More and more miles: Lufthansa moves to dynamically priced redemptions

Lufthansa’s Miles & More loyalty program is switching from fixed to dynamic pricing, with more and more miles required for award tickets starting June 3. While the program has announced these changes to its members as “exciting,” the reality is anything but.

The loyalty program of a dozen airlines — including Lufthansa, Swiss, Austrian Airlines, Eurowings and LOT Polish Airlines — will discontinue its reasonable award chart pricing and instead begin pricing redemptions based on the cost of cash fares.

Related: On board the first Lufthansa Allegris flight — was the new cabin worth the wait?

Miles & More dynamic pricing

Rather than a single award fare for each class of service (Lufthansa and Swiss, for example, offer economy, premium economy, business and first class), the loyalty program will offer three different award types for short-haul flights within Europe (Light, Classic and Flex) and four different award types on long-haul flights (Light, Basic, Basic Plus and Flex) operated by Lufthansa, Lufthansa City, Swiss and Austrian Airlines starting June 3.

Under the new system, each fare type will have different baggage, seating, cancellation and rebooking rules and fees. Light fares, for example, will not include checked baggage, seat reservations or refunds, even for Miles & More elite members, making this one of the most restrictive awards any airline loyalty program offers.

This complexity mirrors Lufthansa’s 14 different seat types installed on its new Allegris A350 aircraft.

While other loyalty programs, like Virgin Atlantic Flying Club — which recently switched from fixed-price award charts to dynamic pricing — have promised that every seat will be available for redemptions under a new system, Lufthansa will continue to restrict award availability.

The program has not yet advised at what rate redemptions will be tied to cash fares; other programs, like Delta Air Lines’ SkyMiles, largely use a 1-cent-per-mile rate. If Lufthansa chooses this rate, it could see first-class flights to Europe priced at 1 million miles each way.

Related: Dynamic pricing vs. fuel surcharges — which is the lesser of 2 evils for your next redemption?

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Partner redemptions

The Miles & More program will also adjust the cost of many flights operated by Star Alliance partners (excluding Lufthansa, Lufthansa City, Austrian and Swiss) starting June 3.

For example, United Airlines-operated flights to Europe will change as follows (per person, each way):

• Economy: 25,000 miles (down from 30,000 miles)
• Premium economy: 42,500 miles (up from 40,000 miles)
• Business class: 62,500 miles (up from 56,000 miles)

Flights from North America to South America will change as follows:

• Economy: 25,000 miles (down from 30,000 miles)
• Business class: 62,500 miles (up from 56,000 miles)
• First class: 107,500 miles (up from 91,000 miles)

The program has promised a decrease in the cost of awards within Europe. For example, if you want to fly Brussels Airlines from Heathrow Airport (LHR) to Budapest Ferenc Liszt International Airport (BUD) via Brussels Airport (BRU), the price will drop from 17,500 miles to 14,000 miles each way per person as of June 3.

Miles & More is not a transfer partner of any major credit card program with a transferable currency, so earning miles in the program has traditionally been difficult. But Lufthansa has been generous with releasing premium award seats — including in first class — to partner programs like Air Canada’s Aeroplan, and hopefully, that won’t change with the new pricing system.