Revenue-based loyalty? Ja! Miles and More is next

Miles and More is the latest loyalty scheme to announce a shift to revenue-based points earning. The program – including Lufthansa, Austrian, Brussels Airlines, Swiss, LOT, Adria & Croatia Airlines – is not making the new earning rules particularly easy, taking away any credibility to a marketing claim that the move is to simplify the program. Points earned will vary by which airline issues the ticket, which airline operates the flight and elite status.

The basic earn rate will be four points per euro spend on base fare and fees (i.e. fuel surcharge/YQ/YR). Airport and governments taxes and fees do not earn points. This applies only to tickets issued on Lufthansa Group airlines’ stock: 220 (Lufthansa), 724 (SWISS), 257 (Austrian Airlines), 082 (Brussels Airlines) or Eurowings.

Travelers with elite status can earn a 25-50% bonus on flights operated by some airlines. Segments flown on Lufthansa, SWISS, Austrian Airlines, United Airlines, Air Canada, LOT Polish Airlines, Croatia Airlines, Adria Airlines or Air Dolomiti earn 6 points per euro. Eurowings and Brussels Airlines-operated flights earn 5 points per euro. The 50% bonus on most Joint Venture partners is actually an increase from the current 25% those elites earn.

Fortunately, the new rules apply only to tickets issued after 12 March 2018. Tickets purchased prior to that (including existing bookings) will earn under the older rules. Also, earning towards elite status does not change.

Somewhat interestingly, there are a few winners with the new scheme at the low end of the spend scale. Under the current program rules a K or L fare within Europe would earn only 125 points per segment. A €150 trip from Budapest to Frankfurt booked into K would earn 250 points in the old scheme. The new program should net just over 300 points for that ticket. Yes, nearly 50% of the fare is taxes and fees but the €77 in fare and YQ/YR all counts towards earning at a 4x multiplier.

Beyond that, the game of which airline to book a ticket through will continue. For Transatlantic flights United, Air Canada and the LH Group all generally have the same prices on the same flights thanks to their joint venture and anti-trust immunity (JV/ATI). That means a ticket should cost the same whether issued on Lufthansa or United stock. Customers will need to evaluate whether the fare or distance should drive the booking decision with each transaction. A $2500 discounted return business class trip from New York to Frankfurt would earn roughly 8,000 points in Miles and More if booked on LH stock under the new scheme. If booked on United stock and credited to United’s MileagePlus program that would be roughly 12,500 points earned (5x, based on dollars rather than euros). Under the distance-based scheme that “P” fare earned 7700 points in either program.

A $950 L fare from New York to Frankfurt would earn 25% credit under the distance-based program, approximately 1900 miles return. Under the revenue-based program that trip earns roughly 2500 M&M points. If crediting to United that same fare would earn roughly 3800 points under both the revenue-based (5x$$) scheme and distance-based (50%) rules.

Read more: Flying Blue goes Revenue Based

So, which earning method is best? Figuring that out could take almost as much time as the trip itself. At least in this case, much like with Flying Blue’s recent announcement, the lower priced tickets were already heavily discounted in earning such that the programs were pseudo-revenue based anyways.