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Thou Shalt Not Devalutate Your FF Miles, Lufthansa  
User currently offlinevfw614 From Germany, joined Dec 2001, 4062 posts, RR: 5
Posted (2 years 9 months 2 weeks 2 days 17 hours ago) and read 9096 times:

A German court has ruled that it is unlawful for an airline to increase the amount of miles needed for a reward flight at short notice as this effectively devaluates a frequent flyer's miles. In the case in question, a German professor with 800.000 miles in his account sued after Lufthansa had increased the miles required for award flights at short notice without a reasonable transition period. The frequent flyer argued that, based on his travelling habits, the change had devaluated his account by 40 per cent. The court held that the change was unlawful and that Lufthansa must guarantee a reasonable transition period that allows customers to spend miles already earned under the conditions applicable for reward flights when the miles were earned (effectively forcing Lufthansa to maintain two or more separate accounts for each customer).

German FTD has already calculated that the ruling could cost Lufthansa close to 1bn EUR if upheld at the appeals stage as the changes that came into effect in early 2011 saved Lufthansa the equivalent of 320.000 business-class TATL tickets.

Interesting development - apparently a law firm is already soliciting disgruntled frequent flyers. The funny thing is that the guy who won the case offered Lufthansa a settlement well into the litigation, but Lufthansa reacted in its usual blasé way of treating customers, arguing that it was completely up to them how the FFP is designed.

Have there been similar cases in other jurisdictions? This could cost airlines billions.....

soure (only in German): http://www.ftd.de/unternehmen/handel...sieg-gegen-lufthansa/70009690.html




lost the from Germany to Asia from 210.000 to 240.000 miles. The FF

42 replies: All unread, showing first 25:
 
User currently offlineikramerica From United States of America, joined May 2005, 21590 posts, RR: 59
Reply 1, posted (2 years 9 months 2 weeks 2 days 16 hours ago) and read 8967 times:

1. AA lost a similar case in the 80s. I still have a page I patched together with the old awards somewhere.

2. This ruling doesn't cost LH €1b. That's a false statement. It will trim into planned cost cutting, but claiming that failure to implement a change is a cost is government accounting, not real accounting.



Of all the things to worry about... the Wookie has no pants.
User currently offlineBirdwatching From Germany, joined Sep 2003, 3836 posts, RR: 51
Reply 2, posted (2 years 9 months 2 weeks 2 days 16 hours ago) and read 8884 times:

Well, to be honest Lufthansa's Miles&More program can be quite annoying in this respect, so I kind of sympathize with the person. The award ticket prices on LH are higher than on most other airlines, and they have gone up several times in the recent past. Plus the miles are not worth as much to begin with, as you still have to pay massive taxes and fees and fuel surcharge and what not, amounting to about half of the ticket price.
I recently booked a transpacific on AA, and I paid about $50 in addition to the miles.
On LH, a transatlantic one way comes at more than 200 EUR on top of the miles you shell out.

Soren   



All the things you probably hate about travelling are warm reminders that I'm home
User currently offlineSulley From United States of America, joined Jan 2010, 539 posts, RR: 4
Reply 3, posted (2 years 9 months 2 weeks 2 days 15 hours ago) and read 8755 times:

Elites and FF programs are getting out of control. The airlines created a monster.


In thrust we trust!
User currently offlinesteve6666 From United Kingdom, joined Sep 2003, 429 posts, RR: 0
Reply 4, posted (2 years 9 months 2 weeks 2 days 13 hours ago) and read 8524 times:

Quoting ikramerica (Reply 1):
2. This ruling doesn't cost LH €1b. That's a false statement. It will trim into planned cost cutting, but claiming that failure to implement a change is a cost is government accounting, not real accounting.

It will increase the size of the provision on the balance sheet for the liability in respect of FF benefits accrued, so there will be a charge in the income statement, even if the cash costs only come through later.



eu nasci ha dez mil anos atras, e nao tem nada nesse mundo que eu nao saiba demais
User currently offlineikramerica From United States of America, joined May 2005, 21590 posts, RR: 59
Reply 5, posted (2 years 9 months 2 weeks 2 days 13 hours ago) and read 8418 times:

Quoting steve6666 (Reply 4):
It will increase the size of the provision on the balance sheet for the liability in respect of FF benefits accrued, so there will be a charge in the income statement, even if the cash costs only come through later.

