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Ansett flyers to be rewarded for loyalty

 
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Old 22nd Jan 2002, 19:37
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Post Ansett flyers to be rewarded for loyalty

Wed "Melbourne Age"

Ansett flyers to be rewarded for loyalty

By DARREN GOODSIR. .Wednesday 23 January 2002. .More at: Ansett crisis. . . .Ansett's 2.7 million frequent flyers will not have their frozen points revived, but the new airline will offer lucrative bonus points to woo them to join its rewards scheme.

For the first few months of operation, Melbourne businessmen Solomon Lew and Lindsay Fox will offer better access to free flights in recognition of previous loyalty and the points Global Rewards members accrue will be multiplied by a factor, as yet undecided, in the new scheme.

About 70 billion points were suspended when Ansett was grounded in September. But rather than return a percentage of the lost points as an act of good faith to recapture customers, the Tesna syndicate - which is poised to take control from February 1 - wants to offer this "loyalty loading".

According to those close to the Ansett sale, the bonuses will dwarf those offered by Qantas, the only domestic rival with a frequent flyer program, which has one offer at present of 1000 bonus points for booking online.

"We are not talking about recognising any liability, although we understand there is an expectation that we put up a deal," the source said.

"Things are still being finalised, as a balance needs to be found between a marketing dimension and the financial reality of assuming such a liability. But it will be a very attractive offer."

Agitation over the fate of the Global Rewards points has grown since Ansett's administrators, Mark Mentha and Mark Korda, last week gave the 70 billion points, or 27,000 on average for each member, a monetary value of $140 million. Using the old airline's redemption calculator, this translated into 4.1 million return economy flights to Sydney.

Conservative estimates put the unfunded liability at $750,000 to $1.25 billion. But the administrators have calculated each point to be worth about 0.2 cents. With the estimate of a return of five cents to unsecured creditors, the average points holder would receive only $54.

But the Tesna syndicate, although not legally liable to take on the burden of unredeemed points, understands it needs to offer attractive rewards to their Global Rewards members to survive.

Diners Club, which is in talks with Tesna about the new scheme, is advertising for a proxy vote for cardholders who lost points.

The administrators have not yet approved the weighting to the votes that frequent flyers will have but, regardless, it is unlikely they would form a bloc big enough to vote down the sale to the Tesna group next Tuesday at Vodafone Arena.

Another disgruntled credit card provider, Westpac, and a South Australian law firm, Corsers - representing more than 300 six-figure point members - are contemplating legal action if the administrators do not improve the $140 million assessment for the lost points.

Virgin Blue, which has avoided a frequent flyer scheme, yesterday offered 20-cent return flights to Melbourne to up to 60 Global Rewards members "to help these creditors to have their say" at the creditors' meeting.

The offer, designed for 10 people from six destinations, is available to members with a minimum of 25,000 points, the average amount required by Ansett for a return domestic flight.

- with STATHI PAXINOS
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Old 23rd Jan 2002, 03:12
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[quote]But the Tesna syndicate, although not legally liable to take on the burden of unredeemed points, understands it needs to offer attractive rewards to their Global Rewards members to survive. <hr></blockquote>

Tesna (FLEW) has fought, tooth and nail, to gain control of Ansett - no doubt hoping to regain many of its former, regular passengers - yet is reneging on frequent flyer points. . .The reason WHY most people become RETURN CUSTOMERS.

