In a cost of living and climate crisis, let’s ditch reward schemes

This can be seen especially in relation to flying. Flying is a very high emission activity for individuals and for the nation as a whole. But most of the world’s population have never been on a plane. In New Zealand, as in other wealthy countries, a small minority contribute to the majority of emissions through their frequent and long distance flying.

In the UK, the campaign Make Them Pay is targeting aviation emissions. It has three demands: to ban private jets, to tax frequent flyers and to make polluters pay. A 2019 report for the UK’s Committee on Climate Change also recommended a frequent flyer levy and a ban on air points.

While New Zealand doesn’t have that many private jets, our efforts to make polluters pay are not at all comprehensive with regards to aviation. There are many subsidies for aviation, and these tend to benefit the well off. There is no GST or fuel tax on international flights; they are not in the Emissions Trading Scheme or the carbon budgets. Yet, if a family catches the bus for a local holiday, the fuel is taxed and GST is paid on the tickets.

But a hidden problem are airline loyalty programs, such as Air New Zealand’s Airpoints, which now has 3.6 million members. Far from taxing or reducing frequent flying, these programs promote it. Credit cards are linked to the programs, so that all spending on the card earns points. In other words, the price of all other goods is pushed up to subsidise flying, the most emissions-intensive activity there is.

The link is most obvious in supermarkets, where the rising price of food subsidises flying. There’s a similar issue with Flybuys (2.4 million members), in which food subsidises other purchases, particularly petrol. (Z energy owns part of Flybuys and also sells the petrol reward.) AA Smartfuel – same problem.

If you do get a free flight, who is paying for it? The costs are spread across all goods and services sold by businesses supporting such schemes making these products more expensive. But it will be the higher-spending families who will make most use of these (tax-free!) rewards, so that poorer families not using such a card end up paying higher grocery bills to support the schemes.

Loyalty schemes are an effective and lucrative marketing tool for the airlines. In the US, the loyalty schemes of the largest airlines are valued at more than the airline itself: without them, they would be bankrupt. The rewards such as free upgrades expose travellers to ever more luxurious travel and higher emissions – business class seats, because of the extra space, are 3 to 4 times as damaging as economy class. (Travel writer Brook Sabin complained this week that he was struggling to redeem his free upgrades with Air New Zealand – no empty seats available in business class!) There’s a whole industry devoted to advising you how to optimise your ‘tier point runs’, flights devoted solely to achieving the next tier. Air New Zealand is even thinking of introducing an even higher tier, ‘Elite Plus’, which would allow you to bring a friend along for free. Where will it end?

Aviation has many aspects of being a reverse Robin Hood scheme. Taking from the poor and giving to the rich. There’s a lot of work to do to end this, but reining in the loyalty programs would be a good start.

A Change in the Weather is a climate cartoon by Abe Hunter that appears each Saturday in the Otago Daily Times. See the full series at https://artordeath.wordpress.com/2022/11/06/a-change-in-the-weather/.