The case Miles & More began with a lawsuit brought by a frequent flyer demanding that the loyalty programme pay him 21,000 euros corresponding to 700,000 Miles & More award miles. These points were accumulated at programme partners such as hotel chains and car rental companies. Miles & More refuses to pay this amount.
The traveller argues that his request is legitimate because this accumulation of miles is in fact equivalent to a financial transaction, carried out in an e-money. However, if this really is a monetary transactions with partners outside the European UnionUnder the German Payment Services Supervision Act, it must comply with the legislation governing payment services. Not only could all points accumulated potentially be converted into euros, but they could also be subject to taxation.
Pending a ruling by the Frankfurt District Court on the legal status of points accumulated and converted into miles under the Miles & More programme, the Lufthansa group has indicated that it is suspending this points transfer system.
Miles & More's managers have acknowledged that they " cannot totally exclude "It was also decided that the possibility of earning loyalty points with foreign FFP partners could be considered as a financial transaction in electronic currency. Consequences: travellers earning points with Marriott BonvoyHilton Honors, Radisson Rewards and World of Hyatt have been unable to convert them into Miles & More rewards and points since the end of last week.
According to a press release, " Miles & More has suspended the conversion options of the customer loyalty programmes of certain partner companies, due to regulatory reasons which could have implications for the Miles & More programme. The suspension only covers conversion options, other partnership offers are not affected. ". However, the press release stresses that members of the programme can continue to collect miles from these same partners via the Miles & More programme or a Lufthansa Miles & More credit card for overnight stays. If the plaintiff is successful, the entire Miles and More model will have to be reviewed and its activity redefined. This is bad news not only for passenger members, but also for the Lufthansa Group, since Miles & More GmbH is a profitable subsidiary that contributes a total of 10 million euros to the group's annual profit. Could this case set a precedent elsewhere in Europe? To be continued.
