    Kiwifruit Junior Member

    Jun 22, 2004
    20
    0
    Melbourne
    I take your point Kristo, but in reality how many times have you been able to redeem your points for travel at peak times or on school holidays? Under the old scheme this was particularly frustrating if there were more than one of you wanting to travel at the same time with only limited frequent flyer seats alloctated on each flight. Under the new regime at least you have the option of using more airpoint dollars to travel at those peak times or spend less points to travel at less popular times. The flexibility and covenience offered by the new system would seem to more than compensates for any slight dilution of value in the points (which i do not concede is necessarily the case) if I am able to use the points on any flight I choose.

    Not saying you are wrong Kristo but rather pay a little more points-wise and fly when I want rather than tailor my itinerary dictated by availability of frequent flyer seats. I think its a brave move by ANZ to try something different and time will tell how sucessful it will be
     
  13. thadocta

    thadocta Active Member

    Yeah, what kiwifruit said.

    Under the new scheme, you WILL be able to redeem AirBucks for a first class seat AKL-LHR next week IF there is a free seat available and you have the points. That is probably not an option under the old scheme. And so on and so on.

    Dave
     
  14. kristo

    kristo Intern

    Feb 23, 2003
    61
    0
    My point is basically though, that Air NZ airpoints is now at least 17% less value than QANTAS and probably most other major airlines at least in this region.
    Would we be the ones to support this? I think not.
    If we did then the purpose of this forum is defeated isnt it?
    I mean if we do not learn from each other and learn not to support airlines/banks etc who reduce their benefits and try talking waffle, so to speak, to hide the truth we would not frequent this forum.
    I take the point that Air NZ's new scheme would be mean more availability but at what cost, when there are other alternatives.
     
  15. Kiwifruit

    Kiwifruit Junior Member

    Jun 22, 2004
    20
    0
    Melbourne
    Kristo, I think this is a case where we will have to agree to disagree on the benefits v detriments of the new ANZ airpoint dollars system but lets not cloud the debate with misinformation and distortion of the facts. Your assertion that "that Air NZ airpoints is now at least 17% less value than QANTAS" is quite simply incorrect. As I mentioned in my earlier posting if you use your airpoint dollars against the cheaper fares offered by ANZ the reward levels are equivalent and in some case better than those presently available although of course this varies depending on route and what specials are offered by ANZ at any given time.

    By way of your original example I have found on the ANZ website that you can presently purchase return flights SYD-CHC for AU$338 excluding taxes which even by your calculations is less than the 358 airpoint dollars you say correlates to 30,000 points presently required for such an award redemption. Of course you are going to pay more for peak time travel but these peak time flights are the very flights that it is very difficult (if not impossible) to obtain frequent flyer seats on under the present regime operated by most airline frequent flyer programmes.

    As far as I can see there is no detriment to me posed by the new scheme but there are many advantages, for instance I will be able to use airpoint dollars on any ANZ flight, in any class so long as there are seats available to be purchased. Exactly how many points you will have to expend will depend on how flexible/organised you are when purchasing your ticket. An added bonus of the new system is that you can also use airpoint dollars to purchase one way tickets which will make your one way award redemption considerably cheaper than under the present system where the number of points required for one way travel is the same as for return flights.

    I agree with you Kristo that we should be sceptical of promotional blurb put out by any organisation be it an airline, retailer or political party and we should have the impartiality and clarity of mind to critically analyse the facts for ourselves. However, lets not try and skew the debate by incorrectly stating the facts as that is a domain best left to politicians and their ilk and would defeat the purpose of this forum.
     
  16. kristo

    kristo Intern

    Feb 23, 2003
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    0
    Kiwifruit, yes agree to disagree is fine, but to revisit the actual figures one can see that the $338 Syd to NZ airfare is out of school holidays and lands in Cchurch at 11.25pm.
    My calculation of $418 is the average of all the Smart Saver airfares, keeping in mind these are generally the LOWEST airfares on the Air NZ website and have a no refund on cancellation policy as well as other restrictions, unlike ff points flights.
    The tasman fully flexi is the only fare to offer refunds and it costs around $800.
    The assumption that it is difficult or impossible to get ff seats in peak times like school holidays is partly true internationally but I personally have never had a problem as long as you plan and book in advance. But that is a different debate.
    I am not trying to bag anyone but just ask that you consider comparing apples with apples so to speak. The figures are the facts.
    In fact using the apples with apples principal the $800 fare is comparable with a ff ticket as far as refunds go, which makes the new Air NZ scheme closer to 100% less value than the current scheme or qantas ff.
     
  17. clifford

    clifford Established Member

    Jul 6, 2004
    1,690
    216
    Canberra / London
    Hi All,

    I'm sorry that the doc feels that I am spreading misinformation. I agree that I am not a particular fan of either AirNZ or Qantas (even though I am a member of their FF programs), but this is purely because I feel they are rather miserly.

    From the correspondence to date, I think the consensus (by a short head) is that the AirNZ changes are not for the better. Well, to me, it's rather academic because I don't see myself buying many AirNZ tickets in the future.

    With my "3rd world" airline points, I can redeem an economy class ticket to anywhere in NZ (or elsewhere in the Pacific for that matter) for 20,000 miles. I don't know of any other airline (* excepted) that allows this.

    Also, the earning rate on my ("3rd world") airline allows me to claim 3 such tickets with only one paid trip to Europe in discount economy. Dave may criticize me and my preferred airline, but the earning/redemption facts stand up for themselves.

    Food for thought for those who think that the Qantas/AirNZ FF Programs are anything special.

    And to show that I am reasonably (!) well balanced, I have just redeemed 2 Qantas awards, the first for two people from Canberra to Rockhampton for 40,000 miles (at what cost per mile?) and the second for one person from Sydney to Narita, also for 40,000 miles.

    So, before I am written off as a master of Mis (Dis) information (and heaven knows what else) , I'd just like to ask the more clear thinking members to keep an open mind.

    Best regards,
    clifford.
     
  18. thadocta

    thadocta Active Member

    Ahhh, the master of disinformation speaks again.

    I would like to say at the outset that I am absolutely NO fan of NZ. Firstly they are a memebr of the evil empire (aka Star Allianc), secondly what they did to Ansett was almost criminal.

    Having said that though, too much emphasis is being placed on the earning side of the program. What our Master of Disinformation is seemingly ignoring is the redemption side of the changes, namely that if a seat is available for sale then it is also available for redemption.

    EVERY FFP in the world has limits on the number of reward seats available - once they are gone you can wriggle and squirm, wih a bit of luck you might be able to get a seat released, but only if you are high status, otherwise you are out of luck.

    The changes to the NZ FFP means that ALL seats are available for redemption through Airbucks, something our Master of Disinformation seems to be ignoring.

    Sure, his redemption for a flight from CHC-SYD on the eve of a Bledislow Cup match at Homebush *might* be more expensive than what reward flights were previously, but at least he can still get a free flight which he wouldn't have been able to get under the old scheme.

    Dave
     
  19. thadocta

    thadocta Active Member

    *IF* they have reward seats available. The plane might leave half full (or half-empty, depending on your POV) but if there are no reward seats available, then your 20K points are worth jack.

    At least under the new scheme you can actually purchase any seat which is going at the currently prevailing fare.

    Dave
     
  20. oz_mark

    oz_mark Enthusiast

    Jun 30, 2002
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    THe problem for me is the non-flier fee which is coming in. Haven't used AirNZ of late, although other star alliance carriers I have. Might have to reconsider which program I am in,
     
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