Frequent Flyer Program Serves Both Travel Client and Airline
Frequent flyer programs are sometimes seen by some airline executives as additional costs to bear. In the same way, travel clients oftentimes wonder how airlines can offer free flights or first class travel discounts to customers that accumulate frequent flier points.
In reality, frequent flyer programs serve not only frequent travel customers but also serve the airlines and their affiliates, such as hotels, credit card issuers and other travel destinations, in the form of valuable customer travel information.
When frequent flyers enter airlines’ loyalty programs, they provide valuable personal
information that the airlines could use when they develop and create their marketing campaigns or when they develop additional airline services.
Frequent flyers also provide valuable travel information, such as places frequented, favorite travel seasons, seats preferred, and other related air travel preferences.
Affiliated credit card companies can also trace hotels frequented, destinations visited, types of purchases made and retailers frequented. All these bits of consumer behavior information are gathered efficiently, sorted and analyzed without too much cost.
While other industries spend tons of money to pay market research companies to gather information so that they can target their marketing and operations strategies effectively, airlines have these ready frequent flyer programs from which they can obtain available information.
In exchange, airlines offer benefits such as priority of luggage, priority in waitlisting and reserving an unoccupied seat, in addition to typical frequent flyer rewards such as free flights and discounted upgrades.
Initially, frequent flyer programs were introduced to persuade people to travel more and to patronize the issuers of the loyalty programs. Indeed, these programs have been effective in increasing air travel miles, as shown in the total number of frequent flyer miles accumulated worldwide.
According to available airline data, more than 14 trillion frequent flyer miles have been accumulated by air travel customers worldwide as of January 2005. This total of miles traveled is equivalent to a staggering 700 billion U.S. dollars.
Initially also, frequent flyer points were only earned whenever air travel customers fly. But when airlines started their strategic alliances and code-sharing flights, they also extended their frequent flyer programs across partner airlines.
Also, frequent flyer programs now include affiliated hotels, vehicle operators, restaurants, resorts, other destinations and credit card issuers in their programs.
All in all, frequent flyer programs benefit both the air travel customers, airlines and affiliated businesses.
