Air France KLM Flying Blue Preparing for Huge Revenue-Based Devaluation

I find the Air France KLM Flying Blue program incredibly frustrating for booking awards. There are false positives for award space on their website, customer service representatives are often rude and incompetent, and most importantly they have a penchant for shutting down newly opened accounts that members transfer points into (such as from American Express Membership Rewards and Citi ThankYou Rewards) and immediately redeem awards from.

As a result I’ve limited the coverage I’ve given to the program. I don’t recommend using it for most purposes because I simply find the juice isn’t worth the squeeze.

Back in January I wrote about the frustrations of a frequent flyer program fraud detection unit gone off the rails.

Air France KLM’s Flying Blue shut down the account of someone who simply transferred points in from American Express Membership Rewards and redeemed those points for a ticket. The American Express account, Flying Blue account, and tickets were all for the same person. (American Express no longer even lets you transfer points to other people any more.)

I learned about readers who had had similar experiences and I saw the response of a fraud unit employee who actually claimed they wouldn’t permit transferring in points just to book awards.

[T]he use of our frequent flyer accounts as boxes opened to transfer miles with our non air partners won’t be allowed anymore.

Aside from account shutdowns, new accounts were being told they had to ticket awards at the airport. As Flying Blue explained to me,

Our Flying Blue program has enacted a new automatic security process that will alert us to certain transactions to prevent fraud. If this happens, our agent cannot issue the ticket and the customer must go to an Air France agency to process the payment. We understand and apologize that this process may generate frustration for the members.

Here’s the thing:

  • Many Americans live nowhere near an Air France ticket counter. That’s precisely why Air France has partners like Delta and Alaska, to bring those customers to Air France cities.
  • Airport agents seem to have generally no idea that members are being directed there to issue award tickets and most do not know how to proceed.


Air France Ticket Counter, Washington Dulles

Any program treating their members that way I knock down several notches even apart from their earn and burn proposition. So I don’t get too worked up over changes that are coming to that program, although those changes are noteworthy because they represent a spread of changes.

Via Loyalty Lobby, French media is reporting (in French, quotes via Google translate) comments by Flying Blue director Frederic Kahane on the future of the program that’s dubbed “very big change.”

  • The program has 12 million members
  • Changes will take place between the first quarter of 2016 and complete in the first quarter of 2018

And you know those changes won’t be good (emphasis mine):

“The 10 years of Flying Blue were an opportunity to take stock and set new ambitions, said Frederic Kahane. The objective is to improve greatly the satisfaction index, preserving the program’s economic balance. ”

They’re talking about simplification while analogizing to the changes Delta made moving to revenue-based mileage earning for flights:

The first priority will be to simplify the rules. “Many customers say they are understanding it,” admits Frederic Kahane. Other companies like Delta have already begun this work of simplification “, he says. The American company, Air France-KLM partner, has decided, there is already one year to replace the miles calculation system based on distance traveled by a new structure based on the ticket price.

They’re promising to introduce lifetime Platinum status for members who spend 10 years at the Platinum level, which is strange since they already offer lifetime Platinum. (Indeed, my award booking partner is a lifetime Platinum though I believe his is a carry over from KLM lifetime Platinum prior to the merger.)

Meanwhile Silvers will see a cut in benefits similar to what Delta did to their silvers:

Silver will now wait for the Platinum and Gold are awarded for boarding. They do not benefit, either, priority luggage delivery and priority access to security checks and immigration.

None of this should be surprising. They certainly aren’t the first non-U.S. frequent flyer program to take the revenue-based plunge. And they’ll be following British Airways’ huge devaluation so it’s only surprising that we haven’t seen even more changes, more quickly, and from other European programs as well — though they tend to move a little more slowly in Europe.

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

  1. Coworker of mine had to drive to IAD after work to prove his identity at Air France’s office. Gary, I’m sure you well remember rush hour in the DMV.

  2. With pressure from European LCCs and the ME3, you’d think that European legacies like BA, AF, KL, and LH would at least use their FF programs as a differentiator because they clearly are not competing on price. What exactly is their thinking here? Are they just drowning in labor costs that they need to cut anywhere they can?

    As far as labor costs, if the western European countries can afford the billions of euros they are committing to climate change mitigation and the mideast refugee crisis, is there any talk of helping companies with their pension obligations to preserve jobs? If the jobs disappear, so do tax revenues and they won’t be able to afford to do any of the other stuff anyway.