No, it fails to DECREASE the size, but doesn't increase it. Some been counter sold "if we devalue the ff miles by 20%, we can reduce our liability" but that liability exists until those miles are actually successfully devalued.

It's semantics, but the miles were accrued based on the old values, not the new, so there isn't a cost, but a lost savings.

If I contract to buy something for $100, then later negotiate it down to $80, only to have that deal fall through, I'm still contracted at $100 and have lost nothing.



Of all the things to worry about... the Wookie has no pants.
User currently offlineLOWS From Austria, joined Oct 2011, 1192 posts, RR: 1
Reply 6, posted (2 years 9 months 2 weeks 2 days 12 hours ago) and read 8351 times:

Quoting Sulley (Reply 3):
Elites and FF programs are getting out of control. The airlines created a monster.

Terribly correct. I'd be happy to use my miles in the LH World Shop, but not if LH is going to require a 90k Mile Minimum.

I've long given up hope of ever using them for a ticket. Especially when I'm still paying 100€+ for the taxes, fees, fuel, etc.

I was looking at using miles for an upcoming trip to AMS. LH wanted 250€ (or another 15k Miles) for the taxes! I eventually just ended up paying 180€ and not using miles.


User currently offlineSemaex From Germany, joined Nov 2009, 833 posts, RR: 2
Reply 7, posted (2 years 9 months 2 weeks 2 days 10 hours ago) and read 8114 times:

Quoting LOWS (Reply 6):
Terribly correct. I'd be happy to use my miles in the LH World Shop, but not if LH is going to require a 90k Mile Minimum.

Exactly. The few LH miles I have I spend at the World Shop. Bought a Cargo MD-11 model the other day, was worth it, especially since the miles are lost by the end of 24 months or so anyways. I wouldn't use them for travelling, no way. It's way too tricky.



// You know you're an aviation enthusiast when you look at your neighbour's cars and think about fleet commonality.
User currently offlineiainbhx From United Kingdom, joined Dec 2008, 242 posts, RR: 0
Reply 8, posted (2 years 9 months 2 weeks 2 days 10 hours ago) and read 7839 times:

I have a substantial number of LH miles and I must admit I'm interested in this judgement, however, I suspect that LH will just clamp down on the inventory further. The only useful way to spend them is either on upgrades or on premium classes and it can be quite hard to get either to open up inventory. I'm wait listed for an upgrade in January 2013!


iainbhx
User currently offlinespeedbird217 From United Kingdom, joined Feb 2012, 341 posts, RR: 0
Reply 9, posted (2 years 9 months 2 weeks 2 days 6 hours ago) and read 6638 times:

My own experience with the Miles&More program from LH:
Flying on around 10 inner-German LH-flights in 2 consecutive years and owning the Miles&More Credit Card that gives you 1-2 Miles per Euro of turnover with the card, I barely have a free flight as of now.

I flew one leg across the Atlantic and back last year with British Airways and already have a free return flight from Germany to the UK. LH would give me a towel or something like that for my miles.
Something just doesn't add up here...


User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
Reply 10, posted (2 years 9 months 2 weeks 2 days 6 hours ago) and read 6570 times:

Apologies - my browser appears to be malfunctioing.

I just read section 4.4 of the terms and conditions. Does it not protect LH in this case?


User currently offlineLXa332 From United States of America, joined Jan 2012, 49 posts, RR: 0
Reply 11, posted (2 years 9 months 2 weeks 2 days 5 hours ago) and read 6373 times:

I just got an email with my current M&M account balance. Maybe they were forced to do this because of the ruling?

User currently offlineVC10er From United States of America, joined Feb 2007, 2989 posts, RR: 13
Reply 12, posted (2 years 9 months 2 weeks 2 days 3 hours ago) and read 5937 times:
Support Airliners.net - become a First Class Member!

What does it take to make HON Circle? A friend of mine who is a Lufty Loyalist does 2 Asia flights a month in Biz or First (paid) and TATL. Along with a once a month paid biz class within the EU- and he didn't make HON. Again, that's over 24 full fare long haul and very long haul flights with about 20 short hauls.

What more can a human do? Commute to Bangkok from FRA 50 weeks a year?



