Air France KLM Drops Award Pricing, Makes More Money As A Result [Roundup]

by Gary Leff

News and notes from around the interweb:

  • The profitability of Air France KLM’s Flying Blue program ($$ but well worth it) – remember that European credit card interchange is regulated, but Air France partners with all of the transferable currencies in the U.S. and expects more awards issued this year here than in Europe (!).

    This was the first time an earnings release broke out Flying Blue’s contribution. In the first quarter, the program recorded revenue of €196 million, and an operating margin of 24 percent. This compares favorably to International Airlines Group, which also breaks out its loyalty contribution (Lufthansa does not.) IAG will not report first quarter earnings until May 10, but the company’s loyalty segment had a 28.4 percent operating margin in 2022 and 21.7 percent operating margin in 2023.

  • They’re coming for your disposable hotel slippers

  • There will be an opportunity to earn points for Peleton workouts done at Hyatt properties details remain forthcoming.

  • Chase 40% transfer bonus to Marriott through June 15, 2024. Not worth it.

  • Chase 30% transfer bonus to Virgin Atlantic through June 15. Great if you’re going to make a transfer anyway, not something I’d do speculatively.

  • American Express 20% transfer bonus to Aeromexico through May 31. Club Premier is trash, unless you happen to be in a city where they’re running an own-metal redemption special, stay away.

  • Hyatt added each hotel’s award category into search results. That’s a minor convenience, but I think it suggests that concerns that the chain would move away from award charts are probably wrong. Any IT improvements at Hyatt have long seemed like Hurculean efforts and I don’t think they’d have bothered if this was short-lived. (Hyatt also says they are not moving away from charts.)

  • The kosher meals used to be better than standard catering actually.

    All of the in flight kosher meals from BCN to JFK looked like this
    byu/Duty_free_USA inamericanairlines

  • New Emirates Bvlgari amenity kits

  • Lufthansa’s new Mileage Bargains business class between the U.S. and Europe for 55,0000 miles roundtrip

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  2. American, Delta & United need to follow what KLM is doing and lower award costs. Restore value to our miles and actually brings customers back instead of driving them away.

  3. Ummmm, I would think that ANY airline is responsible for the food served ON BOARD. And any FA who responded as the commenter’s experience suggested ought to be reported/written up, IMHO.

  4. Personally i would rather spend more miles and actually get the flight for free than spend “only” 20k flying blue points plus 250$ in taxes and fees

  5. LH offering bargain biz class transatlantic awards but not making availability to partners. What a misleading approach to an alliance.

  7. Glad to see FlyingBlue gaining ground by improving the redemption prospects of the program for customers like me. And yes, I have been transferring more “bank” points into the AF/KL program than I used to do several years ago.

  8. Maybe Brian has more commentary in the premium section of the article, but if you read the Air France KLM press release, they note that they only created the Flying Blue subsidiary at the end of 2023 and are for the first quarter in 1Q24 reporting Flying Blue revenues (it’s not in the 2023 annual report, for example). Given that is the case, isn’t it a bit jumping the gun to claim that Flying Blue is “making more money” since we don’t know if the revenue or operating profits grew, and even if they did, whether that is primarily or even partially attributable to the reduction in award prices? Finally, given that the award prices for AF-KLM are dynamic, couldn’t it be true that even though there is now a lower amount of miles required for the cheapest redemptions, that the average redemption cost for a particular flight could still be higher since there are very few seats available at the lowest redemption rates, and therefore they didn’t actually reduce the award pricing but just made it dynamic across a wider range of prices? Based on what AF-KLM has disclosed so far, it’s a huge stretch to claim that lowering award prices is 1. what they have done and 2. that is has led to Flying Blue “making more money”

  9. @ Henry — I would rtaher pay 20k miles + $250 to AF than 100k miles + $5 to PrimoAir.

    @ Gary — Is AF/KL using different accounting rules than DL/UA/AA? @ Tim Dunn — Please don’t answer my question.

  10. @ Bobby J — Oh, but you can be one the first to fly on the world’s stupidest premium products ever (except BA’s disastrous old seats)! Actually, I think 55k + $500 is a great price, but a crappy product.

  11. Haven’t seen slippers provided in U.S. hotel rooms for awhile, other than places like Waldorf and Four Seasons. And those aren’t single use.

Comments are closed.