At the recent Loyalty & Awards event in Madrid Aegean Airlines, Air France-KLM, IAG Loyalty and Ascenda’s loyalty heads and solutions managers came together to discuss what the response has been for each carrier's frequent flier groups, whether travel has returned and what changes they have made to their programs.
The Changing State of Business Travel
One of the primary discussions was about how travel habits are changing and how travelers are redeeming their miles.
“Business travel is not back. Top tier members have changed their travel habits” said Athina Kakolyri, Head of Loyalty & CRM Marketing at Aegean Airlines.
“During the pandemic we’ve been able to sign up for miles and cars. What do miles and cars do? Well, you can use your miles for car rentals. What we’ve seen is that frequent fliers have been using the following option more and more.”
“We see a lot of leisure travel in our premium cabins."
As for the business travel segment, habits are also changing.
“We happen to be in a similar situation as area-based customers,'' said Benjamin Lipsey (ex-Air Canada), SVP Customer Loyalty at Air France KLM.
“We see a lot of leisure travel in our premium cabins. We see a lot of shorter trips. I’m not going to go to another country in Europe for one meeting, but I will go for a multi-day conference.”
How are Travelers Converting Points & Booking Flights?
Where an opportunity lies is within how airlines and credit cards collaborate and how consumers are using those credit card points to travel, especially when it comes to helping frequent fliers maintain status.
“What we’re seeing is huge growth in the mile conversion which is huge in the U.S compared to Europe. In all cases it’s double-digit mile conversion among Chase Sapphire, Capital One, etc. We don’t expect it to last, but for it to die down. We are surprised though how long it has lasted. Unfortunately, we don’t have the same co-brand support as we have in the U.S and with what Ascenda is doing,” said Lipsey.
“Any seat is available with miles. Air Canada is an example of how to rebrand and refresh its program. It requires a discussion with RM to make sure the economics are in place. What are those psychological triggers? I view that to be our entire job to be about loyalty.”
Meanwhile, IAG is seeing bookings on the upswing and has a tremendous opportunity in front of them.
“We have seen this level of booking flights from April/March, so we weren’t surprised to see such levels of bookings. We’ve recovered 95%-96% which is a really good sign, and we see the same over the next couple of months. I think it’s going to be steady growth into the future,” said Julio Marchena Gonzalez, IAG Loyalties Head of Partnerships.
“We don’t have enough numbers to analyze what is going to happen in the future. From the bookings we’re currently seeing steady growth. Summer people are really enjoying summer here, so based off that we don’t have any concrete numbers from this as people in Spain love to travel in the summer. “
“Any seat is available with miles. Air Canada is an example of how to rebrand and refresh its program. It requires a discussion with RM to make sure the economics are in place."
“Maintaining customer satisfaction is going to be a problem we’re going to continue to see,” said Gonzalez.
“We’re trying to push how passengers book flights in their daily life such as by partnering with Cabify”
On the other hand, Jason Peacock, Director Partnerships & Marketing at Ascenda, one of the industry's End-to-End Loyalty Solution provides his own view of the global market.
“It has been a mixed year. U.S came back very quickly. I think there has been quite some disruption in Europe and the U.K. We have worked with 2 card issuers which have shown that there is a pent-up demand. When it gets sorted the demand will return.”
“We think that China will explode next year,” said Peacock.
Ultimately loyalty programs are a discussion catching the attention of consumers as many travelers struggle to maintain status and/or are juggling points and miles from multiple programs.
“When half of the elite status in the world (50 million people) will downgrade in status in three months, which represents 15% of all global ticket sales, there is an immense risk ahead of us.” said Mark Ross, CEO & Co-Founder of StatusMatch.