Governments who do not like frequent flyers

chornedsnorkack · Post by **chornedsnorkack** » 28 Nov 2005, 09:47

Many governments dislike frequent flyers. Some demand that government employees must turn over their miles/points, although the airlines do not want to allow this. Others demand that people should pay taxes on frequent flyer points.

Norway and Sweden have forbidden awarding any points on domestic flights. But SAS still has Eurobonus and is allowed to give points on flights between Norway and Sweden, or to third countries.

What other governments forbid frequent flyer programs?

Also, the bilateral air services agreements can specify equipment, and also prices. Does any country make it a condition of air services agreements that miles/points on the arriving and originating flights should be banned?

regi · Post by **regi** » 28 Nov 2005, 10:01

I was unaware about this very strange government behaviour. So the state interferes with who gets a discount? Didn't know that Lenin had so many followers in Scandinavia.

Bowlie · Post by **Bowlie** » 28 Nov 2005, 11:08

regi wrote:I was unaware about this very strange government behaviour. So the state interferes with who gets a discount? Didn't know that Lenin had so many followers in Scandinavia.

According to them it is a competition issue. Other (domestic only, short-haul regional) airlines apparently find it difficult to compete with SK since they cannot offer equivalent rewards as SK.

IMHO FF programs are great for some passengers, but not good for competition and not good for companies paying for the tickets.

For example between CPH and LHR to who can SK charge a higher price? One of their FFs or one of BA's?

regi · Post by **regi** » 28 Nov 2005, 17:22

A different approach: calling airmiles a bad thing for competition and the paying companies. That means that you and /or the law maker consider the passenger automatically a abuser of the system. In the same way, cars should be unable to drive faster than the maximum speed.
From a passengers point of view, airmiles is just a matter of competition. And I don't think that companies regard airmiles as something bad. They have it in hand - if they do the effort to control and apply company rules.
Personally, I think that a government should not interfere with this .

chornedsnorkack · Post by **chornedsnorkack** » 29 Nov 2005, 10:15

regi wrote:A different approach: calling airmiles a bad thing for competition and the paying companies. That means that you and /or the law maker consider the passenger automatically a abuser of the system. In the same way, cars should be unable to drive faster than the maximum speed.

If you pay for flight and also get airmiles towards part of a free flight then you are paying over and above what just the flight costs.

Cars have a legitimate reason to be able to drive faster than the maximum speed: if they cannot drive faster than the maximum then they accelerate slowly near the maximum speed and therefore take long to overtake. Is there a legitimate reason for airmiles?

Advisor · Post by **Advisor** » 29 Nov 2005, 11:31

This is strange. But is it not against consumer interests to do so.

earthman · Post by **earthman** » 29 Nov 2005, 13:25

chornedsnorkack wrote:
regi wrote:A different approach: calling airmiles a bad thing for competition and the paying companies. That means that you and /or the law maker consider the passenger automatically a abuser of the system. In the same way, cars should be unable to drive faster than the maximum speed.
If you pay for flight and also get airmiles towards part of a free flight then you are paying over and above what just the flight costs.

Cars have a legitimate reason to be able to drive faster than the maximum speed: if they cannot drive faster than the maximum then they accelerate slowly near the maximum speed and therefore take long to overtake. Is there a legitimate reason for airmiles?

You may want to exceed the maximum speed at some times, for example to escape from some dangerous situation where stopping would not help you. Also you may want to drive on the German autobahn every once in a while.

Customer loyalty. You want to make sure people fly with your airline, not with the competition. It also makes it easier to build a customer profile, especially if you can also earn the miles by buying other things besides flights. This provides valuable data for direct marketing, and a better insight into consumer behaviour, which could lead to products which are more suited to the wishes of the market. This all can lead to a greater profit for the airline.

Of course for consumers it could be nicer to just have slightly lower ticket prices instead of the whole airmiles system.

Regional airways could just enter an agreement with some other large airline (with which they don't compete directly) to be able to offer more interesting rewards.

One possibly bad side-effect is that it does reduce competition. If you end up with only a few alliances, this can result in the alliances dividing up the market, and agreeing not to compete. Then they can charge more for their tickets, and not bother with trying to offer good service.

regi · Post by **regi** » 29 Nov 2005, 14:41

chornedsnorkack
I like it to be member of different miles programs. I receive now and then the new programs, some updates.
As an example: I am planning my next trip to Johannesburg. And I like to know which benefits I would get if I use my program with Emirates, instead of BA. If i pay an economy ticket, I like it to use the business lounge. In communist Scandinavia this is not allowed.
And the family points. Why not? Once a year you fly with the family , and their miles come to 1 person. What is wrong about that? The other passengers or my boss don't pay for that. I have paid for it.

chornedsnorkack · Post by **chornedsnorkack** » 29 Nov 2005, 15:42

regi wrote:chornedsnorkack
If i pay an economy ticket, I like it to use the business lounge. In communist Scandinavia this is not allowed.