Tesna, by their latest statement, have virtually made these points ABSOLUTELY WORTHLESS (2 cents per point, was the figure I saw quoted), yet now are stating:. . [quote]the new airline will offer lucrative bonus points to woo them to join its rewards scheme.<hr></blockquote>

An exercise in futility, and one NOT likely to "woo" customers, as they have shown that these "lucrative bonus points" can be marked down to near zero when it suits THEM! <img src="mad.gif" border="0">
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Old 23rd Jan 2002, 04:00
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FLEW seem to be unaware of a basic business principle - it costs less to keep existing customers than to try and entice new customers. Honour the frequent flier points and 2.7 million people become existing customers. Don't honour them and the airline is stuffed.
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Old 23rd Jan 2002, 14:58
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At the risk of repeating myself yet again - there has NOT been an official decision as to what is or is not happening to bloody frequent flyer points. At least wait for an official announcement or notification before chucking your toys out of the cot.
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Old 23rd Jan 2002, 15:05
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As one who renewed his Golden Wing membership two weeks before the big day, where do GW members stand in the pecking order?
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Old 23rd Jan 2002, 15:25
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I've got 60, maybe 80,000 points, not all were gained riding on AN aircraft, some just by using the credit card. I like like to see the underdog get up and kick some serious but, BUT I CAN TELL YOU IF THEY DO NOT HONER THOSE POINTS I WILL NOT RIDE ON AN ANSETT AIRCRAFT AGAIN.

A deal is a deal and nothing else. I stick by my word and I expect others to do the same. Ansett look after your customers, remember, you need us more than we need you! <img src="mad.gif" border="0">
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Old 24th Jan 2002, 01:20
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Well said. Actually whether Global Rewards points were accrued by flying Ansett or by using the credit card to buy groceries is irrelevant. Diners and Westpac bought the points off Ansett to distribute to their customers on the understanding that they could be redeemed for flights. Card holders paid Westpac & Diners for those points by way of fees and higher interest rates. Found an interest site the other day where Global Rewards members were discussing whether or not to support the FLEW sale. Feeling among posters was that they were legitimate creditors and had paid for those points. A deal's a deal.
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Old 24th Jan 2002, 01:36
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A mate of mine has over a million FF Points and will never fly Ansett MKx again!
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Old 24th Jan 2002, 12:50
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I would not be surprised if there was pressure from other Star Alliance members for these points to be honoured as we were also their loyal customers. If there is a boycott of AN in favour of QF, One World stands a gain.. .Some people seem to be under the impression that reward taken with another carrier cost AN nothing. I am sure the members within the various groups have an interline settlement scheme for points similar to that for their cash customers.
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Old 24th Jan 2002, 13:40
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Sorry, but I'm going to upset the apple cart here.

Why is it that people expect so much from loyalty programs? Perhaps it's just greed. Something for nothing. Now, before you all mash the keyboards trying to type faster than you can curse, what amount of cash have you dispensed with to deserve such claims? Sure, the GW paid for their membership & deserve reimbersement for those fees, but they received exclusive access to certain perks like the lounges etc.

All it is is loyalty. It was freely given in exchange for the opportunity to redeem points for free flights. Perhaps you imagine that you are paying higher fares for those points, wrong. Perhaps you didn't even pay for the ticket, your company did. All along it was your choice to get the Diners card or whatever, knowing full well that you were paying higher premiums, but you thought you were going to get MORE FOR FREE. It's a sad endictment on society that everyone wants something for nothing.

Years ago you flew AN or QF because you preferred one to the other. Stupidly, the airlines followed the US example and introduced these schemes, much to their detriment.

I'm sorry for those that have expected such extraordinary amounts of free flights and I feel that FLEW should do something to alleviate the angst that is shown by persons who have lost points. What that is, I don't know, but remember, FLEW could've picked up a carcass & turned it into an airline & there would've been no need for them to even consider these points. It wouldn't have been their problem.

At the end of the day, it will again boil down to choice. You'll either go to QF or the new AN, but you'll still expect something for nothing. I can hear it now; "I want an upgrade." "I want passes to the lounge for all my mates." ("I want my bags!" <img src="wink.gif" border="0"> )
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Old 24th Jan 2002, 14:30
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Because Buster

The public could have gone either Qantas or Ansett. For those that went Ansett they have on average lost a Perth Sydney return flight which would now cost between $400 and 600. Which is big bickies for some families.

I lost around 60000 points and have now been transferred across to Qantas.

