Air NZ introduces 'airpoints dollars'

1.00pm

Air New Zealand today announced a revamp of its Airpoints scheme, which will allow members to book any seat on any Air New Zealand flight.

Managing director and chief executive officer Ralph Norris said Air New Zealand Airpoints Dollars would replace Airpoints as the programme currency and could be used like cash when booking seats. One Airpoints Dollar will be equivalent to one New Zealand dollar.

Although travellers will earn less of the loyalty points on long haul flights, they will get greater reward from short flights most domestic flights and Tasman and Pacific Island fares.

The existing programme rewards Airpoints based on distance flown rather than the fare paid, but the new scheme will focus on money spent on travel.

The airline said more than one million of its customers were Airpoints members, with 780,000 living in New Zealand.

On November 16, all members' existing Airpoints balances will be converted to Airpoints Dollars with 75 Airpoints equating to one Airpoints Dollar.

Mr Norris said the new programme was designed to reward frequent flyers more fairly.

He said that under the current scheme, an Airpoints member paying $2400 for a discount economy return flight to London would receive 26,966 Airpoints -- enough to reward them with a return domestic flight and almost enough for a return trans-Tasman flight.

But a frequent domestic customer would have to fly return between Auckland and Wellington 14 times at a cost of at least $3900 to earn the same points.

At present there are few seats allocated for Airpoints and customers could not access them on many of the cheap flights available. On the old scheme travellers had to have enough points for a return fare whereas the new scheme allowed a single fare to be purchased with points. However, a fare cannot be paid with a mixture of Airpoints Dollars and currency.

Air New Zealand is dropping its relationship with American Express whereby spending on that credit card earned Airpoints. However, it said there would be enhanced benefits from BNZ's Global Plus card.

Air New Zealand denied it would be harder to earn points. It said 61 per cent of flight redemptions would require fewer equivalent points to purchase the lowest fares and 15 per cent of redemptions would require the same number of points.

"Overall, the number of Airpoints Dollars required at the lowest published fare to obtain the flight redemptions taken in the past 12 months will be an average 6 per cent less than the equivalent number of Airpoints required under the old programme."

Air New Zealand carries around $200 million of liabilities on its balance sheet as a result of the current scheme and that will not change much under the new one. There would be a "small" one-off cost to the airline in the changeover.

Accounting firm PriceWaterhouseCoopers said it had audited the change and it stated the conversion rate to the new scheme was "fairly stated".

- NZPA