Another Airline Goes Revenue-Based!

Star Alliance member (and Diners Club Rewards transfer partner) South African Airways is going to revenue-based mileage-earning starting February 1, 2015.

  • They’ll award 1 mile per R1.60 spent on airfare and fuel surcharges
  • This applies only to South African’s own flights
  • THere’s no change to mileage-earning on partner flights.

Unlike Delta and United, South African isn’t capping the number of miles you can earn with the most expensive tickets.

Since awards as well will be based on price, the mileage cost will be inclusive of fuel surcharges for South African flights. And they’re introducing redemption of miles for any seat on any of their flights with the new revenue-based structure.

Another revenue-based change will be that in addition to upgrading from full and nearly-full fare tickets with miles, they’ll let you pay the cash difference from your economy ticket to business class using miles at a cost based on that difference in fare.

Even as they are effectively abolishing reward charts for redemptions on their own flights, they recognize that much of the allure of frequent flyer programs stems from . The miles open up real possibility and reward for choosing one carrier or program or another. Customers don’t just want a currency with a fixed value set by the airline and changed at whim (remember that even revenue-based programs devalue).

Towards that end South African will offer, in lieu of their saver award chart, “JourneyBlitz Awards … which will be offered at astonishingly low mileage thresholds and on a promotional basis.” Fuel surcharges will apply.

Outside of these awards, they’ve set the program up to rebate 5% of spending in the form of travel credit, whether used for award tickets or upgrades.

It’s important to understand that:

  • Few programs have taken things as far as South African, even Delta didn’t abolish the award chart with their transition to revenue-based.
  • Despite moves at both United and Delta that may skew the perceptions of Americans, it’s a tiny percentage of programs that have made such a switch.
  • They’ve been a long time in coming. It’s been a decade since Air New Zealand made this move.
  • It’s been even longer than that since we first saw revenue-based programs in the U.S. America West Flight Fund’s pre-mileage offering, for instance, and Independence Air both had this. The idea has floated around for quite awhile before gaining even the traction that it has.

I don’t like these moves, but there are a lot of models for programs in the world and I’ll concentrate on those that offer the best value to me as a consumer — which is still a model, after all, that has been highly profitable for the programs themselves for quite some time.


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 »

More articles by Gary Leff »

Comments

  1. “…there are a lot of models for programs in the world and I’ll concentrate on those that offer the best value to me as a consumer…”

    And what may these be?

  2. @Angelo – Transferrable programs (Amex Membership Rewards, Chase Ultimate Rewards, Starwood Preferred Guest though to a lesser extent Citi Thank You, Diners Club Rewards)… American and Alaska, Japan Airlines, Korean Air… to some extent British Airways… All Nippon, Singapore…

  3. 1 mile per R1.60 is a lot better value than I’ve been earning on average for my SAA flights in recent years!!

  4. I know Gary, I’d never have been a Voyager member anyway with the crappy program they had. It just irks me that I once had to pay $742 RT for a 2 hour flight with them in a NON MILEAGE EARNING discount economy class. 🙂

Leave a Reply

Your email address will not be published. Required fields are marked *