In another warning that frequent flyer schemes are plunging back to earth, the Singapore girl has cancelled future life memberships of its lavish and exclusive PPS Solitaire club.
From September 1 it’s all over for anyone who falls short of logging1,875,000 miles in first or business class over years if not decades of loyalty to Singapore Airlines or its Silk Air subsidiary to achieve the frequent flyer equivalent of Nirvana.
After that date, and even if one is among the thousands of ‘loyal’ Singapore Airlines customers who are sitting on more than 1.5 million miles bought with their own or their company’s money, no more Lifetime PPSs will be created.
Chew Choon Seng, the Singapore girl’s CEO, has declared the program unsustainable.
Apart from existing lifetime PPS members, the lower tier PPS and the more numerous riff raff in the normal Krisflyer program will see their hard won levels of ‘status’ under the current terms of their memberships busted to the equivalent of a bronze Qantas FFP membership if they fail to pass annual spending tests (minus taxes, charges and levies) of around $SIN 25,000 in premium cabin tickets in a 12 month period.
(Existing PPS members should throw down a stiff gin and tonic and digest the full extent of the calamity under ‘changes to the program’ on the Singapore Airlines’ web site. You will also be denied access to the first class lounges while flying business class.)
There is already a whiff of treasonable dissent in Singapore. The nanny state’s Business Times reports that high profile business identities and professionals are threatening a class action against the Singapore girl.
It quotes a former and perhaps soon to be stateless and penniless banker as saying “We paid a premium to fly SIA in the belief that we would eventually reach Shangri-La. The court action will be to seek compensation.”
But Qantas frequent flyers shouldn’t smirk too much. The Qantas scheme has been ‘enhanced’ downwards several times in recent years, while its members have seen even worse happen to their rewards if flying on some types of fares on oneworld partners American and British Airways, or its own Jetstar.
United recently announced it would cancel all memberships and points balances that had been inactive for 18 months.
Worldwide, FFP schemes are in a crisis the card companies, carriers and banks hope the media will ignore.
The airlines, and would be Qantas owners APA, are being torn two ways. Selling QF points to hotels, household appliance retailers, mortgage brokers and credit card reward schemes brings in hundreds of millions in extra revenue, all of it for ‘brand’ value, and none of it costing a dollar in fuel, airport charges or piloting, engineering, maintenance or cabin attendant salaries or their on-costs.
But the Reserve Bank credit card reforms wrecked the previously generous schemes that were subsidised by merchant fees and inter bank fees for points earned on Mastercard and Visa card transactions, and international accounting standards interfered with the balance sheet recognition of third party points sales and the treatment of the liability of unredeemed points that hangs over all point giving carriers.
Read the fine print of your FFP memberships carefully.
Every frequent flyer scheme on the planet contains the same increasingly attractive escape clause for the airlines. One that says that schemes and their points can be varied or terminated with little or no warning and with no compensation.