Tales From Down Under

Tales From Down Under

Ansett Austrailia Global Rewards Buckles
Almost 3 million Ansett Global Rewards members are bereft of a way to redeem their amassed points, the value of which has been estimated to be in excess of $200 million. Ansett Australia’s administrators have continued to freeze the Ansett Global Rewards program, meaning passengers are not able to redeem award flights with Ansett Mark II or accrue points on flights with the revived airline. A deal between the administrators and Ansett’s new owners is being finalized. Up to ten separate schemes are being discussed – one suggestion is that travelers could re-earn five of their old Global Reward points for each kilometer traveled with the new airline. The Tesna Group are the new owners and took over from Ansett administrators on Jan. 31.

In response, several class-action lawsuits have been put into the pipeline. Over 4,000 members participated in the “Call to Action” survey, which is being used to galvanize Ansett Australia into action for its points-stranded Global Rewards members. In particular, Global Rewards recourse from the credit card companies is being looked into. A Melbourne law firm (Cohen, Woolf and Weinburg), has solicited almost 9,000 creditors, passengers and frequent flyer members. Any resulting action would be taken against the Ansett directors, Air New Zealand and credit card providers Westpac and Diners Club. Finally, an Adelaide law firm is canvassing support for a possible class-action lawsuit using the slogan, “Don’t get cross, get even.”

Lawyers at this firm estimate frequent flyers to be the second largest group of creditors after the banks. The stakes are potentially very high. Each point is estimated to be worth 1.5 cents, and one member alone is thought to have 5 million points. One hundred and thirty thousand points would have secured a roundtrip economy fare to London, worth about $1,500. Ansett’s administrators are trying to find a solution for the millions of stockpiled points. One plan under consideration by consultants at Anderson is to convert points into shares of a revived company. Meanwhile, the competition is clambering to take advantage of the situation. Qantas Frequent Flyer has recruited 35,000 new members and Singapore KrisFlyer is enticing Ansett frequent flyers with a 10,000-mile bonus if they sign up and travel with Singapore or its partners before March 31.

Ansett Australia is the first airline to back out of the Star Alliance and members of the various Star Alliance airline are beginning to question whether the alliance is living up to expectations. Apparently, the alliance backed out of honoring all tickets “purchased” with Global Rewards points – and accepted tickets issued by Ansett up until Sept. 14, 2001, with Singapore having accepted tickets issued through Sept. 21, 2001. Singapore may have a vested interest in keeping Global Rewards’ members content, as the airline is rumored to be interested in managing Ansett Mark II with a view to an equity stake. In this scenario, existing Ansett Global Rewards points will be transferred to a new program (possibly at a discount), or maybe even KrisFlyer. In the meantime, Diners Club and Westpac have revamped their loyalty programs. Global Rewards Westpac Visa holders continue to earn rewards points. All the points earned will be eligible for redemption through a new Westpac Rewards program called Altitude.

Air New Zealand Air Points Remain In Upheaval
Over a half million New Zealanders have Air Points’ account balances, and there is mounting hysteria among these members over the fate of their points after having witnessed the predicament of Ansett Australia Global Rewards’ members in neighboring Australia. Though Air New Zealand and the New Zealand Travel Agents’ Associations have called for calm, their calls have fallen on deaf ears. Travel agents have been inundated with frantic calls from Air Points’ members who are in a quandary whether or not to redeem their points.

Air Points are regarded as unsecured credit and a statutory manager could set them aside with the rest of the company’s debt. A statutory manager has not been appointed at this stage. The Consumer’s Institute acting Chief Executive, Simon Wilson, said that if Air New Zealand did go into statutory management it was unlikely to suspend Air Points and damage goodwill, the basis on which people did business with airlines. “A statutory manager is able to act in the wider public interest. They are not simply required to look after the interests of shareholders,” said Wilson.

Air New Zealand’s Star Alliance partners are still accepting Air Points, despite a surfacing rumor from an Air Canada representative who indicated that this could change if the airline were to stop flying. Should the airline go into receivership, however, it is likely that the Star Alliance will treat Air Points members as it did Ansett Australia Global Rewards members. That is, tickets issued before Ansett’s grounding on Sept. 14, 2001 that were in the passenger’s possession will be honored — all other tickets and points will be null and void. In the midst of the panic, Air New Zealand is looking for a buyer, which should allay the fears of frequent flyers.

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