The Voyager credit card, “cheap” fares, fuel surcharges ripoff
Monday, July 27th, 2009An exchange of emails between SAA and me (showing their true colours)
From: Emile Myburgh
Sent: 08 May 2009 06:20 PM
To: Desmond Sampson
Subject: SAA customer loyalty
Dear Sirs,
Last year I wrote a letter that was published in your October edition so I don’t expect this letter to be published. However, I feel compelled to reply to acting CEO Chris Smyth’s appeal to SAA’s passengers’ loyalty in getting the airline through these troubled times.
Mr Smyth, nothing would give me more pleasure than abiding by your plea but a couple of recent changes at SAA really do not contribute to your appeal. I travel to Brazil 5 times a year and am a Gold Voyager member. Last year I accumulated around 70 000 miles, all of them on SAA, except for about 9000 flying fellow Star Alliance Member TAP to London via Lisbon. This comfortably secured my gold card for a second year in a row and I must tell you, I really enjoy the benefits.
However, recently I’ve noticed that, while your fares to Brazil haven’t gone down, you now only give me 50% of the miles, because the booking class is now class L and no longer class Q. This means that, even if I fly as often as last year, I won’t get the Gold card again, even though I’ll in fact spend more money on aeroplane tickets. Then there is also the issue of all the taxes that one has to pay when booking a Voyager ticket, which makes it less attractive accumulating all those miles and more appealing looking at the competition and simply forgetting about Voyager and just buying a ticket on the cheapest airline flying to wherever I want to go. Even your coveted Premium Credit Card is not so appealing anymore. I have now spent my R60000 entitling me to a free companion ticket. However, there is one big catch. Let’s say I want to take my partner to Brazil. I have to buy a K class ticket, which costs around R12000. Then, I still have to pay around R4000 in taxes for my companion. This adds up to R16000 (R18000 if one adds the Voyager credit card fee on top of that). If I buy two L class tickets, I will pay R14000. Where is the incentive still to pay the exorbitant annual card fee? I’m seriously thinking of cancelling this credit card and just using my Diners Club card which gives almost as many miles, with a much lower annual fee.
So, what I’m saying is this: I’m not really using my miles for free tickets for myself, I give them away to my family. The real joy of the Gold voyager card is that extra baggage allowance, the access to Star Alliance lounges with a guest, the business class check in, the bonus miles and the preferential seating. That is what guarantees my loyalty, not the free flights. In fact, even if you take away the free flights but still give me a gold card with all those other benefits, I’d still fly with SAA. However, by taking this away SAA is effectively telling me that my custom is worth 50% less to you, although the price increases. And this is what makes that, when I have an alternative, I won’t fly SAA. As my preferred route is to Brazil for business reasons, regrettably, you have me hooked. But I’m just waiting for TAM Brazilian Airlines (whose Fidelidade programme I am also a member of) to finally start flying between Sao Paulo and Johannesburg and then it is “adeus” SAA, unless you start valuing my custom again in the same way as you are appealing for my loyalty.
One final question: with oil prices one third of what they were last year this time, why are you still levying a fuel levy as if oil were still at $147 a barrel?
Kind regards,
Emile Myburgh
From: Jackie Cronje [mailto:JackieCronje@flysaa.com]
Sent: 21 May 2009 09:20 AM
To: Emile Myburgh
Subject: FW: letter to Sawubona (Emile Myburgh)
Dear Mr Myburg,
Thank you for your letter written to the Sawubona Magazine. On behalf of Voyager I would like to comment as follow.
50% mileage accrual for certain fare classes:
We are proud to say, that SAA Voyager is still one of the frequent flyer programs that awards 50% miles for lower purchased classes. A lot of our Star Carrier Airlines do not reward miles
for lower classes at all. SAA has recently aligned all class fares in a simpler way in different class fare families. Voyager is currently busy looking at these fares, to establish the value vs. accrual
miles, in order to ensure value of miles for the fare that the customer paid.
Airport Taxes on Voyager tickets:
All competitive Frequent Flyer loyalty programs charge airport taxes when redeeming miles for flight awards.
Airport taxes are paid on all airline tickets and this tax does not go to SAA, but to the Airports Company of South Africa. Different airlines treat some of these taxes in a different fashion, so some may absorb a portion of the taxes in the ticket prices ie the fuel surcharge. This means they will not show up as a “tax” but will be part of the ticket price. Below please find the different taxes:
. VAT which is 14% of the fare – Revenue tickets (We do not charge VAT on Voyager tickets)
. Passenger Service Charges, required by the Airports Company of SA and Aviation Co-ordination Services as well as a small administration fee
. Civil Aviation Authority Passenger Safety charge
. Fuel surcharge which is charged by airlines to cope with volatile fuel prices
Voyager unfortunately has no control over the amount of airport taxes charged.
Companion Ticket:
Voyager is constantly looking at the Voyager credit card product offering.
