oneworld member airberlin’s topbonus frequent flyer program is not primarily a loyalty program. It’s a financing mechanism and backdoor way to control the airline itself.
In 2012 the topbonus program was spun off as a separate entity with 70% sold to Etihad for about a quarter of a billion dollars. Etihad overpaid. On purpose.
- It was valued about 50% more per member than the spinoffs of Gol’s program and TAM’s and three times as much as Aeromexico’s.
- It has financially underperformed, like the airline itself.
However it was a way of infusing additional cash into the airline without running afoul of foreign ownership limits on the airline itself. And by taking majority control of the frequent flyer program it was an additional mechanism of control without majority shareholding in airberlin.
For awhile airberlin topbonus had one other purpose, at least for US frequent flyers: status matches. American Airlines elites matching status in the topbonus program could get oneworld status which would give them complimentary Admirals Club access when flying domestically. (topbonus now requires US-based members to have booked a flight on airberlin before they’ll consider offering a status match.)
airberlin has among the worst-performing financials of any airline in the world. In the first quarter its operating margin was -42%. Disastrous investments in airberlin and Alitalia led to the ouster of Etihad’s CEO.
When you’re at bottom there are two ways to go: cut your frequent flyer program to conserve cash, or invest in your marketing program to attract customers. Since airberlin is attempting to stabilize itself by cutting back its airline operations, it’s not surprising they’d cut back the generosity of the loyalty program too.
They’re raising mileage rates and offering new more expensive awards that include fuel surcharges and taxes.
- Business class between North America and Europe goes up 50%, from 40,000 miles each way to 60,000 miles each way.
- Or pay 110,000 miles each way for what they’re calling a ‘free’ flight (isn’t that what award tickets were supposed to be) — no taxes or surcharges.
Here’s the new award chart for September 1 onward:
I do like offering awards that don’t incur surcharges. However programs face a dilemma when doing so. Members value miles at more than programs book the cost of those miles. So when a program wants to remain financially neutral, they charge way too many miles (from the member’s perspective) to buy out of the fuel surcharges.
Put another way, fuel surcharges are a junk fee that’s a lucrative tax for programs to collect from members who have nowhere else to go to spend their miles. Giving up that tax is costly.