|Quoting koruman (Reply 4):|
Air NZ's management don't think that that is a good investment. They have realigned their loyalty program to be a retail and banking loyalty program, and have decided to strip out the benefits which they know their elite frequent flyers most appreciate in favour of seeking more ancillary revenue from infrequent flyers buying upgrades with money.
|Quoting koruman (Reply 4):|
It is obvious that at least half of their top tier frequent flyers will now transfer their loyalty elsewhere, but it is clear that the airline is planning to operate with limited long-haul capacity and that it views frequent flyers and their feelings of entitlement as a burden, a liability, and that they believe that they are better off without them.
|Quoting MillwallSean (Reply 7):|
I wonder if this really will hurt NZ that much. What customers will they loose from this?
people like us will to a man know this is bad and that there is little point in giving our loyalty to NZ. But we are the minority. Most NZ based customers and expat kiwis wills till think NZ is their airline.
Their Australian operation is virtually dead as it is. With more non-stops from non Sydney to the US west coast there isn't much of a competitive edge for NZ to use in Australia. They might loose what was left of that market.
I'm not sure that the Australian long-haul operation was actually already dead, but it sure as hell is now.
's niche from Australia has been Brisbane and Melbourne, and most of their passengers, like myself, have a degree of control over their bookings. I usually find that around 4 or so other passengers (outside my booking) in Business Class on each NZ136 BNE
continue on to my AKL
flight. I'm assuming that that market will now no longer continue to fly Air NZ
, and that NZ5/6 (LAX
) and NZ7/8 (SFO
) are now going to become marginal propositions. Only the exit of Qantas from AKL
may give Air NZ
|Quoting MillwallSean (Reply 7):|
So whats left to loose a few aware flayers that shop around for Frequent flyer programs. I think NZ are prepared to loose them. I also think that they are less than 5% of the total Gold elites, golds etc.
I agree with you that what Air NZ
is going to lose is the motivated, savvy frequent flyers. And that they think that they are not a good investment.
I'm just not sure whether or not I agree with the airline that those passengers are not worth retaining. It is basically Mariner's position, isn't it, that frequent flyers are essentially worthless and a liability rather than an asset. But it is not the prevailing view in global aviation, and Virgin Australia's newfound profitability is on the back of an enhanced frequent flyer program, Status Matching elites from other carriers and adding Business Class to narrowbody aircraft which previously operated under a Seats To Suit-style model.
The anger and hurt aroused by all this is essentially silly: it is a business proposition for airline and consumers alike, and each side is free to take their product or custom where they like. It is just awful for NZ
-based passengers who have no real choice either domestically or across the Pacific, and who are effectively held captive to Air NZ
. The Australian market will now evaporate overnight: every NZ
elite I know in Australia already considered the airline to be on its last chance, and we are spoilt for choice with alternative carriers.
My view is that Air New Zealand will also be damaged in New Zealand, and that they will now lose even more market share to Europe and Asia, but North America will hold on artificially until a new entrant (United) enters the market. "Earn To Fly" has massively expanded the base of Airpoints membership in New Zealand, but they are now going to discover that there is nothing worthwhile to spend those Airpoints on, and that will inevitably lead to a drift away. We have already seen that with the OneSmart Mastercard - lots of people activated it for the raffle, but I've yet to meet anyone who then continued to use it, because the fees were not worthwhile.
Even if Australian feed and departing Gold Elites only account for let's say 5 passengers in Business Class per flight, I think that that will compromise revenue and yields on all flights to the USA and Canada..
I'd now be surprised to see an independent Air New Zealand in 2016: I suspect that Virgin Australia or Qantas will take full control by then, and that the airline will be reduced to operating short-haul A320s and 787-9s for inbound Chinese visitors and a single daily LAX
service. I cannot imagine that they will be able to fill 77Ws.
Several weeks ago I named my management team to run the airline. Unfortunately I failed to identify who was actually going to take over:
CEO: JIM HICKEY. Popular bloke. Flat tummy, looks decent with his kit off and he's good company. Not sure that he knows anything about aviation. He could delegate to his management team, but they are all either just out of Uni or accountants who've never worked in an airline, so this might not go too well.
(If any of you watched the 2009 remake of Reggie Perrin, his two adolescent advertising sidekicks now appear to have free rein to "innovate" in ever more unorthodox ways. A bit like Air NZ
's current management unit.)
Head of PR
: JOSEPH GOEBBELS - with the innovative new task of spinning propaganda to his victims, rather than his accomplices. "With this new enhancement to the product, you only pay for what you want. So we charge you more than we used to last year when it was all-inclusive, and then you pay us even more money to have luggage, IFE, food, drink or Airpoints. We call it Seats To Suit Us".
Head of Loyalty: SIR
ROGER DOUGLAS. "What do you mean you expect your loyalty to get you free flights or upgrades? It's User Pays! So you want to upgrade your $5000 Premium Economy ticket to Business Premier, which retails for $8000? OK, you need to put in an auction bid for at least $3000 roundtrip, with your credit card details, plus pay the taxes which were included in the $8000 fare if you'd bought it in the first place. And you're lucky I'm letting you do that."
Head of Route Planning: Simpilicity / REALDEAL. "Forget using the 789s to North America. Let's put 700 seats on them and fly them to Invercargill" (Well, it's now looking like 340 seats from China for the 789s instead of 260 seats to North America).[Edited 2012-03-05 15:41:42]
[Edited 2012-03-05 15:45:09]