In November 2014 SAS announced some changes to its EuroBonus program, affecting both earning and redemption rates. The earnings are, in many cases, lower than before, particularly for lower fares on flights within Europe. But the company did stop short of making the program strictly revenue-based. That’s probably a good thing, right?
During an online chat hosted yesterday on the MIlePoint family of networks Nils Lindhe, VP Loyalty for SAS, addressed that aspect of the changes and made it clear that the change was no accident:
We came to a point where we had to adjust the level of points earned with the price development in the market. Today a ticket to Hamburg is not necessary much cheaper than a ticket to south of Spain due to the competition and we needed to secure a better relationship between the ticket price and points earned and yet simplify.
Fixed earning rates are, in many cases, simpler to understand than dollar-based so Lindhe’s comment makes sense in that context. And given the general shift across the market towards earning rates which are tied to spend it is also simple to understand why EuroBonus moved in this direction. Of course, that is little consolation to the passengers who just saw earning rates slashed on their most common flights.
It is also interesting in the context of fixed earning rates across the entire geographic region. EuroBonus is not alone in this approach; Aegean’s Miles & Bonus program and Lufthansa‘s Miles & More also accrue at fixed rates across Europe. And JetBlue had a similar fixed earn scheme based on regions of the country before it switched to a strictly revenue-based model.
It is of note that EuroBonus did not go to a strictly revenue-based program, unlike the trend seen in the USA. Perhaps because the competitive landscape in Europe is still a bit different, I suppose. Then again, Norwegian Airlines is arguably one of SAS’s largest competitors and is a revenue-based system. Plus there is the likelihood that in a revenue-based program those buying full fare or premium cabin seats would earn far more than the new rates offer. So maybe no customers are really winning with this plan.
But this approach still sees a theoretical separation of points from kroner, which makes it a smidgen easier to convince customers that the arrangement is about loyalty, not revenue. Even if the earnings are lower.
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The biggest problem I have with the changes, is that they were announce November 27, 2014, after SAS changed some information on their EuroBonus website. It gave customers approximately 10 hours warning, because flights booked on or before November 27, for travel on or after January 1, 2015, would earn points based on the old scheme.
SAS didn’t reach out to me as a customer, until December 3, 2014, announcing the changes. If I weren’t as involved as I am in Bonusfeber.no and websites like that, I wouldn’t have known about the changes until then, and it would’ve been too late for me to book any “good” mileage runs.
That’s my main issue, and Nils Lindhe didn’t even come anywhere close to addressing that, during last night’s chat. People have also been pretty annoyed by how these changes were actually described as “improvements”, especially by head of communication in Norway, Knut Morten Johnsen. He also managed to say this: “These changes won’t affect the majority of our passengers.”
Well, heck yes it will. SAS Go constitutes easily 75% of any given SAS intra-Europe or domestic flight.
No doubt that the effort to sell it as an improvement was a foolhardy one. Even high spending customers aren’t winning with the new plan the way they would were it truly revenue-based. As for the limited time to buy for earning under the old plan, I’m torn on that one. The US-based programs base earnings on when you travel, not when you purchase, so I’m much more used to that approach. In that context SAS was even more generous, though it required advanced knowledge/effort and a retro-claim as I understand it.
And there’s not really much Nils could say which would satisfy the customers who are getting hosed on this deal. I much more respect the executive who is direct and clear in the message than the one who tries to spin it.