The world is missing love, let's use our flights to spread it!
User currently offlineUnflug From Germany, joined Jan 2012, 542 posts, RR: 2
Reply 13, posted (2 years 9 months 2 weeks 2 days 2 hours ago) and read 5757 times:

Quoting Birdwatching (Reply 2):
Well, to be honest Lufthansa's Miles&More program can be quite annoying in this respect, so I kind of sympathize with the person. The award ticket prices on LH are higher than on most other airlines, and they have gone up several times in the recent past. Plus the miles are not worth as much to begin with, as you still have to pay massive taxes and fees and fuel surcharge and what not, amounting to about half of the ticket price.
I recently booked a transpacific on AA, and I paid about $50 in addition to the miles.
On LH, a transatlantic one way comes at more than 200 EUR on top of the miles you shell out.

True - just paid 1.600 € in taxes and fees for 4 tickets to the US, a ripoff...

Quoting VC10er (Reply 13):
What does it take to make HON Circle? A friend of mine who is a Lufty Loyalist does 2 Asia flights a month in Biz or First (paid) and TATL. Along with a once a month paid biz class within the EU- and he didn't make HON. Again, that's over 24 full fare long haul and very long haul flights with about 20 short hauls.

He needs 600k miles in 2 years. If he was flying LH as much as you say he would be HON after 2 years.


User currently offlinewdleiser From United States of America, joined Apr 2004, 962 posts, RR: 3
Reply 14, posted (2 years 9 months 2 weeks 2 days 1 hour ago) and read 5650 times:

Quoting VC10er (Reply 13):

2 years of 250000 miles a year I believe


User currently offlineiainbhx From United Kingdom, joined Dec 2008, 242 posts, RR: 0
Reply 15, posted (2 years 9 months 2 weeks 1 day 23 hours ago) and read 5362 times:

Quoting LXa332 (Reply 12):
I just got an email with my current M&M account balance. Maybe they were forced to do this because of the ruling?

No, that was roughly on schedule.

Quoting VC10er (Reply 13):
What does it take to make HON Circle?

300k status miles a year on LH group airlines only for two years.



iainbhx
User currently offlinevfw614 From Germany, joined Dec 2001, 4062 posts, RR: 5
Reply 16, posted (2 years 9 months 2 weeks 1 day 21 hours ago) and read 5024 times:

Quoting ElPistolero (Reply 11):
I just read section 4.4 of the terms and conditions. Does it not protect LH in this case?

The ruling has not been published yet, but I guess the point is that the t&c are unlawful. What airlines put into their t&c is not necessarily lawful. Most customers, however, believe it is akin to an act of parliament...

Quoting VC10er (Reply 13):
What does it take to make HON Circle? A friend of mine who is a Lufty Loyalist does 2 Asia flights a month in Biz or First (paid) and TATL. Along with a once a month paid biz class within the EU- and he didn't make HON. Again, that's over 24 full fare long haul and very long haul flights with about 20 short hauls.

Which pretty much proves Lufthansa's point - why is he still travelling with them? If he has no other options / like the product no matter whatm why should they waste money on him making hom HIM?


User currently offlinehanuise From France, joined Jun 2005, 22 posts, RR: 0
Reply 17, posted (2 years 9 months 2 weeks 1 day 20 hours ago) and read 4804 times:

I am afraid that there is a general trend in FF program to decrease their value and interest for most users. AF/KL is not better than LH in that respect.
As an example, I recently searched for a flight from southern France (MRS or NCE) to Germany (CGN or DUS). What I found for direct flights is instructing. The choice is between lower miles and higher taxes or higher miles and lower taxes. It can even be cheaper to buy a ticket than use miles.
MRS-DUS (AF):
20 000 miles + 130 € taxes or ticket at 99 €
NCE-CGN (4U)
30 000 miles + 47 € taxes or ticket at 164 €

[Edited 2012-03-17 03:32:41]

[Edited 2012-03-17 03:33:39]

User currently offliner2rho From Germany, joined Feb 2007, 2776 posts, RR: 1
Reply 18, posted (2 years 9 months 2 weeks 1 day 20 hours ago) and read 4754 times:

Devaluating miles is a general tendency at least in the EU, not just with LH. Although I have to say that I really struggle to get any flight with LH whereas I can still manage to get something from AF/KL every now and then. With airlines slapping the ever-increasing fuel surcharge along with many others into the "fees" section, the "fare" part of the ticket, which is what you save with FF miles, becomes increasingly insignificant. And yes, I have had several cases where buying a ticket with another airline was cheaper than using my miles. FF programs nowadays are a joke, which is why I always choose my flights by convenience, not loyalty, and consider any miles I get as icing on the cake.

