The Inland Revenue Department has ruled that it will not tax companies when their staff accrue Airpoints Dollars while travelling for work, says Air New Zealand's Loyalty Manager John Whittaker.
"We are extremely pleased that the IRD has issued a binding ruling that will see Airpoints Dollars free from income and fringe benefit tax," says Mr Whittaker.
From next Tuesday, 16 November, Air New Zealand Airpoints Dollars will replace Airpoints as the programme currency.
All members' existing Airpoints balances will be converted to Airpoints Dollars, with 75 Airpoints equating to one Airpoints Dollar.
Able to be used just like cash when booking seats, one Airpoints Dollar will be equivalent to one New Zealand dollar, with members able to choose from every seat, every flight, on every Air New Zealand ticketed and operated flight.
Mr Whittaker says the conversion ensures that the vast majority of journeys that could have been taken by Airpoints members with their reward points can still be taken with their new Airpoints Dollars balance.
As well as being able to purchase any seat, 61% of flight redemptions will require fewer equivalent points to purchase the lowest fares and 15% of redemptions will require the same number of equivalent points.
Overall, the number of Airpoints Dollars required at the lowest published fare to obtain the flight redemptions taken in the past 12 months will be an average 6% less than the equivalent number of Airpoints required under the old programme.
More than one million Air New Zealand customers are Airpoints members, with around 800,000 of these living in New Zealand.
Mr Whittaker says the changes to Airpoints make it one of the world's most innovative and attractive airline customer loyalty programmes.
"One of the greatest benefits is that even the lowest special fares, as well as children's fares, are available in Airpoints Dollars. Companion tickets will also still be available on international flights at the equivalent of 30% discount on the lowest published fare," he says.
"So, if a seat is available on a flight, and members have enough Airpoints Dollars, they can buy it. It's as simple as that."
Mr Whittaker says the new programme is designed to more fairly reward frequent flyers.
"Under the existing programme, Airpoints are rewarded based on distance flown, rather than the fare paid. Many customers told us they felt this was unfair and in a business where we want to reward our most frequent and loyal customers, Air New Zealand agrees. Therefore, from next Tuesday, dollars spent on travel will be recognised ahead of distance flown. This means there will be greater earning potential on most domestic, Tasman and Pacific Island fares, but lower earning on longhaul discounted economy fares."
Mr Whittaker says Air New Zealand has been extremely pleased with the level of support for the enhanced Airpoints programme.
"We put more than a year of research and planning into developing the new Airpoints programme. Much of that time was spent listening to our members and tailoring Airpoints to better meet their needs. It has been extremely pleasing to receive a lot of positive feedback from members since we announced the changes in July."
The enhanced Airpoints programme is one of a series of recent initiatives undertaken that reflect Air New Zealand's commitment to delivering a uniquely Kiwi experience and everyday low fares. Others include:
- The launch of everyday low Express fares for Domestic, Tasman and Pacific travel.
- The purchase of eight Boeing 777-200 ER and two Boeing 7E7 aircraft as well as purchase rights for a further 42 long haul aircraft.
- The interior upgrade of the 747-400 fleet, including new lie-flat seats for premium customers, new seats (featuring seat-back screens) for economy customers and a new on-demand in-flight entertainment system.
- The purchase of 17 new Q300 turbo-prop aircraft for regional services.
- The appointment of leading New Zealand fashion house Zambesi to design new uniforms for cabin crew, pilots and frontline staff.
- The use of traditional indigenous ingredients in some long haul meal choices and greater emphasis on premium New Zealand wines.
- New routes, such as Auckland-San Francisco, Christchurch-Los Angeles, Christchurch-Rarotonga and Wellington-Fiji.
For further information, please call Air New Zealand Public Affairs on 09 336 2761.
Airpoints – Key Facts
- Airpoints was launched in 1991 and has more than one million members, with around 800,000 of these being in New Zealand. That means almost one in five New Zealanders are members.
- More than 500,000 Airpoints reward seats are redeemed each year.
- On average, 5% of Air New Zealand customers are travelling on Airpoints reward tickets.
- From 16 November, Airpoints will be enhanced and allow members to purchase any seat on any Air New Zealand ticketed and operated flight.
- The current Airpoints policy will change to reward for the fare paid, rather than distance flown.
- Companion tickets are still available on international flights at the equivalent of 30% discount on the lowest published fare.
- When redeeming Airpoints Dollars, the cost of the channel chosen will be reflected in the price:
- Redemptions on the internet will be free of any service charges.
- Redemptions through the Travel Centres and call centres will incur the now standard booking fee per one way flight of NZ$25 for international and $15 for domestic.
- An annual Airpoints membership fee of NZ$30 will apply unless:
- Members buy a commercial fare on any Air New Zealand flight in the previous 12 months
- BNZ is paying the fee on behalf of Global Plus primary account holders and home loan customers
The NZ$30 membership fee will be discounted to $20, if paid online and statements and the Airpoints newsletter, Highpoints, are accessed online.
- New special low fares for Airpoints members redeeming on non-Express routes (primarily long haul)
- "Top ups" will no longer be available.
- Airpoints currently allows customers to purchase 20% of the value required for a reward by paying for the additional reward points with cash.
- This feature is only used on 3% of bookings.
- The enhanced Airpoints scheme allows members to purchase one-way fares, so the minimum balance required for a flight redemption falls from 267 to 61.
- Airpoints Dollars will still be able to be used for standby upgrades. Confirmed upgrades are being introduced from 16 November 2004.
- Airpoints members can still redeem with Freedom Air.
- Tier status will be based on Airpoints Dollars earned flying from 16 November 2004. To allow customers to get comfortable with the new tier status qualification criteria, Air New Zealand will allow qualification under the existing or new criteria until 31 December 2005.
NOTE: The content of all Air New Zealand media releases are accurate at the time of issue, as stated at the top of each release. For updates on any changes, please contact Air New Zealand.
Air New Zealand is proud to be a member of Star Alliance. The Star Alliance network was established in 1997 as the first truly global airline alliance to offer worldwide reach, recognition and seamless service to the international traveller. Its acceptance by the market has been recognised by numerous awards, including the Air Transport World Market Leadership Award, Best Airline Alliance by both Business Traveller Magazine and Skytrax. The member airlines are: Adria Airways, Air Canada, Air China, Air New Zealand, ANA, Asiana Airlines, Austrian, Blue1, bmi, Continental Airlines, Croatia Airlines, EGYPTAIR, LOT Polish Airlines, Lufthansa, Scandinavian Airlines, Shanghai Airlines, Singapore Airlines, South African Airways, Spanair, SWISS, TAP Portugal, Turkish Airlines, THAI, United and US Airways. Aegean Airlines, Air India, Brussels Airlines and TAM have been announced as future members. Overall, the Star Alliance network offers 19,500 daily flights to 1,071 airports in 171 countries.
For more information about Air New Zealand visit www.airnewzealand.com and for more information about Star Alliance visit www.staralliance.com.