OPINION: In defence of Air New Zealand's Airpoints auctions

I have read through David Farrar's first-world problem on his blog:

Farrar picked up on a media report:

Air New Zealand is being accused of driving away its most loyal customers with a recent overhaul of its air points rewards system.

In changes set to kick in on May 30, frequent flyers using their Airpoints to book flights on the national carrier will have to bid against each other to get seat upgrades.

Bids can only be placed a week or more out from a flight, with the airline telling people whether their offer has been accepted between three and seven days before departure.

Under the airline’s previous system, Airpoints users could a get an upgrade if they paid a fixed price before a flight and a seat was available.

The changes have sparked outrage among frequent flyers, with many threatening to shift their support to rival airlines.

Then added:

And I am one of them. This is the last straw. I spend a huge amount flying with Air New Zealand – both domestically and internationally. Due to its loyalty programme, I always try to book Air NZ – even if not the cheapest option. Hence I have been Gold Elite or Gold for the last decade or so.

Over that time Air NZ has continually downgraded the value of their airpoints and loyalty programme. Time after time after time they have degraded it. However there was one aspect left that made it worth staying on for – long haul upgrades.

I can not afford to pay more higher than economy class to travel overseas. However I regularly use airpoints to purchase upgrades so that I can escape cattle class. Now Air NZ is destroying the benefits of having gold status with them.

I will call it a rant as David is a fair and moderate blogger and to headline "You Bastards" is unfair and an over-reaction.

He never seems to get this worked up over the left wing of politics. Which makes it even worse.

I have now read the new Air NZ terms and conditions and Airpoints redesign. It won't change my life much at all.

I do a bit of travel. Probably far more than David just given the nature of my job and holiday plans. On this matter I disagree with David as to the Air NZ scheme changes, reasons follow:

1. Airpoint hoarders are a balance sheet liability. Rather like those who accumulate annual leave and expect it to appreciate with their salary. Air NZ has to accumulate provisions on their books. My general theory is use them asap as they only can devalue. Either the airlines make them harder to earn or they up the price of their benefits. They all do this. I can't remember a large overhaul of the Air NZ system in a long time.

2. Upgrades mean you haven't bought and paid for business class. I travel business pretty much all the time and have only twice paid for upgrades with status points. I managed once (by sheer miracle) to use Air NZ's complimentary upgrades. You can't use these in NZ as its economy only. While business pays for my business class travel, I am wealthy enough now to pay for business class myself, as is David if he's honest with himself. As are many people who say that business is too expensive. I now pay for my own business class holiday travel. I can handle economy if there's no other option or the flight is 3 hours or less, anything over that I struggle turning right unless its to get upstairs. Thai is good for business class short haul, it is not much more expensive than economy.

David flies Air NZ in NZ all the time because he has to. That is, all those little economy flights in NZ add up and he cashes in on long-haul upgrades. Problem with that is he's buying an economy ticket. He rightly points out there is a large difference between economy and business airfares. Therefore the cost of that upgrade is larger.

3. David has conveniently forgotten the benefits of Gold and Gold Elite - Koru lounge use and extra baggage. Not to mention priority seating and that you get treated better at check-in. That was unfair. Who doesn't like the jetplanes?

4. Auction systems mean people may very well pay less for an upgrade than they currently do in airpoints. Anyone who can work Trademe will understand this. I would have to use the auction to see how it works but you can't really lose as you still get to fly don't you?

5. Nothing better. David seems to be threatening to switch to another airline reward system. Where? If he's buying economy tickets for long haul anywhere they accumulate precious few points. He has to use Air NZ as all the short haul NZ flights he's doing in the working year are (like they do with MPs) the fastest way to earn status and points.

6. High value customers. These are not people who fly economy they are those who pay full fare business class often. When I'm sitting in business I would rather there was a spare seat behind and in front of me than someone being upgraded who doesn't want to pay for it. Too often there's a bloke behind me who insists on kicking the back of the seat or moving around too much. Not to mention the incessant snorers who ruin the flight or loud pissheads flirting with the air hostesses. Then there are the Ma and Pa's from the UK who can't use the seats and generally require the effort and attention from the waitress as would a small infant with a parent.

Air NZ I would hazard a guess is full of business from public sector workers and troughers with infinite amounts of points from flying short haul economy up and down the bus from Auckland to Wellington.

As a taxpayer owned and bailed out airline perhaps they'd be far better off financially to disallow point and status accumulation for all travel paid by the taxpayer. And cancel all public sector Koru membership to clear the lounge out for private sector paying customers.

Until then if you are relying on upgrades from economy from any airline because you fly on them a bit and pay economy fares I have just one word of advice for you:

Try actually paying for business class.

Until then, suck it up and sit with the people who aren't in business class because, despite your protestations, you are one of them.

Cathy Odgers is a Hong Kong-based tax lawyer. She blogs as Cactus Kate.