Lufthansa’s Miles & More Program Goes Revenue Based


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Yesterday Lufthansa announced that its Miles & More rewards program would be going “revenue based” from 12 March 2018 but, rather unhelpfully, we weren’t given any more information than that. Today Lufthansa has finally provided the information that a lot of people have been anxiously awaiting.

What’s Changing At Miles & More?

The good news is that Miles & More will only be revenue based for the purpose of collecting redeemable miles – the way Miles & More members earn status and the way they spend their miles isn’t changing.

Essentially Miles & More is aping what we’ve already seen the US carriers do.

The changes are coming in to force for flights booked on or after 12 March 2018 so if you already have bookings made they will still earn you miles under the old distance-based system.

Lufthansa has published a list of things it considers to be “the most important changes” but as I don’t think that list is entirely clear I’m going to put it into my own words.

The new methodology

  • The new methodology for working out the number of miles you will earn for a trip is as follows: Miles Earned = (Base fare in Euros + all airline surcharges in Euros) x a factor based on your status and the airline you’re flying.
  • Fares booked in a foreign currency will be converted to Euros “at the precise time of booking” using the Oanda currency converter.
  • The new methodology will be applied to tickets booked through a Lufthansa Group booking channel or to tickets booked through other channels that issue tickets with a Lufthansa Group airline’s ticket code.
  • Bookings made through Miles & More partners and issued on those partners ticket stock will continue to earn miles under the old methodology.

The “factors”

  • Members of Miles & More with no status will have a factor of four (4) applied to their mileage calculation irrespective of the airline flown.

  • Members of Miles & More with Frequent Traveller, Senator or HON Circle status will have the following factors applied depending on the airline operating the flight(s)
    • Where the operating carrier is Eurowings, Brussels Airlines or another Miles & More partner airline the factor to be applied is five (5).
    • Where the operating carrier is Lufthansa, SWISS, Austrian Airlines, United Airlines, Air Canada, LOT Polish Airlines, Croatia Airlines, Adria Airlines or Air Dolomiti the factor to be applied is six (6)

It is interesting to note that, unlike with the US airlines, there is no differentiation between the various status tiers when it comes to the factor to be applied to the calculation.

Examples

Example 1 – Booking Through Lufthansa & Flying Lufthansa (Economy Class)

On randomly selected dates a Frankfurt – San Francisco Economy Class fare comes to €956.11….

….and books into fare code T:

Current Earnings

Under the current method of calculating the number of miles this fare earns we would use the Lufthansa earnings chart which says that a “T” fare flight earns miles equal to 0.25 x the distance of the flight.

FRA-SFO-FRA is a total of 11,398 miles so the earnings are as follows:

  • Flyers with no status: 2,850 miles
  • Frequent Travellers, Senators and HON Circle Members: 3,562 miles (includes a 25% elite bonus)

New Earnings

Under the new methodology we need to drill down into the cost of the ticket to see what the base fare prices is and what the airline imposed charges are:

The number we need to use in the new formula is €818

  • Flyers with no status: 3,272 miles (€818 x 4)
  • Frequent Travellers, Senators and HON Circle Members: 4,908 miles (€818 x 6)

Amazingly, in this particular example, the new methodology actually earns flyers more miles than before.


Example 2 – Booking Through Lufthansa & Flying Lufthansa (Business Class)

For the same route as above (and on the same dates) a roundtrip Business Class fare comes to €4,260.11….

….and books into fare code “Z”:

Current Earnings

Under the current method of calculating the number of miles this fare earns we would use the Lufthansa earnings chart which says that a “Z” fare flight earns miles equal to 1.5 x the distance of the flight.

FRA-SFO-FRA is a total of 11,398 miles so the earnings are as follows:

  • Flyers with no status: 17,097 miles
  • Frequent Travellers, Senators and HON Circle Members: 21,371 miles (includes a 25% elite bonus)

New Earnings

Once again, under the new methodology we need to drill down into the cost of the ticket to see what the base fare prices is and what the airline imposed charges are:

The number we need to use in the new formula is €4,122

  • Flyers with no status: 16,488 miles (€4,122 x 4)
  • Frequent Travellers, Senators and HON Circle Members: 24,732 miles (€4,122 x 6)

In this case a traveler with no status will earn slightly fewer miles under the new methodology than before while those with status will earn slightly more.


Example 3 – Booking Through A Star Alliance Member & Flying On Lufthansa

Because you’re booking through a non Miles & More airline (e.g. United) nothing will be changing.

Neither Lufthansa nor any of the other Miles & More airlines have access to United’s systems so they cannot see the fare breakdown (i.e they cannot see the split between the base fare, the surcharges and the taxes) so they cannot calculate the miles earned using the new methodology.

Check Your Ticket Numbers To Be Sure How You’ll Earn Miles

Look out for ticket numbers starting with the following codes:

  • 220 (Lufthansa)
  • 724 (SWISS)
  • 257 (Austrian)
  • 082 (Brussels Airlines)
  • Eurowings

Ticket numbers starting with any of the above have been booked with the airlines I’ve put in brackets next to the codes. These are all Lufthansa Group airlines so you will be earning miles under the new methodology.

Thoughts

The purpose of the examples was to show how the calculations will be done going forward and how the new methodology differs from the old – they don’t show anything definitive with regard to how good or bad these changes are.

What we can say is this:

  • Because Miles & More is not a generous program in its current guise the effect of a move to a revenue-based system on mileage earnings is far less than the effect we saw when the US airlines did the same thing.
  • Because of the miserly way the current system awards miles there will be a lot more winners thanks to the changes coming to Miles & More changes than there were when the US airlines went revenue based.
  • If you only book cheap fares (irrespective of the class of travel) you will probably be a net loser under the new system.
  • If you book the more expensive fares you will probably be a net winner under the new system.

Bottom Line

As someone who’s not exactly invested in the Miles & More program (I’m very much on the outside looking in) this doesn’t look to be an overly drastic change….but that’s thanks to the fact that the rewards weren’t great to start off with so Miles & More was starting off at a pretty low-level anyway.

If you’re a budget traveler you probably won’t like these changes but, if you’re a business travelers who generally books last-minute premium cabin fares then this should see you better off.