More and more miles: Lufthansa moves to dynamically priced redemptions
Lufthansa's Miles & More loyalty program is switching from fixed to dynamic pricing, with more and more miles required for award tickets starting June 3. While the program has announced these changes to its members as "exciting," the reality is anything but.
The loyalty program of a dozen airlines — including Lufthansa, Swiss, Austrian Airlines, Eurowings and LOT Polish Airlines — will discontinue its reasonable award chart pricing and instead begin pricing redemptions based on the cost of cash fares.
Related: On board the first Lufthansa Allegris flight — was the new cabin worth the wait?
Miles & More dynamic pricing
Rather than a single award fare for each class of service (Lufthansa and Swiss, for example, offer economy, premium economy, business and first class), the loyalty program will offer three different award types for short-haul flights within Europe (Light, Classic and Flex) and four different award types on long-haul flights (Light, Basic, Basic Plus and Flex) operated by Lufthansa, Lufthansa City, Swiss and Austrian Airlines starting June 3.
Under the new system, each fare type will have different baggage, seating, cancellation and rebooking rules and fees. Light fares, for example, will not include checked baggage, seat reservations or refunds, even for Miles & More elite members, making this one of the most restrictive awards any airline loyalty program offers.
This complexity mirrors Lufthansa's 14 different seat types installed on its new Allegris A350 aircraft.
While other loyalty programs, like Virgin Atlantic Flying Club — which recently switched from fixed-price award charts to dynamic pricing — have promised that every seat will be available for redemptions under a new system, Lufthansa will continue to restrict award availability.
The program has not yet advised at what rate redemptions will be tied to cash fares; other programs, like Delta Air Lines' SkyMiles, largely use a 1-cent-per-mile rate. If Lufthansa chooses this rate, it could see first-class flights to Europe priced at 1 million miles each way.
Related: Dynamic pricing vs. fuel surcharges — which is the lesser of 2 evils for your next redemption?
Partner redemptions
The Miles & More program will also adjust the cost of many flights operated by Star Alliance partners (excluding Lufthansa, Lufthansa City, Austrian and Swiss) starting June 3.
For example, United Airlines-operated flights to Europe will change as follows (per person, each way):
- Economy: 25,000 miles (down from 30,000 miles)
- Premium economy: 42,500 miles (up from 40,000 miles)
- Business class: 62,500 miles (up from 56,000 miles)
Flights from North America to South America will change as follows:
- Economy: 25,000 miles (down from 30,000 miles)
- Business class: 62,500 miles (up from 56,000 miles)
- First class: 107,500 miles (up from 91,000 miles)
The program has promised a decrease in the cost of awards within Europe. For example, if you want to fly Brussels Airlines from Heathrow Airport (LHR) to Budapest Ferenc Liszt International Airport (BUD) via Brussels Airport (BRU), the price will drop from 17,500 miles to 14,000 miles each way per person as of June 3.
Miles & More is not a transfer partner of any major credit card program with a transferable currency, so earning miles in the program has traditionally been difficult. But Lufthansa has been generous with releasing premium award seats — including in first class — to partner programs like Air Canada's Aeroplan, and hopefully, that won't change with the new pricing system.
Bottom line
While a major airline loyalty program moving to dynamic pricing is nothing new, Lufthansa's approach seems complex and restrictive. Unless you want to redeem miles for economy-class flights on off-peak dates, as of June 3 you will likely need more miles for bookings and an advanced knowledge of the inclusions and restrictions of the 22 new award fare types.
The Miles & More program has shown little respect for its members in communicating these changes, trying to pretend this devaluation is somehow an overall program improvement for members who may soon be faced with million-mile award seats.
Because of the difficulty of earning miles, the Miles & More program has been of limited interest to many travelers. And once these changes go into effect, it will likely be of even less interest and value.
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There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
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- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.