1. You really think demand for NZ status is higher than for virtually any other airline, even in the same alliance? It is just the Airpoints Dollars system, compared to miles based programmes, not supply and demand.
I have a feeling my comments here will be misconstrued, I'm not suggesting the levels are dynamic and set by the public but trends occur over a period of time. The New Zealand market and Air NZ can't be directly compared to 'any other airline' even 'in the same alliance'.
Yes, it's now harder to earn Elite status than it was 20 years ago, the required levels have increased over time and the earn rates may be lower. Yet, the number of active and 'engaged' members has increased and dramatically increased in the last 10 years. All while the size of each tier level has grown yet been managed so it doesn't balloon out of control.
I'll make up numbers here, Elite Status is reserved for your top 2% of travellers and it's a fine balance to base this on either spend or frequency.
In the 90's it was expensive to fly. A last minute booking to SYD and back would set you back close to $2K and that wasn't a shock. A trip to the UK was normally combined with any number of other requirements so the travel was 'justified' and domestic business travel wasn't as accessible by middle management or SME's as it is today.
Today, I've seen people fly to the UK for 2 days, a day trip to SYD/MEL is normal and I've seen some Elites fly 3-4 days out of 5. There are some who fly domestically daily on some weeks.
There are some Elites who earn their Elite status multiple times in a year. I know of one member who openly retained Elite, then moved his travel to QF and earned One World status and to be honest I can't blame him and I'd do the same.
This change in travel pattern has driven up what's required to be seen as that "top 2%".... the impacts are mostly felt but the everyday Kiwi traveller. My in-laws, for example, they're retired and will travel 3-4 times a year. They've got no hope in seeing Silver yet see themselves as Air NZ loyal and they are.
Fixing that isn't easy. You can't just have a business and leisure rates, firstly you can't police any miss use of it, secondly, how does that work when you mix and match leisure and business travel?
Do you have more tiers? That's a possible solution, but what benefits do you offer? lounges would be the first request no doubt, but make sure you don't cut the lunch of Koru Memberships or add to the already congested lounges. You're left with Bags, Seats and Product Upgrades. Is that of value and will it generate loyalty or revenue?
Could the airline reengineer 'Airpoints Part Pay' so it's seen more rewarding when you use APD from your previous flights to get a discount on this one? Or can you market the retail accruals and NZ flights to attack people into flying NZ by way of 'Savings' for future travel aka how the Bank encourages you to save? I guess this is tapping into what the airline has tried or is trying to do.