Some frequent flyer schemes have millions of members but working out which scheme is best can be a complicated affair. Photo / Robin Utrecht, ANP via AFP
A loyalty scheme study has poured scorn on Air New Zealand Airpoints, but the airline says its scheme is straightforward and it’s working on innovation.
The study from Australian Frequent Flyer said Qantas, Qatar Airways, Virgin Australia, Singapore Airlines, Emirates and Etihad provided more value per point than Air New Zealand’s scheme did.
“We did primarily set out to calculate the value of a frequent flyer point from an Australian perspective,” said Matt Graham, Australian Frequent Flyer editor.
“So, the findings are perhaps slightly less relevant to New Zealanders, but not totally irrelevant either.”
Graham said it was easier for Kiwis to earn Airpoints Dollars in New Zealand, especially from credit cards, flying and shopping, compared to earning points with many other programmes considered.
“So, while we definitely do consider Airpoints to be less valuable than points in other frequent flyer programmes, it might not be easy for New Zealanders to actually earn significant points in those more valuable overseas programmes.”
The study from Graham and his colleague Wilson McTaggart was picked up by national newspaper The Australian.
But Air New Zealand said Graham and McTaggart’s analysis did not outline numerous benefits and options available to customers based in New Zealand.
“Our loyalty programme is designed to deliver a rewarding and valuable experience for our members,“ Air NZ general manager loyalty Alex Larsen said.
“We offer dozens of ways to earn and spend Airpoints dollars with competitive earn rates across banking, retail and directly with Air New Zealand.
“We also like to keep things simple and transparent for our members and that’s why we take the guesswork out of how much an Airpoint dollar is worth.
“One Airpoints dollar is equivalent to one New Zealand dollar.
“You can spend your Airpoints dollars on all Air New Zealand flights, along with any item on our Airpoints store, or use a combination of Airpoints dollars and cash with FlexiPay, perfect for when you want to redeem your points but don’t have enough to cover the full cost.”
He said the airline had 4.8 million Airpoints members and was working on several innovations.
Air New Zealand said its actual credit card reward points converted at a range between 70 to 1 and 150 to 1.
“For example, the ANZ Airpoints Visa Platinum card has an earn rate of $110 for one Airpoints dollar, Westpac’s Airpoints Mastercard has an earn rate of $150 ... and the American Express Platinum card has an earn rate of $70 for one Airpoints dollar.”
Graham said many frequent flyers considered Air New Zealand’s Airpoints programme to be uncompetitive compared to international programmes.
“One of the main reasons for this is that it treats its points like cash, with one Airpoint being simply worth $1 when redeeming on Air New Zealand.”
He said that limited opportunities to get the “outsized value” from Airpoints that some other frequent flyer programmes had.
Graham also said the hard expiry of Airpoints, which expired after four years even if one’s account was active, was “very consumer-unfriendly”.
Airpoints dollars for people with Air New Zealand’s Gold or Elite status, or with an Airpoints-earning credit card, do not expire.
But Graham said Australian Frequent Flyer regarded Airpoints as poor when it came to the points’ expiration policy.
“It uses dynamic pricing for many of its redemptions, so the number of Airpoints you need to book a flight is not fixed,” Graham said.
Etihad and Emirates also scored relatively poorly in his study because many flight redemptions he reviewed cost a high number of miles and had high surcharges, compared to other airline programmes.
“In my view, it seems Air New Zealand feels like it doesn’t really need a competitive loyalty programme because many Kiwis are stuck with it and will continue to use it anyway.”
But he also said many loyal Air New Zealand flyers undoubtedly valued Airpoints’ elite status.
“And Air New Zealand does look after its most frequent flyers very well. But as a complete package, the Airpoints programme is just not that attractive.”
A Consumer NZ study last month said for people putting at least $20,000 a year through their credit card, the best card to get free flights was American Express Airpoints.
It said that card would get a person up to $400 towards flights over two years.
For people spending $50,000, the best card in Consumer’s opinion was Amex Airpoints Platinum.
“If you’re able to spend this much on your credit card each year, you’ll earn $1900 towards flights over two years,” Consumer NZ said.
“But it’s by collecting points you can turn into trips rather than with Airpoints.”
In May, Kiwibank said it was phasing out its Airpoints credit card rewards, citing increasing costs and regulation changes.
Interchange fees paid on transactions, charged by issuers to a merchant’s bank, were cut in 2022.
The Commerce Commission introduced new pricing standards but Kiwibank said that meant some increased costs were passed on to cardholders and issuers covered a big portion.
Those Kiwibank cardholders can earn Airpoints until October 31 and will then be moved to the Kiwibank Platinum Visa card automatically.
Last November, data showed Air NZ’s Airpoints had been growing at about 11% a year.
The airline then said it introduced more perks, and partnerships such as Everyday Rewards.
John Weekes is a business journalist mostly covering aviation and court. He has previously covered consumer affairs, crime, politics and court.