Air miles should be axed (or taxed) to deter frequent fliers, report advises

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This topic contains 46 replies, has 28 voices, and was last updated by  Polly 1 Nov 2019
at 07:30
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Viewing 15 posts - 1 through 15 (of 48 total)

  • SimonS1
    Participant

    A complex area which needs careful evaluation. In my view FFPs are just one part of this and any sensible review needs to consider:

    1. The impact of FFPs – bearing in mind there are several websites which promote the cheapest tier point runs and multi-flight combinations in order to achieve status
    2. Ticketing policies of airlines – which in many cases incentivise people to make pointless flights on order to benefit from cheaper fares
    3. Other sources of transport which may be more efficient at a domestic level
    4. The impact of taxation and carbon offset schemes

    All of this requires a bit of joined up thinking, long term planning and most likely some unpopular actions. Which means that government involvement could prove a bit problematic since most politicians are a) popularist, b) short term and c) incapable of doing joined up things.

    7 users thanked author for this post.

    MartynSinclair
    Participant

    The question really is: Should Airlines (or companies) be allowed to incentive their loyal passengers (customers) with tax free perks?

    If so, this same discussion may need to be extended to retailers shop points, which provide cash benefits to shoppers. Then we have to consider, do these incentives provide an unfair competitive advantage to companies.


    AJDC
    Participant

    What I would do is to tax redemption tickets at the fare market value or prohibit miles being awarded for tickets booked via corporate booking tools.


    AMcWhirter
    Participant

    I am sure some changes will have to be made to FFPs in the future and especially the issue of ‘status flights’ which was discussed on LBC radio earlier today.

    I wonder how many of you can think back to the time when airline FFPs were launched in the US ?

    At that time govts worldwide detested these schemes and they were outlawed. It was only with the arrival of liberalisation many years later that airline FFPs spread beyond N America.

    In any case clever readers of this magazine circumvented the rules/restrictions decades ago by setting up a US postal address.

    I must point out that at that time foreign airlines (including BA) participated in FFPs but of course you needed a US address.

    Some time ago I recall that the Scandinavian countries wanted to interfere with FFPs. But nothing happened because of the FFPs’ complexity.


    capetonianm
    Participant

    I read the article earlier today. Very ‘Guardianesque’ in its style and thinking.

    I have some sympathy, particularly when considering the utter pointlessness (sorry, pun!) of ‘status runs’. I know several people who do these regularly, and I know some users of this forum do this.

    Choosing airline ‘X’ as opposed to ‘Y’ for a necessary journey in order to obtain or maintain status I can understand. To make a journey with that as its sole objective is absurd but since it is impossible to police, suggesting ‘banning’ the practice is ridiculous.

    “What I would do is to tax redemption tickets at the fare market value”
    This has often been suggested, in the same way as it has been suggested to tax airline employee’s travel perks on the same basis. The problem is to arrive at a value since there are so many different fare types available to the public, but airline employees generally travel on a subject to load basis, and this cannot be compared to a public fare since it is not available to the public.

    Given the hoops and hurdles that have to be jumped through to obtain redemption and staff tickets, I am not sure they should be taxed at all, since the value is greatly eroded.

    I was once asked to work on a project to arrive at the value in the employees’ hands of tickets which had been paid for by the employer but where the FF benefits accrued to the traveller. The only conclusion we were able to reach was that it was impossible to reach a solution. Rather like Brexit!


    AJDC
    Participant

    “What I would do is to tax redemption tickets at the fare market value”
    This has often been suggested, in the same way as it has been suggested to tax airline employee’s travel perks on the same basis. The problem is to arrive at a value since there are so many different fare types available to the public, but airline employees generally travel on a subject to load basis, and this cannot be compared to a public fare since it is not available to the public.”

    Actually, the passes airline employees provide to friends and family members are taxed at the fare market value. It isn’t so difficult to accomplish. I used to work for an airline and my airline did it. Was it annoying? Absolutely, but it can be done and is done by several carriers.


    FaroFlyer
    Participant

    I am sure some changes will have to be made to FFPs in the future and especially the issue of ‘status flights’ which was discussed on LBC radio earlier today.

    I wonder how many of you can think back to the time when airline FFPs were launched in the US ?

    At that time govts worldwide detested these schemes and they were outlawed. It was only with the arrival of liberalisation many years later that airline FFPs spread beyond N America.

    In any case clever readers of this magazine circumvented the rules/restrictions decades ago by setting up a US postal address.

    I must point out that at that time foreign airlines (including BA) participated in FFPs but of course you needed a US address.

    Some time ago I recall that the Scandinavian countries wanted to interfere with FFPs. But nothing happened because of the FFPs’ complexity.

    Indeed I do remember. I am certain that AA was my first FFP, but before that I joined the British Airways Executive Club which, in the mid 80s cost £50 a year and gave you access to BA lounges where you had a little peace and tranquillity, and “free” gin & tonic.

    1 user thanked author for this post.

    capetonianm
    Participant

    Actually, the passes airline employees provide to friends and family members are taxed at the fare market value.

    That only makes sense if those using the tickets can use them under the same conditions as the tickets that members of the public can travel under.

    I also worked for airlines, and the topic came up frequently.