Buster what planet are you living on. Something for nothing? Those points were earnt in good faith and now worthless. I bought everything on bloody credit to get these points and I was able to take my family on holidays on a confirmed seat on the cheap.

But at the end of the day whom ever offers the cheapest seat the public will buy from. You only have to go to all 3 web sites and search the cheapest seat on the day you wish to travel. None of the airlines except Virginblue deserve any form of loyalty. I am part of the Q group and I will always continue to support either Ansett or VB. Because without at least 3 airlines, travel in this country is going to be expensive which in turn affects local economies.
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Old 24th Jan 2002, 15:47
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What are everybody doing saving their points. I can't believe someone would have 1,000,000 frequent flyer points, and not a few times at least cashed them in. Its like buying something and putting it in a cupboard and then leaving it there for a few years. By the time you take it out of the cupboard its old and obsolete.

I can understand saving something for a rainy day but why do people keep them instead of using them.

I agree with Buster on this one. Everybody wants something for nothing.

Some recognition of prior travel will be required by Flew to get back passengers.
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Old 24th Jan 2002, 16:37
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I'm sorry for you nipilnibla. As I am sorry for all those that have lost out here.

If someone has a FF agreement, could they answer me if their is any clause such as; "..until the airline decides to stop the program." or something to that effect. I bet there is a get out clause for the airlines, regardless of who it is.

I'm pretty sure KAH is on Earth, but I digress. Yes, your points were earned in good faith, perhaps the only reason you flew AN was because of what you'd get out of AN... [quote] confirmed seat on the cheap <hr></blockquote>
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Old 24th Jan 2002, 16:38
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Boys. .Its got nothing to do with getting something for nothing, this was a fair dinkum business arangement. A deal if you like. We were promised something in return for flying AN or using your card. They have now reneged on the deal. No different to somebody buying your secondhand TV set, taking it away, then refusing to pay you.

I dont like being diddled. I'll have the pleasure of flying VB from now on! Along with a lot of other cheesed off ex AN folk i'll bet.
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Old 24th Jan 2002, 20:07
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Fri "Melbourne Age"

Deadline stretched for vote on Ansett sale

Friday 25 January 2002

Ansett's administrators have bowed to pressure from the airline's creditors to extend the time for lodging proxy votes after complaints of jammed faxes preventing lodgement by yesterday's 4pm deadline.

Administrator Mark Mentha said the deadline was extended to allow as many of the airline's three million-plus creditors to make their wishes known.

The extension came after Diners Club issued a statement saying many of its members had difficulty gaining access to forms on Ansett's website and faxing administrators to lodge their forms.

Ansett creditors will now have until 10am on Tuesday to register a proxy vote.

Diners Club's general manager, sales and marketing, James Atkins, said the charge-card company had been flooded with proxy forms from its 300,000 frequent-flyer members.

He also said the proposed method of voting to approve the sale of Ansett's intercapital routes to the Tesna syndicate would disadvantage Global Reward points holders.

The administrators intend to call for a show of hands on a one-person/one-vote basis. All proxies sent to Diners Club would therefore amount to only one vote.

Diners has threatened Federal Court action to postpone the meeting.
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Old 25th Jan 2002, 03:47
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Buster,. .the reason that people use the cards and fly the one airline is to accrue the points to use at a later date as a . .quote:. .--------------------------------------------------------------------------------. . confirmed seat on the cheap

without the lure to keep using the same card/carrier the pax will use their discretion and we all realise this usually equals the cheapest fare.. .most people don't care the name on the side of the plane, they just want to get there. in this example, AN lured pax with points for free stuff, the pax accepted the offer and put their cash up, and now AN can't/won't hold up their end.

they do have the right to the free stuff (earned in good faith), and they also have the right to be p!ssed off at not being able to access it.

BTW many were annoyed at access BEFORE AN fell over.

[ 24 January 2002: Message edited by: huntsman ]</p>
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Old 25th Jan 2002, 05:27
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What some GR members are asking for is treatment preferential to every other creditor of AN. These legitimate creditors are only getting 5c in the dollar but FF members say "Oh, we are more important than that, we deserve 100c in the dollar!" I ask why?