  3. Maybe they’ll let non-elites book their F product now? Or is it wishful thinking to imagine that anything positive could come from a FF program change?

  4. I’ve also read many horror stories about the AirFrance/KLM FlyingBlue. However, my experience so far with that program has been very good:

    1) I was able to book three business class tickets, in the Summer of 2015, from the East Coast to Eastern Europe. The availability was excellent, especially given that I was looking to fly during the peak season and that I needed to book tickets for my family of three. There was plenty of flexibility when it came to choosing the day of the week and the combination of flights. I booked the flights late in the spring but the availability remained very good right up until we took off, in August! In fact, I had to make a last minute change due to a canceled flight and, to my amazement, AirFrance still had three award seats available on the flight we wanted, just hours before we left.

    I’ve also looked at booking award seats with Lufthansa (via United’s program) or with British (via American’s) but the availability was very poor, even when looking 7-8 months out.

    2) I also booked three business class award seats for the Summer of 2016, from the East Coast to Western Europe. The availability was again excellent. BTW, for certain days and times I had the option to book flights operated by Delta, with very reasonable award fees. I looked at American and at United to fly with British and Lufthansa, respectively, but the availability was again poor, the connections were bad (example: 8 hour layover in London!) etc.

    Gary, call me crazy or naive, but I’ll tell you one thing: the main reason I applied for some Citi credit cards was the fact that I could transfer those points to AirFrance. So far this has worked very very well for me! OTOH, I’m still trying to figure out how to use my AAdvantage miles. I’m glad to hear from you and others that American has great customer service but unfortunately those miles seem to be extremely difficult to use, for both domestic and international flights (Europe, South America, Japan, California, Hawaii etc).

  5. Jason, I love points & miles as much as anyone but to invoke climate change and helping refugees as something we can just take or leave based on the needs of a few greedy individuals is very short-sighted. I think the European Airlines and the U.S. airlines ought to start measuring themselves against the Asian and Gulf carriers as they are the ones that will benefit in the long term as people learn and shift allegiances. No different than what happened to GM, Ford & Chrysler with their greed and short-sightedness.

  6. Similar positive experiences getting from West Coast USA to the Climate Change Conference near Paris with Citi TYP transferred to Flying Blue.

    A very courteous and competent AF agent booked my seat not only on the day but at the time I wanted.

    Not a hint of the outrageous shutdowns and detours to buy the tix at the airport discussed above.

    There was a glitch getting the TYP into the FB account which Citi addressed by depositing an additional 25K FB points at a cost of zero TYP.

    Competitive award miles cost (50K o/w in business) and modest fees. As I recall, even the change fee would have been reasonable.

    I would use the program again, and recommend it.

  7. So no mention about redemption changes?

    Going to revenue based on earn isn’t a stunning change given the low earning already on discount fares.

  8. Small translation bug:

    ” “Many customers say they are understanding it,” admits Frederic Kahane.”

    The original French actually points toward the opposite meaning, in that Kahane states that he believes passengers *do not* understand the program’s rules. Google Translate is pretty good, but not perfect…

  9. Actually what Flying Blue is aiming at is different from Delta (improving earnings frem the program even if it causes resentment) in that they want to improve satisfaction with the program without hurting their finances. So they may go revenue based (but it doesn’t say so in the article) but then they will have to come up with other improvements to get an increase in satisfaction. However since 90% of Flying Blue members are non-elites the miles community may not like the changes even if they improve overall satisfaction with the program.

    They do mention better redemption posibilities (including redeeming for travel on their LLC) and the recent reduction in price for some travel in Europe (from 10-8.000 points).

    EU legacy carriers still need their loyality programs. They are still making no money and are under immence pressure from LLC’s. So lets see what the future brings for Flying Blue.

    Slightly of topic: Scandinavian are promissing real improvements in their program i 2016 (we’ll see) – and mentioned earlier that they generate 50% of their revenue from members.

  10. The total amount of “Airlines Miles” awarded globally, converted in “USD currency” would be the second currency in the world, just behind USD. No wonder airlines want to controll the use of “Airlines Miles” (redeem ticket) : there is no global free market and the “Price for a Mile” is being eventually controlled by airlines’ internal policies … Airlines change their redeem policies every 2 years and fully controll the “miles seats availibility” according to their ratios.

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