User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
Reply 19, posted (2 years 9 months 2 weeks 1 day 16 hours ago) and read 4211 times:

Quoting vfw614 (Reply 17):
The ruling has not been published yet, but I guess the point is that the t&c are unlawful. What airlines put into their t&c is not necessarily lawful. Most customers, however, believe it is akin to an act of parliament...

I don't think it is an act of parliament, but by accepting the T and C, the customer is entering into an agreement with LH on the terms that LH has set. Once they've entered the agreement, it raises questions about how much they can claim they have been mislead when everything has been put out very clearly in the agreement.


User currently onlinePanHAM From Germany, joined May 2005, 9755 posts, RR: 31
Reply 20, posted (2 years 9 months 2 weeks 1 day 16 hours ago) and read 4179 times:

Simple rule is, miles are value for money only if used on business class long distance flights, or on short notice European flights which sell in the region of almost € 1000, in that case spending miles makes sense.

If 99€ tickets are available, better, if tickets under €250,00 are available better pay the regular fare.



Es saugt und blaest der Heinzelmann wo Mutti sonst nur blasen kann. Frueher war mehr Lametta.
User currently offlineRunzel From Australia, joined Dec 2011, 27 posts, RR: 0
Reply 21, posted (2 years 9 months 2 weeks 1 day 16 hours ago) and read 4123 times:

I'll not bother relating my direct experiences - other posters have more than covered all that is necessary. At the root of the pronlem rests the enormous number of FF miles ever-looming on the LH horizon. Which LH has known about and internally talked about for years. I can't blame LH for trying to weasel out of honouring them.

Referring to Speedbird (Post 9) and VC10ER (Post 13) specifically, think about the following if you please... .

It is a long-established fact that the LH M&M programme is a poor programme for the FF. See this thread and other historical comment.

Providing that the individual traveller can meet any intrinsic requirement i.e., a handfull of sectors/maybe 10K miles per year, to qualify for full benefits with another carrier, this can be alleviated. No matter the country of residence there is no restriction of which I have heard precluding one from joining - we are talking about LH - another Star Alliance carrier's FF programme. Miles can be earned on LH and other Star member carriers. Igf as it seems apparent that redemption seats on LH are a near impossibility, for vacations and non-time-critical travel awards are probably more easily on the other Star carriers that service German and other ports.

I live in Australia and since the murder of AN have been faced with poor choices of local programmes. QF & NZ are not good, DJ (by any name remains unspeakable). Ergo I have for the last 10+ years maintained membership of a North American based carrier member of Star Alliance.

Ha! More than one way to skin a cat.

runzel


User currently offlinevfw614 From Germany, joined Dec 2001, 4062 posts, RR: 5
Reply 22, posted (2 years 9 months 2 weeks 1 day 15 hours ago) and read 4092 times:

Quoting ElPistolero (Reply 20):
don't think it is an act of parliament, but by accepting the T and C, the customer is entering into an agreement with LH on the terms that LH has set. Once they've entered the agreement, it raises questions about how much they can claim they have been mislead when everything has been put out very clearly in the agreement.

That's not the state of the law in Europe. There are laws about unfair terms in contracts which have not been individually negotiated, but are standard business terms ( = all contract terms pre-formulated for more than two contracts which one party to the contract (the user) presents to the other party upon the entering into of the contract).

The relevant section in the German civil code is, for example:

"(1)Provisions in standard business terms are ineffective if, contrary to the requirement of good faith, they unreasonably disadvantage the other party to the contract with the user. An unreasonable disadvantage may also arise from the provision not being clear and comprehensible.
(2) An unreasonable disadvantage is, in case of doubt, to be assumed to exist if a provision
1. is not compatible with essential principles of the statutory provision from which it deviates, or
2. limits essential rights or duties inherent in the nature of the contract to such an extent that attainment of the purpose of the contract is jeopardised."


A provision that allows Lufthansa to devalue frequent flyer miles that you have earned as part of a purchase disadvantages the other party to the contract (the passenger) with the user (Lufthansa).


User currently offline5MillionMiler From Australia, joined Sep 2011, 88 posts, RR: 0
Reply 23, posted (2 years 9 months 2 weeks 1 day 6 hours ago) and read 3864 times:

Quoting LOWS (Reply 6):
I was looking at using miles for an upcoming trip to AMS. LH wanted 250€ (or another 15k Miles) for the taxes! I eventually just ended up paying 180€ and not using miles.