Sure, take your business elsewhere if you feel that will sooth you but under no circumstances can you argue your claim is in any way superior to legitimate trade creditors, many of whom are small businesses who not only lost money on their outstanding bills with AN but also lost one of their major customers.
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Old 25th Jan 2002, 05:51
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1A,

it's not about the money value. To me, it's a loyalty thing.

I was loyal to them, they are not being loyal to me. If the points carried over to AN Mk 2, and I could use them at some future point in time (under similar restrictive rules that apply now) I'd be happy. For them to say tough luck...well that's my answer too.

. .Some time ago, my "company" changed from using Ansett for internal travel to Qantas. Ansett, in a show of appreciation for our memberships/support at that time, gave us a year's free membership to Golden Wing and FF. I'm sure that prompted a few guys (I know I did it) to use Ansett during that time for personal travel.

As I said, it's all about loyalty.

They don't intend to honour my points/be loyal to me?

I'll fly with someone else.
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Old 25th Jan 2002, 06:24
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I'm (as usual) a bit confused about the use of the word "loyalty" in relation to the concept and value of FF points around here.

From where I sit it's very simple, and I don't have ANY AN points, but I have converted shedloads from other airlines over the years for REAL value.

1. The points were not GIVEN to the passengers, they were BOUGHT by them as part of the contract between them and the carrier. . .viz. I want to go from here to there, the carrier says OK if you fly with me it will cost X and in addition I will attach a coupon with FF points on it that will be redeemable under certain conditions at some time in the future.

2. The passenger accepts the offer, pays the consideration, the service is provided and the contract is now completed the coupon issued and attached and has real value as an asset to the purchaser and becomes a liability at some future time to the carrier.

And remains so for the term of the issue rules.

How simple is that?

If the carrier gets it wrong and incurs a liability that is beyond its capacity to redeem, then it's the carriers error of judgement not the purchasers. . .It's the same as selling a bond with interest coupons attached with the proviso that it may or may not be paid on the whim of the issuer, scuse me, but who would buy one of those.

So what if the carrier or issuer goes belly up because of serial errors of judgement. The coupon remains as a liability to the issuer

Unless the carrier made it a condition of purchase of the ticket that the coupon would be valueless in the event of their demise, they are stuck with it, but who would buy that?

Whether the carrier was ever able to redeem all of the coupons it issued, or was taking an actuarial position, they were nonetheless isssued bought and paid for and provision made by the carrier with their partners for the redemption thereof.

YOU bought and paid for them, YOU are entitled to their FULL value regardless of whether the airline no longer exists.

Their value is certainly more than the insultingly low value of was it 2c in the dollar. . .Insulting becasue the administrators think you'll fall for it throw your hands up in the air in disgust and not bother to vote.

So anybody want to explain to this simple Virgoan why this is not so and why you should not register your vote directly or by proxy and complain loudly.
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Old 25th Jan 2002, 07:49
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Gaunty FF points are not like bond coupons, the courts have ruled they are like unsecured creditors and in AN's case it looks like unsecured creditors are going to get about 5c in the dollar.

Yes, there is a question as to the value attached to the points by AN. Some say it should be as much as 0.7 cents per point whilst currently the administrators are valuing points at 0.2 cents. This is an argument worth having but whatever they turn out to be valued at, FF holders (of which I am one) should only get 5 cents in the dollar back.

Tesna may decide to throw some inducements at previous points holders which may or may not appease previous GR members but they are under no compulsion to do so and whatever they decide is a MARKETING/FINANCIAL decision not a legal one.

Your further argument that the coupon added to the ticket is one which would probably fail on the basis of no value in the consideration given. This is because an airline sells a particular class of ticket for the same price regardless of whether the purchaser is a FF member or not. On this basis it can only be assumed that no value can be attached to the FF points granted as part of this transaction.
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