Ben Lipsey, head of Air France KLM Flying Blue who got his start in the airline industry by messaging Air Canada’s President on FlyerTalk to score an internship when he was 20 years old and eventually moved over with Ben Smith when he became CEO of Air France KLM, gave an interview where he talked about the importance of the program’s value proposition for Americans.
Already Flying Blue is the best loyalty program in SkyTeam (“in the land of the blind…”). They offer semi-reasonable redemption rates and better award availability for their own members. And as a European program they don’t have the same opportunities to earn outsized revenue from co-brand credit card deals that U.S. carriers can, largely because of capped interchange.
So the program partners with all of the big transferable currencies in the U.S. You can move American Express, Chase, Capital One, Citibank and Bilt points. And Air France KLM has a U.S. credit card from Bank of America, as well as other cards outside of their home market.
Lipsey marvels about the lucrative card deals, about the billions of dollars of value that U.S. airlines generate, and explains how these transfer deals give them a piece of that lucrative market. And that’s actually a key driver for program design.
Flying Blue is, is a transfer partner, for example, of the Big Four transfer, you know, transferable points, currencies in the US with Amex and Citi and Chase and, and now Capital One. And you know, for us, we’re really trying to improve our proposition, our redemption program to make it more attractive for Americans to earn miles both in our co-brand card with Bank of America, as well as to transfer miles from the US banking partners into Flying Blue and redeem via Flying Blue. Uh, with the number of enhancements that we’ve both made and are about to make, to encourage those members, because like I said, that’s where the money is.
I’d note that Flying Blue has actually re-introduced an award chart after previously eliminating it, and they’ve just added free stopovers even on one-way awards.
Sorry, Europe, the U.S. launched loyalty marketing in the airline industry over 40 years ago and still rules the world.
If they truly want to attract more American loyalty point-users, THEN MAKE MORE PROMO AWARDS AND DEALS FROM THE WEST COAST. It’s that simple…
Your last comment overlooks why that is. The reason is what you quote Lipsey as stating earlier in the piece. If the interchange fees in Europe were not legally capped, then the issuers would make a lot more money and you’d likely see a similar landscape in Europe to the one in the US. And, as retailers pay those fees, and pass those costs onto shoppers, it’s shoppers that are paying for airline loyalty marketing programs. The issue is that most shoppers don’t participate in the programs and don’t know that they are paying for it with every credit card transaction they make.
crazy the turnaround from auditing many accounts with any points transfers to actively seeking them out.
Pretty big change from a few years ago where they regarded transferring points into FB to book award tickets as “fraud” and required you to go to the airport to clear it up.
When they eliminate non-governmental award travel surcharges I’ll join enthusiastically, even if I have to transit the CDG pagaille.
Would definitely consider getting more engaged with Flying Blue if they had a status match program . I know it’s uncommon for European programs to offer match programs but it’s too daunting for top tier elites elsewhere to start at the bottom of a new program . Flying Blue is definitely. Intriguing.
Business class awards for 55,000 points and $225 dollars is great, booked to Berlin back in November from JFK. Going back via Newark in February to try out the AirFrance product. Far and away better service and experience than anything i’ve had transatlantic on American or BA for a fraction of the cost.
“enhancements that we’ve both made and are about to make”
Any idea what’s coming down the road?
I’m game. Anything beats converting them to Sky Pesos.
@Daniel – I think this was recorded prior to the changes announced a few days ago, even though it was just released today
Lipsey is as slime as it gets. Has been since his early days at AC.
Which does however, make him perfect for the job.
searching the entire month of September and October MIQ CDG RT is 140k plus $500 each in biz. Where are the 55k flights to EU originating from?
sorry MIA CDG. need an edit button
@Victor – JFK.
Cheapest from MIA is 70K one way, as you noted. The app even says “from 70,000” when you enter the cities so no point looking for dates with anything cheaper.
JFK to LAX = domestic flight for XP. Toronto to YVR = domestic flight for XP. CDG to LHR (how many miles???) = International for XP.
The design of XP implicitly favors European members and disadvantages Canadian and US members. They know it.
No way.
There are some destinations served best by SkyTeam carriers, and Delta’s miles are all but worthless, so let’s give them a lot of encouragement to get in the game in a bigger way. Actually this is a logical and under explored way of looking at gaining revenue. We know the US carriers have developed massive assets out of their mileage programs. Maybe other carriers can indeed entice some of that value their way by offering a good reason for engagement by Americans. I’ve just begun taking a serious interest in the program and am eager to see what develops.
Good for him, what a run – less than 5 years in the industry to chief of staff to a global CEO, and less than 10 years to this
Has a Scott O’Leary “CO Insider” vibe who gets it – I was wondering why AF was bothering with the resources to even implement stopovers.
Now why is he making La Premiere so inaccessible. this basically confirms he saw Lucky’s post about earning status primarily to access the awards
Intriguingly Ben gave exactly the same line, virtually word for word, in his speech at World Aviation Festival in Amsterdam a couple of months ago – indeed I referenced it in an article this week. Is he trying to get a message out to someone?
You have to look for the 55K, 59.5K and 70K AF/KLM TATL business awards, and they come and go, but they are out there. I’ve booked some for April.
AF is also an airline you can find upgrade for miles space on with expertflyer.
I regularly fly economy via CDG on Air France to Asia and book 30% of the time with miles since the route distance and flight time is shorter than Qatar.
The one drawback with booking with FB miles I’ve found is that the CDG AF lounge says it’s 75 Euros on the AF website, but when I log in to my booking, economy miles bookings never display a lounge option within the booking itself. You just have to show up at the airport and hope there’s space. Small I know but it makes a difference on long flights knowing I can have a spot to rest up.
They have pushed through major devaluations twice so far this year, including an absolute gutting of WestJet awards. If they want Americans to use their program, maybe try having reasonable redemption rates?
After Delta broke the SkyTeam contract and kicked their own members out of their lounges for Y international flights I’m trying to work out where next.
Flying Blue is annoying because XP is status and nothing in the US on DL earns decent XP.
Hmm. Still putting my DL Platinum Skymiles # in for now.