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Miles & More, the frequent flyer scheme of Lufthansa, Austrian, SWISS, etc., announced earlier this week that award mileage earning will become revenue based on 12 March 2018. The following will only apply if you credit your flights to Miles & More.
Here’s a summary of the changes taken from the Miles & More website:
Let’s take a closer look at the points above.
Only award miles, i.e. those miles you can redeem for award bookings, will become revenue based. Nothing changes as far as status miles and elite qualification are concerned.
The new revenue based award miles earning rate will apply to all tickets booked via a Lufthansa Group booking channel. Tickets not issued by a Lufthansa Group airline will continue to earn miles according to the current system (that is, booking class and distance):
“The criterion for this is the booking channel. The new system applies to all tickets sold by Lufthansa, SWISS, Austrian Airlines, Eurowings or Brussels Airlines. If you book via a direct sales channel of Lufthansa, SWISS, Austrian Airlines, Eurowings or Brussels Airlines, i.e. the website, miles will be awarded based on the new system. If you book via a third-party sales channel, i.e. a travel agent or online travel agency, you will be able to tell by the ticket number whether your award miles will be calculated according to the new system. If the first three digits of your ticket number are 220 (Lufthansa), 724 (SWISS), 257 (Austrian Airlines) or 082 (Brussels Airlines) or Eurowings, the new system applies to your flight – if not, the award miles are calculated according to the old system. The one exception are tickets purchased through a tour operator. Here award miles are allocated according to the booking class, irrespective of the ticket number. In rare cases where no fare information is available, Miles & More reserves the right to continue to award miles according to the booking-class-based system.”
So depending on the cost of your ticket, you may actually be better off booking via a third party site to continue earning miles according to the current system. More on that in a minute.
Under the new revenue-based earning system, your award miles will be determined based on the ticket price in euros. For tickets purchased in a currency other than euros, Miles & More will convert your eligible spend into euros. Your eligible spend essentially means ticket price and surcharges levied by the airlines; taxes and airport surcharges do not qualify. You earning rate will also depend on whether or not you hold elite states with Miles & More:
- If you hold no status with Miles & More, your eligible spend is multiplied by 4.
- For those with elite status, the multiplying factor is 5 or 6, depending on the operating airline:
“If the flight is operated by Lufthansa, SWISS, Austrian Airlines, United Airlines, Air Canada, LOT Polish Airlines, Croatia Airlines, Adria Airways or Air Dolomiti, then the multiplying factor is 6; for Brussels Airlines and Eurowings and all other Miles & More partner airlines, the factor is 5.”
Let’s crunch some numbers here. Who benefits from this and who will be worse off?
Let’s assume you book the cheapest available economy fare for the following trip to Hong Kong:
Under the current earning style system, a quick look at the mileage calculator shows that non-elites will receive a total of 4266 award miles: 1422 miles (booking class K) for the outbound, and 2844 miles (booking class S) for the inbound segment. Elites will receive a total of 7110 award miles: 2844 miles for the outbound, and 4266 miles for the inbound.
Under the new revenue based system, only the spend highlighted in red is eligible for mileage accrual:
So out of the total ticket cost of 833,43 EUR, you will only earn miles for 713 EUR. Non-elites will thus earn 2852 award miles; elites will earn 4278 miles. You will therefore be worse off. In this case, you should consider booking via a third party, making sure your ticket will not be issued by a Lufthansa Group airline, so that the old rules will apply to your mileage earning.
There are circumstances where you will be better off. Obviously these only apply to really expensive tickets, and some short-haul flights. Consider the following dummy booking for random flights in April:
This ticket is currently selling for a whopping 314 EUR — hand baggage only! All hand baggage only flights, book into the lowest economy bucket L:
Even if you booked a really expensive flexible ticket, it would only book into the lowest economy fare bucket! This means that you would only be receiving a ridiculously meagre 250 award miles for the round trip if you have no status, or 312 award miles if you have elite status.
Under the new revenue-based system, you’d be better off:
Again, I’ve highlighted your eligible spend in red. A non-status holder would thus earn 980 miles for the round trip (245 EUR x4), whilst a Miles & More elite would bag 1470 award miles (245 EUR x6).
The move towards revenue-based mileage earning is undoubtedly a devaluation for those booking cheap promo fares and error fares. Those paying more for their tickets will earn more award miles. It is a way for Lufthansa to reward those on expensive tickets, whilst rewarding those on cheap fares with less miles. Perhaps this was the easiest way for Miles & More to devalue the scheme without touching status qualification nor the award chart. And perhaps this is only the beginning, so we are left wondering if revenue-based status qualification will follow further down the line?
Given my travel pattern, I will now definitely consider crediting Lufthansa Group flights to another Star Alliance programme, whilst continuing to collect Miles & More points through 3rd party channel bookings, credit card spend and online shopping. Yes, I am one of those that books the cheapest ticket 😀
Let me know in the comments what you make of this.