Ai Video: Counting on FFPs as platform-based, digital business

First Published on 4th December, 2017

It is time airlines count on the prowess of frequent flyer programs (FFP) for being an asset-light, platform-based, digital business, asserts Evert de Boer, Partner at FFP Investment and Advisory. He points out that akin to the characteristics of digital disruptors, such as Uber and Airbnb, FFPs, too, don’t own the physical assets and are in a position to capitalize on data analytics and predictive modelling based on rich datasets that such programs have worked out.  “Typically operating in a digital environment, (FFPs) it is a very agile business (and in comparison far more agile than a typical airlines business),” he said.

FFPs are in a unique position, and as de Boer says, the “theoretical access” to data is unmatched in this case. FFPs have become network players (paved way for an ecosystem of miles earning opportunities across a significant share of everyday spent), he says, with a deep insight into the activity of their members, their buying choices, the likelihood of what they are going to buy etc. “But airlines haven’t fully explored the possibility as yet,” he said. “There is a need to connect all the dots and work out a strong profile of the customers.” The drivers of two businesses - airlines and FFPs – are quite different. “It does raise questions around how to govern and optimize this (FFP) business, even though there is talk around the same shared customer,” highlighted de Boer. 

 

(Evert de Boer, Partner at FFP Investment and Advisory spoke to Ai's Ritesh Gupta during the recently held MegaEvent in Palm Springs, California). 

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