2nd October, 2019
All airline loyalty programs aren’t the same. Working out an apt program structure, encompassing accrual (mileage-based, revenue-based or a hybrid model), tiers, earn-burn ratios etc., and managing the financial liability is vital.
The business model of a traditional carrier vs. a low-cost carrier differs, so does the aspiration of flying in the first class on a long-haul vs. simply being price conscious when it comes to LCCs, and accordingly economics of loyalty also varies, points out airline loyalty and big data expert, Mark Ross-Smith.
If an airline believes that running a classic FFP that tends to rely mainly on frequent flyers and can be actively engaged via flying benefits, rewards etc., then they might not open up to be a completely digital currency. For their part, LCCs are increasing the utility of their loyalty currency. The focus on letting loyal customers gather and spend their miles as freely as cash is standing out. Certain airlines are also trying to expand their reach, and by doing so, offering their loyalty program members the convenience of shopping on 3rd party travel sites. When it comes to redemption, some carriers in Asia are allowing shopper to redeem their currency on 3rd party marketplaces.
As the mobile-savvy generation gets accustomed to using one app or a superapp for ordering food, commuting, digital payments etc., how are airline looking at fostering loyalty via linking the on-demand services with the earn-burn cycle?