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LINKING LOYALTY For revised frequent flyer offerings to be successful, airlines must tie them to overall business strategies, says Ravindra Bhagwanani, managing director of Global Flight

Recent developments away core customer data and forgiving in frequent flyer pro- future financial opportunities is simply grammes show that too high to make it a first choice, even for they are going through small independent carriers. Two airlines a process of transition, with a variety that previously opted for that model are of trends identifiable. now working on an exit strategy by Delta Air Lines, United Airlines and launching their own programmes, in South African Airways have made what might be the beginning of the end headlines by moving their pro- for that concept. Copa is one of these. grammes to a revenue basis, although But even fellow Star Alliance partner several low-cost carriers were actually Brussels Airlines is heading down that first to adopt that concept. SAA has road despite being owned by Lufthansa, also switched the redemption side en- whose Miles & More programme it cur- tirely to a revenue basis, something rently uses on a co-branded basis. most other carriers have typically re- “A programme that frained from. is not aligned to ELITE STATUS The no-frills sector is engaged in a a company’s Finally, some larger programmes work drive to launch loyalty programmes. overall strategy on a completely different, more tradi- Cebu Pacific Air is one of the latest ex- tional partner front: United has stream- amples and more are in the pipeline. is poised to fail” lined its car rental partner portfolio to This puts EasyJet, with its awkward RAVINDRA BHAGWANANI channel as much business as possible loyalty approach – basically consisting Managing director, Global Flight to its newly designated preferred car of a dedicated reservation phone num- rental partner, Hertz. Emirates has re- ber, but no earn/burn component – cently copied Delta’s idea to deepen its even further into isolation. ada programme Aeroplan risks remain- relationship with Starwood Hotels and Other existing low-cost carrier pro- ing the only example with a full Resorts by recognising mutually the grammes are meanwhile becoming spin-off programme for some time. But elite status of members of the partner’s forces for innovation in the market, a while some airlines such as Virgin Aus- programme to a certain degree. move reflected by JetBlue and Azul tralia or Gol have recently pursued op- The conclusion from these develop- being two of the four winners at the re- portunities for a partial spin-off of their ments is that there are not simply two cent Airline Business/Global Flight programmes, Qantas has, to general sur- or three global trends. More than ever, Loyalty Awards, with Southwest and prise, declared that corresponding successful loyalty programmes reflect Germanwings close runners-up. plans were shelved. individual strategies. It may sound like Then there is a move towards coali- a page from a boring history book, but it COMMON CURRENCY tion programmes, probably the most is still true: a loyalty programme not Another trend, followed by two pro- fashionable term in the industry these aligned to a company’s overall strategy grammes, is a move to persuade oth- days. Without necessarily making a is poised to fail. As such, some pro- ers to adopt their loyalty currency. distinction between the true concept grammes are well advised to stick to Avios has convinced Italian carrier of a coalition programme – the sharing their traditional roots. Meridiana, not part of Avios operating of data between different businesses – There is nothing bad in airline group IAG, to adopt the cur- and the simple extension of partner that if such an approach rency. Etihad has similar ambitions, networks, several medium-sized FFPs delivers results. ■ but has not yet moved further, in spite are now aiming to become “coalition of its stakes in the spin-off pro- programmes” in their own words, in- Ravindra Bhagwanani is managing director of grammes of its equity partners Air cluding those belonging to SAS, El Al, FFP consultancy Global Flight (globalflight.net), Berlin, Jet Airways and Alitalia. Air India and Garuda Indonesia. which in partnership with Airline Business and Find out which global Flightglobal organises our annual loyalty confer- programmes were The corporate set-up of FFPs also The concept of co-branded pro- continues to be an issue at many carri- grammes has never really gained mo- ence programme. Loyalty@Freddie Awards recognised at Loyalty 2015 takes place on 29-30 April in Atlanta, 2015 in Istanbul: ers. Nobody is still expecting a big wave mentum, in spite of some prominent showcasing best-practice examples of previous flightglobal.com/ of full spin-offs as some wrongly pre- players praising the corresponding ben- and potential winners of the Freddie Awards Loyalty2015 dicted a few years ago, and the Air Can- efits. The price to pay in terms of giving loyalty-conference.com flightglobal.com/airlines March 2015 | Airline Business | 35