When the Companion ticket was introduced, qualifying fare classes were Y B M K only, after we have looked at the valued we have introduced a lower fare namely H/class
that also qualifies for the companion ticket. I take note, that it still stays expensive. The companion ticket holds a higher value if you purchase tickets in business class, or if you
are a business man, where the company pays for your tickets. We are busy with a strategic value meetings looking at all the credit card benefits, establishing the value of the
benefits attached to each card type. We will communicate the changes to all members as soon as the proposal has been concluded.
I hope that you will find my answers satisfactory. I would like to thank you for your support, and would like to assure you that we value you as one of our Elite Voyager members.
Please do not hesitate to contact me should you need further assistance with Voyager.
Jacqui Cronje
Voyager Product and Marketing Specialist
Tel 011 978 1339
Fax 011 978 9865
e-mail jackiecronje@flysaa.com
Dear Ms Cronje,
Thank you for your reply.
The bottom line remains, Voyager and SAA are no longer offering the same attractive product that it used to. You can be as proud as you want to be by still giving 50% miles on low class fares, but considering that these new low classes cost the same or more as high class fares did in the past, I am left with a slight feeling of being tricked while SAA hides behind meaningless (for the passenger at least) letters. Incidentally, there are airlines that don’t go quite as low as giving only 50% of the miles, some give 90% (TAM in Brazil, for example). Anyway, why 50%? Why not 90% or 75%? The way you put it makes it sound like I should be grateful to get anything at all. Not a good way to keep my custom.
As a voyager member for 13 years, I feel slightly perplexed if not insulted that you would assume that I didn’t know how the airport taxes on voyager tickets work, but thank you for the explanation (which is also contained on your website and brochure, and if that didn’t tell, I would have noticed it each time I buy a voyager ticket). Everybody knows how the airport taxes work. The point is, the amount of the fuel levy which you disguise as a tax is based on an oil price that was $147 a barrel. Now it is $60. Why don’t you pass the saving on to us? You simply call it a tax so that you can say to us: “on voyager tickets you don’t pay for the fare, only taxes, and the fuel levy is a tax, and there is nothing we can do about that”. The point is, we don’t believe this about the fuel levy and SAA simply does not give a credible explanation for it.
You didn’t advise Voyager members about this H class for companion tickets. I will look into it. However, when you say it makes sense for business travellers because their companies pay for the tickets, are you implying that businessmen and -women can make their companies pay higher fares so that they can take their partners with them? Do companies not care about the bottom line? Or is your implication that the businessman or -woman should take a colleague as a companion and saving the company some money (if there really is a saving). I am self employed and business class tickets are simply too expensive for me, so your argument about the companion ticket making sense for buying business class tickets really falls flat on its face, and shows, somewhat alarmingly, that your research into your premium credit card holders is very inaccurate. I really don’t remember being asked for my opinion ever, despite having applied for my card on the day it was launched in 2006.
Talking about business class. In order to upgrade to business class using my miles, I have to buy a more expensive ticket, yet you don’t guarantee availability for a business class ticket. Who in his right mind will take such a gamble? The result is, I buy the cheapest ticket and just slum it in economy class. This must surely be what your intention is. Voyager must know that people would rather buy a cheap economy class ticket without the right to upgrade than take a risk buying an expensive economy class ticket that comes with a faint hope of an upgrade. That way you can still sell that business class seat for money.
As it is, I can assure you that none of my friends and colleagues who are voyager members fall for your explanations. This leaves you with two options: either improve your explanations or offer a product that offers value for money. Based upon the current view we have of Voyager and SAA, I cannot see you offering value for money any time soon, so, on the issue of better explanations, don’t you think it would be so much better for your image if you simple come clean and say to all your valued customers: “look, times are tough, as you all know, we are also suffering, and we simply cannot afford to be as generous with our benefits as we used to, so we have to cut them, but please bear with us.” You can be sure we would understand, even be sympathetic, and we will rally to your cause. I may not be impressed with the way you treat me, but everybody is proud of our national carrier and would run to help it. Just stop thinking we are fools that don’t see through your PR rabble.
Regarding my own situation, I will lose my Gold card at the end of this year because I am not going to pay the extra money for those higher classes just to keep the Gold card, and, with business being down, I won’t fly 100 000 real miles in a low class to be awarded 50000 miles to keep the Gold card. I accept that, and for this reason and all of the above, I am now looking at your competitors (Star Alliance and non Star Alliance). What I don’t accept however, is the explanations you give. Coming clean, like I’ve suggested, might be a lot better for your image than sending PR responses, because right now, I think SAA and Voyager are not honest.
If you want to study an example of how effective yet simple and straightforward a frequent flyer programme can be, look at TAM Brazilian Airlines’ Fidelidade programme.
Finally, as you will notice below, I am an attorney, and have just studied the new Consumer Protection Act for an article in Business Day. I seriously think that the way you implement the Voyager programme falls foul of section 35 of the act and, who knows, someone might just get irate enough to take SAA to task over it. Maybe you should get some legal advice on the topic.
Kind regards
Emile Myburgh (TAM Fidelidade card no: 23478183)
