Etihad Airways has announced a major overhaul of its frequent flyer program which will see significant changes to Etihad Guest status, reward bookings and the expiration of miles.
While many of these changes are positive, there are a few things that some Australian frequent flyers might find concerning. For example, Etihad has massively increased cancellation fees on award bookings. You’ll also soon need to book a flight on Etihad or a partner airline at least every 18 months to avoid losing all of your Etihad Guest miles.
Many of these changes will happen on 1 June 2024, but some have already come into effect. For example, Etihad Guest has already changed the number of miles you’ll need to redeem for Etihad and some partner airline flights. On many of Etihad’s own routes, you’ll actually now need fewer miles to book a reward seat.
But other routes and some partner airline rewards are now more expensive.
The changes come as Etihad has also begun to block members of partner airlines from accessing GuestSeat award availability on Etihad Business and First Class flights more than 30 days in advance. In turn, this reserves more seats for Etihad Guest members who now have better access to award availability, and at lower prices in some instances.
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Summary of the main changes
You can find a full list of the upcoming program changes on the Etihad Guest website.
Many of the changes are to the elite status tiers. These changes take effect from June 2024 and include:
- The introduction of a new Diamond status tier (requires a spend of at least USD150,000 on Etihad flights within 12 months)
- Elite status benefits divided into Core, Custom and Beyond benefits, with benefits like lounge access available for Gold (and higher) members as a choice from a list of optional “Custom” benefits
- Only Tier Miles (not segments) will count towards status
- Tier Miles and Etihad Guest miles will be awarded at the same rate
- Platinum and Diamond members will be able to choose a personalised membership number
The changes to redemptions took effect on 22 February 2024. In addition to the award pricing changes, Etihad Guest is now offering members the opportunity to redeem miles for upgrades to The Residence on Etihad’s A380 services.
Etihad Guest miles will soon expire unless you fly
Currently, Etihad Guest miles do not expire as long as you maintain any sort of account activity at least once every 18 months. Qualifying activity could include simply earning or redeeming one mile with any program partner.
But from 1 June 2024, only flight activity will count towards extending your balance of Etihad Guest miles. You’ll need to fly with Etihad Airways or one of its partner airlines at least every 18 months to stop your Etihad Guest miles from expiring.
Etihad tells us that redeeming for a flight with Etihad or a partner airline would also extend a member’s balance. However, the new policy will be applied retrospectively from 1 June 2024.
So, if on 1 June 2024 you haven’t taken an eligible flight linked to your Etihad Guest account within the previous 18 months, all of your miles will expire. This could affect a lot of Australians who might fly with Etihad every few years, but collect miles via credit cards or other non-flying activities.
Once this policy comes into effect, it unfortunately wouldn’t make sense for a lot of Australians who don’t fly Etihad Airways regularly to collect Etihad Guest miles. Instead, it would probably make more sense just to transfer points into Etihad Guest as you want to use them – and then immediately redeem them.
Australians can at least also credit Virgin Australia flights in eligible booking classes to the Etihad Guest program.
This is an unusually harsh expiration policy
Each frequent flyer sets its own policy regarding the expiration of points or miles.
Most frequent flyer programs continue to extend the validity of your miles, as long as you simply earn or redeem points regularly. Some airlines still use legacy “time stamping” policies, where miles expire after a fixed period – usually 3-5 years. But the overall trend in recent years is for airlines to remove expiration policies entirely, as United, Hawaiian Airlines, Virgin Atlantic and others have done.
Etihad’s new policy bucks recent trends, making it more likely that members’ miles will expire sooner.
Air France & KLM’s Flying Blue program is the only major frequent flyer program with a similar policy, but it’s still less harsh than Etihad’s. Flying Blue miles expire if you don’t credit a flight or make a purchase on an eligible co-branded credit card at least once every two years.
Meanwhile, with Avianca’s LifeMiles program, you need to earn at least one mile every 12 months to prevent your balance from expiring. That’s an unusually short amount of time, and redeeming miles doesn’t count. But you don’t necessarily have to fly to prevent LifeMiles from expiring – simply earning miles via any means is sufficient.
Australian Frequent Flyer asked Etihad if it believed its new expiration policy was competitive with other frequent flyer programs.
“We feel that 18 months is a reasonable time span for members to activate a flight as part of the programme. Typically, the majority of existing members elect to fly within this timeframe,” Etihad told us.
New award booking cancellation fees
Previously, Etihad Guest charged a 10% fee to cancel an award booking. This is no longer the case. Etihad Guest reward flights booked from 22 February 2024 now attract cancellation penalties of between 25-100%.
Now, if you cancel an Etihad Guest redemption booking, you’ll forfeit the following amounts of miles depending on how far in advance you cancel:
- More than 21 days before departure: 25% penalty
- 8-21 days before departure: 50% penalty
- 1-7 days before departure: 75% penalty
- Within 24 hours before departure: 100% penalty
In general, it’s very reasonable for airlines to charge cancellation fees. But these are likely the highest award booking cancellation fees of any major frequent flyer program.
Etihad told us that a large portion of GuestSeat bookings were being cancelled within seven days before departure.
“Unfortunately, this hampers other members who would have liked to have taken that flight from getting access to it,” according to Etihad.
If that is indeed the case, these changes could at least prevent people from hoarding award seats they don’t necessarily plan to use. That is a reasonable point. But Etihad surely could have achieved this without setting its cancellation fees quite so outrageously high.
Summary
Many of the changes Etihad is making to its frequent flyer program are innovative and will likely benefit travellers who regularly fly with Etihad Airways.
Unfortunately, the changes to the expiration of miles and award cancellation fees could make the program less attractive to Australians who might consider using the Etihad Guest program.
If you currently have Etihad Guest miles, beware that they could expire if you don’t have any flying activity in your account from the past 18 months on 1 June 2024. On this date, we expect Etihad will be able to record a lot of breakage (expiring points that Etihad can write off as profit).
Breakage is good for a loyalty program’s short-term profitability. But it comes at the risk of losing engaged members in the long term.
