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Home » Etihad » Etihad Destroys Loyalty Program With Punitive Cancellation Fees
Etihad

Etihad Destroys Loyalty Program With Punitive Cancellation Fees

Matthew Klint Posted onFebruary 23, 2024February 22, 2024 17 Comments

a group of women in uniform

A word to Etihad: your new punitive cancellation fees for award tickets will drive away most people from your loyalty program, especially those you want to be loyal. This isn’t about gaming the system: it is about the fundamental value of booking a mileage ticket.

Etihad Undermines Loyalty Program With GuestSeat Award Cancellation Fees

Etihad announced it would be retooling its Etihad Guest loyalty program in June 2024, promising most awards will drop in price. Sounds promising, right? But Etihad added two negative changes effective immediately and one is a dealbreaker. First, miles will be valid for 18 months and can now only be extended through a qualifying flight with Etihad or a partner airline (currently, any mileage activity, such as a credit card transfer, reset the 18-month period).

That’s not ideal, but not a dealbreaker.

The dealbreaker is a punitive new cancellation scheme that severely penalizes you for canceling a GuestSeat reward (saver seat) at the last minute and even well in advance.

Effective immediately, you’re eligible for a refund up to 24 hours before your flight departure date. The following charges apply:

  • You’ll be charged 75% of the fare (i.e. 75% of the miles spent) if you request to cancel within seven days of departure
  • Cancellations 8–21 days before departure will be charged at 50% of the fare
  • Cancellations more than 21 days before departure will be charged at 25% of the fare

The previous policy was a blanket 10% of the fare charge as long as the reservation was canceled within 24 hours of travel.

This policy does not apply to tickets booked on or before February 21, 2024.

While many carriers have moved in the opposite direction and eliminated fees, Etihad’s draconian new fees run in the very opposite direction.

Does Etihad really think this will make people more loyal? Does Etihad really think people are just going to accept this policy and continue program engagement at the same level?

I think the answer is NO WAY.

Plans change. Award tickets, even booked at the saver level, should not (nearly) worthless if you are not able to travel.

What Etihad has done here is essentially make GuestSeat awards like basic economy tickets…

The advantage Etihad has over its partners is that it releases more award space to its own members, particularly more than 30 days in advance. But if you book 11 months in advance and decide the next day that you cannot travel, you’ll forfeit 25% of your miles off the top.

Discerning travels will no longer credit any Etihad flight to Etihad Guest…

CONCLUSION

When I received news yesterday that Etihad Guest would be lowering many redemption rates and “improving” the program, I was optimistic…there is so much potential for Etihad to innovate and distinguish itself from Qatar Airways, Emirates, and other competitors in the region.

But this change is a dealbreaker. I won’t use Etihad miles any longer (and I have for both Etihad and Air Serbia in the past). I will still fly Etihad (a great carrier), but any miles will be credited to a partner airline.

What a sad development. Hopefully, Etihad will reconsider…


(image: Etihad // Hat Tip to One Mile At A Time for noticing this change)

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About Author

Matthew Klint

Matthew is an avid traveler who calls Los Angeles home. Each year he travels more than 200,000 miles by air and has visited more than 135 countries. Working both in the aviation industry and as a travel consultant, Matthew has been featured in major media outlets around the world and uses his Live and Let's Fly blog to share the latest news in the airline industry, commentary on frequent flyer programs, and detailed reports of his worldwide travel.

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17 Comments

  1. Malik on Wall Street Reply
    February 23, 2024 at 7:56 am

    Some programs that I know of that used to have a similar scheme where they would penalize customers who cancelled award tickets have mostly dropped that scheme by now or have reduced the penalty a lot because they realized it’s not good for business and having dealt with covid. It sort-of feels like they’re shooting themselves in the foot again.

  2. Felipe Reply
    February 23, 2024 at 8:35 am

    The thinking behind this is actually pretty easy to understand, just look at where Antonoaldo Neves (Etihad’s CEO came from): both TAP Portugal and Azul Airlines have awful FF programs, with terrible redemption rates, high fees, little flexibility, etc. And even so, they’re quite popular with the uneducated travellers in their home markets.

    • Stuart Reply
      February 23, 2024 at 9:02 am

      Why should TAP give away free seats too easy? In fact, because they don’t they can sell them fairly in comparison to other European carriers. No one flew TAP when their J cabin was the same as, say AF. But now many use their flights via LIS now because they often offer $1400 J class, even at the last minute. TAP has been transformed as a result,

    • Jerry Reply
      February 23, 2024 at 1:57 pm

      TAP and Azul also fly to markets people want to travel to. Azul is probably the nicest Brazilian carrier, and TAP has no directly comparable competitor. Nobody wants to go to AUH, so their model is built on connections and their competitors are QR and EK.

      • Stuart Reply
        February 23, 2024 at 4:59 pm

        Very unsure of what your point is…

        First, connectivity to the Indian subcontinent and Asia from Europe and the U.S. is a massive market for EY, as with the other carriers. And they offer wonderful seamless connections in a beautiful new terminal. Many find their service is wonderful – as do I.

