Why is Lufthansa removing the ability to buy miles?

This interesting note popped up on the Lufthansa website this week:

“The option of being able to buy the miles you are short of for an award flight with a Lufthansa Group airline will only be available for a few more weeks. This option will be removed from the Miles & More programme during July 2014.  Until then you can buy up to 20,000 miles and receive an extra 20% more miles as well.”

This is weird, frankly.

Airline and hotel programmes LOVE selling you miles.

What’s not to like about selling miles to your members?

The airline gets cash today whilst the miles may not be redeemed for months, if ever

The price paid by general members is SUBSTANTIALLY (ie 300%-400%) more than the price paid by their hotel, shopping and car rental partners

Why has Lufthansa decided to do this?  Here are a few possibilities:

Do they want to force people to earn miles just from flying? – this is VERY unlikely, given that Lufthansa is planning to sell Miles & More as a standalone loyalty business.  It has also not cut back on any other partnerships (in Germany you can rack up miles fairly easily by taking out trial subscriptions to newspapers in return for a big slug of miles for example).

Have they found that people were buying miles to pay 100% of the cost of a flight? – this is also VERY unlikely, since short-haul redemptions are terrible value and you can’t buy enough miles for a long-haul redemption.

This leads me to option 3:

Miles & More has aggressive expiry rules.  Your miles expire after 3 years from earning them, whatever other activity you have in the meantime.  By not letting you buy miles, it is more likely that your existing miles will expire (a good result for Lufthansa) as you will not be able to top them up to a level which makes it worth redeeming.

Of course, Miles & More is so integrated with all of its other partner programmes that Lufthansa is actually powerless to stop you buying Miles & More miles via the back door.

Until last Friday for example, you could have bought 20,000 Starwood Preferred Guest points for just $525 (£313) in the SPG points sale.  These will transfer into 25,000 Miles & More miles.  At just 1.25p per mile, this was actually cheaper than buying 25,000 miles direct from Lufthansa – even taking into account the current 20% miles bonus!  Miles & More wants you to pay €475 for 24,000 miles which is 1.61p each.