Skift Take

Award seats on Lufthansa will soon be priced according to market demand instead of a strict tiered system. Not all passengers are happy.

Series: Business of Loyalty

Travel Loyalty News

The Skift Business of Loyalty covers the world of hotel, airline, and other consumer loyalty programs in the travel industry. Read more coverage of loyalty here.

The practice of using dynamic pricing, or selling award seats as a function of demand or retail market price, is spreading into Europe. Last week, Lufthansa confirmed that it would be the first carrier to adopt the model for its Miles & More loyalty program later this year, though it wouldn’t share an exact timeline.

Lufthansa follows Delta and now United, which launched its own dynamic plans last month.

Passenger feedback on dynamic pricing has been mixed. After Skift wrote about Lufthansa’s new pricing policy, reader Sam wrote in with feedback on how Delta’s incorporation of the new model was being received.

“Frankly it’s mind-boggling that anyone even remotely knowledgeable with the airline industry could possibly find anything positive to say about that model,” he says. “It’s been proven to be a way for the airlines to gouge their loyal customers.

“I live in Atlanta, which is a home base for Delta. It introduced that kind of system a few years ago, and since then its mileage requirements on most desirable business class award tickets to Europe went up from 75K to 86K and now 105K for a one-way ticket! Always! Never less, even in winter low-flying season! Is that what you call a customer-friendly system? It is because of its dynamic award-pricing model that I began to truly hate Delta, and avoid flying on it as much as possible.”

Others haven’t been so bothered. Matthew Stolen, another frequent flyer on Delta interviewed recently, shrugged off the changes, justifying them against “a superior hard and soft product.”

As dynamic pricing continues to spread across airline loyalty programs, expect these rifts between airlines and frequent flyers — and even among frequent flyers — to grow.

— Grant Martin, Business of Loyalty Editor

Skift Stories and More Expert Insight

A guest room at Tsingpu Tulou Retreat in Fujian Province, China, a popular boutique hotel in the Design Hotels portfolio. Source: Design Hotels

Marriott Executive Takes on New Challenge of Growing Design Hotels Brand: When Starwood first acquired a 50 percent stake in Design Hotels in 2011, the company allowed SPG rewards members to earn and redeem points at any Design Hotels property. The option is now extended to Marriott Bonvoy members. Both companies will launch a joint television ad this summer highlighting the partnership.

Lufthansa Will Adopt Dynamic Award Pricing for Its Loyalty Program: Lufthansa is planning to adopt dynamic award pricing within Miles & More, its loyalty program. In a press briefing late last week, the German flag carrier confirmed that it would be moving away from a tiered system for calculating the cost of tickets purchased with frequent flyer miles and toward a new standard that prices tickets according to the retail price of the fare.

American Express Removes Free Airport Lounge Meal Benefit from Platinum Cards: A key benefit that comes with the American Express Platinum credit card is going away later this summer. On August 1, American Express Platinum cardholders that sign up for Priority Pass will no longer be able to use the latter membership to access airport restaurants for free meals.

U.S. Airlines Add Untapped International Routes in Next Stage of Growth: The U.S. airline industry is roughly seven years into one of the most profitable periods in its history, and with demand still booming, there’s little sign it will end soon. But have U.S. carriers run out of logical routes?

Airbnb Tests Hotel Integration by Adding Some HotelTonight Partners: The next phase in Airbnb’s growth and breadth of offerings is taking shape as it begins to add a limited number of hotels that also participate in newly acquired HotelTonight.

United Won’t Pay Munoz a Full Bonus: U.S. Airline CEO Pay 2018: After United Airlines’ disastrous 2017 — when security officers in Chicago forcibly removed a customer from an overbooked plane — the company’s board revamped how senior executives earned performance bonuses, adding a segment for customer satisfaction. By most accounts United has improved. But not enough, the board found.

Six Senses Hotels to Build Its Own Brand Within IHG: Don’t Expect Spas Across Portfolio: The $4.2 trillion wellness market isn’t a strong suit of Intercontinental Hotels Group, but the chain’s acquisition of Six Senses Hotels Resorts Spas is just the treatment it needs to change that.

The Anti-Flying Movement Is Slowly Starting to Hurt European Airlines: A lot of people feel guilty about flying, but the number prepared to give it up is still pretty small. That’s not to say it can’t grow, especially as climate change becomes more of a priority.

Airbnb Eliminates Some Guest Fees to Take on Booking Holdings: In a game-changing move to better compete against, Airbnb is eliminating guest fees for many property managers and hotels that sign up for its service beginning June 4, Skift has learned.

Rosewood Hotel CEO Demands ‘Sense of Place’ in Each Property: With 21 properties in its development pipeline, Rosewood Hotel Group maintains it will bring a “sense of place” and a “bespoke sensibility” to each hotel, CEO Sonia Cheng said at Skift Forum Asia in Singapore on Monday.

United President Warns New Low-Cost Carriers Can’t Control Their Business Model: United Airlines President Scott Kirby issued a warning to potential new-entrant low-cost-carriers, including JetBlue founder David Neeleman’s Moxie: United will match your fares.

Subscribe to Skift’s Free Business of Loyalty Newsletter

Grant Martin [[email protected]] curates the Skift Business of Loyalty newsletter. He is director of product marketing at TripActions. Skift emails the newsletter every Monday.


Jet Stream Newsletter

Airline news moves fast. Don’t miss a beat with our weekly airline newsletter. Landing in your inbox every Saturday.

Have a confidential tip for Skift? Get in touch

Tags: dynamic pricing, frequent flyer miles, frequent flyer programs, loyalty

Photo credit: Lufthansa will be the first European carrier to adopt the dynamic-pricing model for its Miles & More loyalty program later this year. Rolf Bewersdorf Gregor Schlaeger / Lufthansa Group

Up Next

Loading next stories