Absolutely! Miles + cash can add up to be crazy. Taxes and fees are a trap, especially in a lot of EU countries (taxes). Also, never buy anything from the miles store for cash and points, as most loyalty programs are designed to cover their costs for merchandise with the cash and then deplete your points... miles are not worth as much in buying retail.

As someone mentioned above, miles are best value for longhaul premium flights which would cost a fortune in cash.

And also...

Quoting Runzel (Reply 21):
I live in Australia and since the murder of AN have been faced with poor choices of local programmes. QF & NZ are not good, DJ (by any name remains unspeakable). Ergo I have for the last 10+ years maintained membership of a North American based carrier member of Star Alliance.

Haha YES! me too. Live in Sydney but am 1K on UA and my United miles are worth nearly twice what NZ or LH miles are worth in their programs, and I can usually book ff miles in premium on either using UA points easily, with enough notice, for a fraction of the M&M or AP miles required. Same goes for AA points worth much more than QF points for same metal on same routes.


User currently offlineikramerica From United States of America, joined May 2005, 21590 posts, RR: 59
Reply 24, posted (2 years 9 months 2 weeks 1 day 6 hours ago) and read 3831 times:

Exactly right about the only value of miles being long haul premium, and surprisingly, for magazine subscriptions. Used this way a mile can be worth 5-10 cents US, or close to 10% return of money from miles credit card purchases (when additional bonuses are accounted for). Why anyone would use miles in a way that makes them worth 1cent or less is beyond me.

Recently used CO miles of 117,500 for LAX-LHR-ZRH in F/J on UA/LX and returning VCE-MUC-LAX in J w under $150 in total taxes. Which would go for just about $11,750 plus same taxes.



Of all the things to worry about... the Wookie has no pants.
25 VC10er : So if you spend the majority of you life for 2 years on LH to make HON, then what does one get beyond Global Services? And to stay HON must you maint
26 5MillionMiler : What does that take? I have been 1K for a while and and platinum on Qantas and Virgin Australis, gold on Emirates so top tier on four but not sure wh
27 RyanairGuru : The same applies in common law jurisdictions as well. I don't know what the law is in Canada (for ElPistolero) but as a general rule if one party pre
28 ogepma : Yes, you get access to the First Class lounge and First class terminal no matter what. You also get a 24 hour booking guarantee. It is supposed to op
29 Post contains links Viscount724 : HON Circle status is valid for 2 years. If you earn 600,000 status miles during the 2 year validity period your status is extended for a further 2 ye
30 AeroWesty : It's well documented on other sites that about $50K a year of full-fare tickets will do it. On LH you get credited at 2x for Business and at 3x for F
31 Unflug : The miles were devaluated, not reduced. This has no influence on the number of HONs.
32 yyz717 : OMG....A German court got involved in this? Let's look at the big picture......a customer VOLUNTARILY flies LH while LH VOLUNTARILY offers non-moneti
33 thuegin : Hi to all, I have been watching this with interest. You make a decision when buying an airline ticket and the points and their value maybe a part of y
34 yyz717 : It is unfair, but you can choose to not fly LH anymore. That is the better option and message to LH. But to continue flying LH while also suing them
35 5MillionMiler : Worst case of mistiming I had redeeming FF miles was years ago when BA charged 175K miles for a Concorde ticket from JFK to LHR then first class to Sy
36 Unflug : That doesn't bring back the lost value. Honestly I'm much more interested in the correct balance on my bank account than in attempting to "educate" t
37 ikramerica : Can't agree. That's fine for future transactions, but that doesn't mitigate the fraud or bait and switch that already occurred. Considering how airli
38 Glareskin : And I live in The Netherlands and I am 1K for several years now. But the advantages we used to have with UA are dissapearing rapidly. Here are a few
39 ikramerica : The closer to the time of the trip, the more options that will open up. If you are 1K, you can change for free up until the last minute, so take adva
40 Viscount724 : But the small print in your banking agreement probably doesn't have wording to say that they can close your account without notice with no future lia
41 ikramerica : Too different things there. Closing your account without notice? FF programs can't do that. Ending the program? That's different, but even then, memb
42 Glareskin : Me neither but are you sure it is only 4 segments? I hope so, I am still there.....
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