Points plus pay - Air New Zealand.

7 replies

lind26

Member since 24 Apr 2014

Total posts 230

Points plus pay - Air New Zealand. How come they don't do that?

wilsoni Banned

wilsoni Banned

Qantas - Qantas Frequent Flyer

Member since 28 Sep 2011

Total posts 302

There seems to be no reason why they couldn't. Each Airpoint is worth one dollar, so how hard could it be to add real dollars to virtual ones if required? So the answer must be: because they want you to accumulate, not redeem.

kimshep

Qantas - Qantas Frequent Flyer

Member since 11 Oct 2014

Total posts 336

You hit the nail on the head:

1 NZ Airpoint - $1

1 QF FF point - approx $0.03 to buy / variable value to redeem.

Variable can be anything from $0.006 thru to maybe $0.05 depending on redemption type (shop, wine, QC membership, flights, upgrades etc).

ANZ Airpoints is designed to simply get you to fly and is not as 'fleshed out' as competing programs.

domesticgoddess

NZ Elite

Member since 03 Jul 2014

Total posts 65

You can (sort of),

You can top up your Airpoints account (buying 1 Airpoint dollar for 1 dollar) if you have an Airpoints Credit Card or a OneSmart account (similar to Qantas Cash).

Trying to encourage people to sign-up for one of those revenue earners, basically.

wilsoni Banned

wilsoni Banned

Qantas - Qantas Frequent Flyer

Member since 28 Sep 2011

Total posts 302

The credit card is available only with KiwiBank. There's a $5 fee per top up using either the credit or the OneSmart. The latter has no load fee, very generous.

kimshep

Qantas - Qantas Frequent Flyer

Member since 11 Oct 2014

Total posts 336

Air New Zealand = 'Their circus, their monkey'.

Not to appear too cynical but airline FF programs are a dime a dozen and most airlines have them. They are not always universally run in the same identical manner to say QFF or VA Velocity.

Think about it this way: Air New Zealand's program is run primarily for New Zealanders and it must cater to its home market. Like QFF, they will have 'high flyers' taking lots of overseas trip, the 'middle' ground making a few trips across the ditch, the purely 'domestic' travellers accumulating a few miles every so often .. and those who join that earn no points at all (you'd be surprised how many of these exist - even in QFF. That means - from the top down, most accumulated points, less points, even lower points and no points. However, the equation is that the first group is the smallest .. and the following groups increase mathematically at a rapid rate.

Given that NZ is a small geographic country, many New Zealanders don't have the requirement or need to make  domestic trips such as SYD-PER-SYD and may just be doing the occassional AKL-CHC or Auckland-Napier return. These are not costly or even sizeable distance fares and in terms of redemption would be sort of pointless (excuse the pun) for both the airline and it's customers. Further, if 'Points plus Pay' were offered, the large bulk of lower non-tiered members would be zero-ing out their account base on a regular basis. The trick for FF programs is to keep members 'engaged' .. and having members zero a balance out lessens the impact or chaining of 'loyalty' .. and keeping members on a short but hopeful string.

Whilst Air New Zealand has a surprisingly large global network (for its size), the greater majority of its Airpoints membership hold small balances in their accounts, just like most FF programs. Think of the 80-20 rule. 20% of your membership have meaningful balances and redeem awards, whilst 80% live in hope.

Indeed, given the success of FF programs globally, I would love to see some metrics  from the world's top 50 airlines, indicating the number of members .. and their average points balance, as a number, possibly broken down by tiers. Whilst we have some idea of the number of members (ie. QF has 11.5+m - virtually half the population of Australia and AA has some 80m FF) I lament that we'll probably never know the 'average points' balance for members and certainly not by tiers - irrespective of the fact that a) we are dealing with an effective digital currency and b) these programs are often cornerstone points of profitability. Commercial in confidence LOL.

lind26

Member since 24 Apr 2014

Total posts 230

Thanks everyone, money is money at the end of the day and I would have thought that paying in addition to points would be a no brainer

kimshep

Qantas - Qantas Frequent Flyer

Member since 11 Oct 2014

Total posts 336

I can totally understand where you're coming from lind26. One would not think it is so complex.

However. loyalty strategies depend on a lot of 'emotion' on the passenger side: the need to be recognised, the need to be pampered, the ability to 'save', the entry into lounges, the value of reward, the need to be part of something etc. And all this must be considered by the airline in an economic framework which rewards the carrier in dollars, but also in 'repeat' business and on-going goodwill.

For quite a number of years, Air New Zealand ran it's loyalty program along the standard Star Alliance guidelines, which probably disadvantaged their NZ domestic flyers (short, cheap sectors, low points) more than most Star carriers in the Americas, Europe and Asia.

It obviously didn't work for Air New Zealand and they transitioned to the 'Airpoints' model, which was unique in Star. I'm not suggesting there is any failure or outstanding success for NZ, but it seems to work for them.

Tying your program 1-1 where points equal a paid fare is an interesting strategy. At best, your high-flyers benefit very well. At worst, it can make your program appear as 'uncompetitive' for lower tier or non-tiered passengers. Perhaps the NZ strategy is to concentrate more directly on their higher tier passengers? With a small population and a relatively small FF base to draw on, it wouldn't surprise me. QF and VA on the other hand have to please a much larger and more diverse base.

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