There are a number of ways how lounge access can be gained. Some airlines give it to frequent flyers of certain status. Others give lounge access with same-day departing tickets of certain class. Yet other possibilities include paid lounge memberships/passes, and paying for access every time.

If the access to business lounge is given to frequent flyers, then the frequent flyers who like to use a business lounge get a benefit which is paid for from the ticket prices of all passengers - including those who fly often but do not care about lounge access, and those who would gladly like to pay to get lounge access, but do not fly often enough with that airline to reach the appropriate status level.

I believe that in the US, the lounges were invented for frequent flyers - BEFORE there were any frequent flyer programs, before deregulation. But then infrequent flyers complained - and got the demand that airlines should sell lounge access to all who will pay for membership, irrespective of how much they fly.

MX727 · Post by **MX727** » 02 Dec 2005, 22:59

In Mexico you can get air tickets with your flying miles but you still got to pay the taxes and aiport fees, so you never really get a free ride.

Bowlie · Post by **Bowlie** » 03 Dec 2005, 08:48

And with BA you pay all the charges PLUS the fuel surcharges. That should be part of the price.

lastrow · Post by **lastrow** » 03 Dec 2005, 10:09

... coming back to the government question: I am employee of a sort of official authority (a German university). For paid travel I need to explicitly sign that I either haven't participated in a bonus programme or that I promise to spend the earned miles for upcoming travels.

Since we have also a contracted business travel agency they offer me the cheapest flight anyway regardless my airline preference. The only way to enhance that is to choose specific departure/arrival dates due to personal reasons which would rule out certain airlines. also my employer understands that I do not choose Aeroflot to go to Asia.

For example, once I had the offers for a flight to HK was EUR 1000 something with AF and others and EUR 650 with Swiss. So the strategy is clear: choosing always the cheapest regardless the last time to Asia was with AF. I do not know if this is the best to save money but it is the way German travel reimbursement guidelines work. And it keeps me away from frequent flyer benefits. My university has about 9000 employees (and from that about 3000 scientific personnel).

and ... about miles or not to make a ticket cheaper: I would expect that the miles thing helps airlines to attract costumers to stay at the same airline or alliance. If you consider how much you do pay to buy extra miles you see the misalignment. I would expect that behind the miles stuff there is a lot of mathematics about how valuable a costumer is to keep not for how much a ticket will be sold more to offer these. Moreover, consider two points:

- people love to collect. It is a sort of game that automatically turns costumers on.
- most benefits for miles are also very restricted or cheap to give. Consider an upgrade to Business Class - if the seat is free anyway, is it really expensive for the offering airline?

just my two cents.

-lr.

chornedsnorkack · Post by **chornedsnorkack** » 03 Dec 2005, 13:08

lastrow wrote:... coming back to the government question: I am employee of a sort of official authority (a German university). For paid travel I need to explicitly sign that I either haven't participated in a bonus programme or that I promise to spend the earned miles for upcoming travels.

lastrow wrote:
- most benefits for miles are also very restricted or cheap to give. Consider an upgrade to Business Class - if the seat is free anyway, is it really expensive for the offering airline?

-

Can you get it? I mean, are you allowed to upgrade, or is it the rule that if you cannot buy paid business ticked with university money then you cannot upgrade on university miles, so you are required to use miles exclusively for booked award trips which you otherwise would have had to fly on a ticket paid in money by university?

lastrow · Post by **lastrow** » 03 Dec 2005, 16:41

No I cannot. I haven't heard from anyone upgrading to business when flying for our employer so far. But, who would tell me in case? I was just referring to that spending 40.000 miles to upgrade to business on a trip between US and Europe does not seem a big deal for the offering airlines. However, we wouldn't be allowed to do so, but rather book another ticket (within Europe) from that.

For travel reimbursement the BRKG (Bundesreisekostengesetz) applies, and this one basically reimburses only economy fare or even 2. class train tickets if possible. I once have had a discussion, because the travel reimbursement asked me to take a train to Paris instead of booking a flight. it was at the times (like three years ago) where only AF and LH served CGD from TXL and a regular ticket was about EUR 800,-

For booking directly business: you are allowed book such an arrangement if you do not have other choices but must attend to something. Then you must explain the reason in written form.

This can be your friend in some cases: I have heard from collegues that they defer the booking of the ticket for overseas travel until only buisness class seats are left (like ten days before, going to Chicago). However, this works only if you have a boss/supervisor does not care about where the money is spent or if more is available than you will likely spend. because apart from the BRKG, the money is taken from your budget, and it's the question if you like to spend your budget with one trip in business or just have two travels in economy.

-lr.