        Second, Abu Dhabi is a growing and significant market for business and leisure travel. You make it seem like it’s an outpost in the desert, lol. It’s a thriving city, the center of Govt in the UAE. As well having a myriad of luxury beach resorts that are brimming with Europeans during the winter months. In fact the Park Hyatt there is, in my opinion, one of the finest Park Hyatts in the world. Go there over Easter break…it’s packed with French and Germans.

        Finally, TAP has every airline in the EU, U.S. and South America as competitors. TAP could not survive as a point to point carrier. They rely on feeder connections in LIS to be viable. They have now figured out that formula in that they can’t compete head to head at the same price as AF, BA, or LH. So they restructured to offer premium cabins at often half the price of others, especially between the U.S. and European destinations outside Portugal.

    • PM Reply
      February 23, 2024 at 4:53 pm

      TAP is a really interesting example. It’s difficult to find award availability for their keenly priced transatlantic routes, but you’re likely to have more luck if you’re heading South. Business class to LAD certainly isn’t priced at $1400 return.

      • Stuart Reply
        February 23, 2024 at 5:03 pm

        It is often priced between markets like VIE, FRA, MUC, and others to IAD, with connections in LIS, at around $1400. Sometimes more during peak periods, while I have actually seen less in winter. If you price only from LIS it’s much more. But connections from other cities in Europe can be a downright steal. This is one way…but often just a few days out as well.

        • PM Reply
          February 23, 2024 at 5:43 pm

          That’s true – but my point is you can’t get that sort of price from anywhere in Europe to lusophone Africa – principally LAD and MPM (Cabo Verde and Sao Tome mostly get narrowbodies, flight takes about 4 hours). On those routes they are happy to charge the oil, gas, and UN/NGO crowd an arm and a leg while having seats go empty or making them available for awards.

          • Stuart
            February 23, 2024 at 10:06 pm

            You are identifying primary markets for Portuguese speaking destinations with limited service that are high demand from LIS. Of course they will be more expensive. But outside those markets TAP is really reasonable in J.

  3. Stuart Reply
    February 23, 2024 at 8:59 am

    Good. This prevents miles junkies and bloggers from hoarding speculative bookings and keeping the rest from finding seats. As well, curbs the brokers in India and China. Speculative bookings have spread like a virus. You hear about one blogger with many bookings in JAL F to try and snag the new F and everyone starts doing it. They then cancel them all at the last minute. Which is why we only see space open the last few days before travel. How many people book J in LH only to cancel an hour before when an F seat opens up? How many jump on speculative bookings when there is an offering (like QF last year in F) yet end up canceling months later?

    I see this as a HUGE benefit for freeing up award space and getting rid of trip hoarding. As well it probably helps to keep paid J fares down a bit given better yield management. I hope all the carriers consider this right away. We will live in a much happier world as a result.

    • Jan Reply
      February 23, 2024 at 12:02 pm

      Thanks for that perspective. In FT, there are people who book DL flights alongside a similar WN itinerary just so they can use SkyClub, then cancel their DL flight once inside the lounge. And everybody ends up complaining that the lounges are too crowded.
      Clever gaming of the system but these type of people ruin it for everyone.

    • PM Reply
      February 23, 2024 at 5:08 pm

      I don’t see this as a positive or a negative – just one more thing to factor in when choosing an FFP. As I usually travel solo and have some routing flexibility, I don’t seem to have serious problems finding availability, so I do value the ability to cancel/change the ticket if my plans change or a great deal comes along. But someone who has to travel during school holidays etc would probably appreciate the additional availability generated by dissuading people from booking unless and until they have firm plans.

      • Stuart Reply
        February 23, 2024 at 5:26 pm

        Agree in a sense, I also, like you, never have too much of an issue a day or two out, sometimes a week. But I would love to see 2-3 weeks out availability increasing as this is a sweet spot for me in not wasting time checking seats.aero every few hours as my need to travel date gets closer.

        Also, being able to see availability possibly increase a month out helps me gage better whether I should just buy a J ticket then. And without speculative and broker bookings clogging up the system those J fares might actually be cheaper, even close in.

  4. PM Reply
    February 23, 2024 at 5:03 pm

    I see your friend Ben is calling this an ‘outrageous’ move, and is spreading fake news about tickets ‘generally becoming more flexible’ and this being ‘literally the most restrictive’ programme (clearly he hasn’t tried changing an Iberia Plus partner award). The reality is that outside of the USA tickets are getting less and less flexible- one recent example being Aegean introducing a restricted business class fare to which you can’t buy up if you are holding an economy ticket that’s otherwise changeable for free!

    • David houlihan Reply
      March 1, 2024 at 3:40 pm

      Totally. Agree
      Not a seat to
      Upgrade
      Fine they’re loss – we live in Abu Dhabi
      Hello Qatar

  5. Pablo Reply
    February 26, 2024 at 1:57 pm

    I’ve found there customer service outstanding

  6. David houlihan Reply
    March 1, 2024 at 3:38 pm

    Totally agree – 13 years as gold – can’t find one seat any where – miles are now trebled with no availability – mint with standing your article
    New CEO thinks TAP which he basically turned into Ryanair is an etihad product ? No
    We will cancel our cards – prefer to pay more with Qatar or Oman and not be screwed over

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