    How can you tax a standby ticket at the same value as a confirmed space ticket?
    If an airline employee has a standby ticket in Y class and gets upgraded to F on his holiday trip, does that ticket then become taxable at the value of an F ticket, and if so at what fare level, full, discount, deep discount, one way, return ….?
    If an employee has a standby ticket, taxed against a value of ‘x’, and he doesn’t get on the flight and suffers consequent expenses, are those expenses deductible from the deemed value of the ticket?

    I could give umpteen further examples.

    It is almost impossible to make a valid comparison, and thus to apply the tax fairly. It’s like comparing apples to lumps of coal, never mind apples to pears.

    2 users thanked author for this post.

    AJDC
    Participant

    How can you tax a standby ticket at the same value as a confirmed space ticket?
    If an airline employee has a standby ticket in Y class and gets upgraded to F on his holiday trip, does that ticket then become taxable at the value of an F ticket, and if so at what fare level, full, discount, deep discount, one way, return ….?
    If an employee has a standby ticket, taxed against a value of ‘x’, and he doesn’t get on the flight and suffers consequent expenses, are those expenses deductible from the deemed value of the ticket?

    I could give umpteen further examples.

    None of your above examples are relevant to what I stated. I stated that the tickets provided by employees to friends and family members be taxed.
    Your examples are for airline employees travelling.
    I don’t know about the carrier you worked for, but the one I worked for had very stringent rules on the class of service friends and family could travel in. If tickets were for economy they would travel in economy; it would be extremely rare for an upgrade to J or F to occur. And once travel had occurred, systems did keep a record of the class traveled in. A very simple matter to reconcile.


    PeterCoultas
    Participant

    When I first started work in the USA while maintaining a UK base the difference between the FF programs in the US and the UK resulted in most of my flights for the next 10 or so years were on Star Alliance. United gave automatic upgrades (if seats were available) to top tier FFlyers while to earn any points on BA you had to fly in business… Another example of how to lose customers with bad management planning… Sadly United are not so generous now and the inter european BA FF flights are excellent but I’d still prefer how it was in the late 80’s an early 90’s


    Ahmad
    Participant

    When I first started work in the USA while maintaining a UK base the difference between the FF programs in the US and the UK resulted in most of my flights for the next 10 or so years were on Star Alliance. United gave automatic upgrades (if seats were available) to top tier FFlyers while to earn any points on BA you had to fly in business… Another example of how to lose customers with bad management planning… Sadly United are not so generous now and the inter european BA FF flights are excellent but I’d still prefer how it was in the late 80’s an early 90’s

    I only had a Blue EC card in the Eighties but it did get me upgraded on full flights all the time. In those days the check-in agent would discreetly tell me to go to a certain counter after immigration and inform the agent there that I have been asked to report to them. Once there, I was either handed a new BP or told that if an upgrade is available I will be told at the gate and given a new BP. Nine times out of ten I got one!

    On SV even though there was no formal scheme, they had ‘AlFursan privileges’ which meant an invitation to the AlFursan Lounge at LHR and waiver of excess baggage charges even when I was twice the limit. No upgrades however. I was introduced to these privileges by the check-in supervisor at T3 after he had seen me enough times. And yes, I miss those days…


    Swissdiver
    Participant

    According to this site, in French, CO2 emissions of the commercial aviation represent 3% of the total, and shipping, 4.5%… Now it is easier to blame the former, as the latter would imply really changing the way we are consuming.

    Attachments:

    capetonianm
    Participant

    It’s slightly more complex than that. The majority of CO2 emissions from shipping come from cargo ships which burn very low grade fuel. Modern passengers ships (cruise and ferry) are very much more carbon efficient.
    https://bellona.org/publication/factsheet-taking-the-electric-revolution-to-the-seas
    https://bellona.org/publication/shipping-goes-electric-a-magazine-by-the-bellona-foundation

    Back to aviation :
    https://www.telegraph.co.uk/travel/comment/british-airways-offsetting-greenwashing/?utm_campaign=Carbon%20Brief%20Daily%20Briefing&utm_medium=email&utm_source=Revue%20newsletter

    British Airways has promised to offset all domestic flight emissions from 2020, while its parent company IAG has committed to net-zero carbon flying by 2050. It’s brilliant, says BA. It’s going to spend £3 million per year on offsets and around £16 million a year on sustainable fuels.

    But this is the worst kind of calculated greenwashing – appeasing passengers and regulators, justifying its continual growth and distracting us from the fact that British Airways isn’t doing what it should be doing: investing properly in clean aviation technology.

    As much as it’s disappointing, it’s not surprising. This announcement is symptomatic of all the things that are wrong with the aviation industry when it comes to reducing emissions in the face of a climate crisis. ………………..


    Swissdiver
    Participant

    You are right, Capetonianm, for a very simple reason: passengers ships are visible, while the the rubbish cargo ships are not…

    The same applies to these “CO2 compensations”, a bit like the indulgences sold a few centuries ago. People pay them to feel good. “Specialised” companies take them, upon a fee of course, and reinvest them in projects that are supposed to be green. The problem lies in the fact they have to incentive to follow them up. The result is therefore close to utter inefficiency. But people feel good about it.

    1 user thanked author for this post.
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