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Maximize Airline Loyalty Programs for Profit and Passenger Satisfaction: A Guide through Examples

When economic conditions take unexpected turns, it is loyalty programs that have kept the revenue for airlines coming. Let's look into some major examples to understand

By

Anjali Pillai

4 Min Read

October 17, 2023

Airline loyalty programs (often called frequent flier programs) aren’t just about collecting miles while flying; they’re a dynamic long-term partnership that benefits travelers and airlines alike. In the fast-paced world of travel, these programs have evolved into powerful strategies that enhance the passenger experience while boosting airlines’ bottom lines, even during the toughest economic climates. 

 

In this comprehensive guide, we’ll dive into five prominent airline loyalty programs, shedding light on their numerous advantages to travelers and the airlines. This guide will enable your journey of designing or expanding a customer loyalty program that deliver RoI and delights end customers.

 

1. Sky Miles by Delta Airlines

 

Delta Sky Miles, one of the most popular airline loyalty programs, is free to join and boasts a staggering 120 million members. As of 2020, Delta has earned around 2.2 billion alone from SkyMiles. 

 

Delta Sky Miles follows a  Medallion status hierarchy, which provides exclusive benefits as the customer ascends through Silver, Gold, Platinum, and Diamond tiers, based on their spending and flying activity. An increase in status level can be earned by flying, hotel stays, credit card spending, and much more. 

 

During the pandemic, when travel had entirely slowed down, Delta Airlines was one of the US carriers that was able to secure funding of $6.5 billion by collateralizing the future cash flows of their loyalty programs 

 

In September 2023, Atlanta-based Delta Airlines announced some changes to its Sky Miles program which has not been well received by its loyal customers. According to the new changes, the focus shifts to how much the customer spends instead of miles flown, making it two times harder for current customers to enjoy the Medallion Status. While this new shift is going to make sense considering the financial benefits for the airlines, it poses a conflict of interest for its current loyal customer base. Only time will tell as to how this will pan out but as a learning for loyalty marketers- it is crucial to analyze the repercussions of a change in loyalty program design.

 

 

2. Miles and More by Lufthansa

 

With over 20 million members, Miles and More is Europe’s go-to choice when it comes to airline loyalty programs. With an extensive network of 40 airline partners, including renowned names like Lufthansa and SWISS, this program offers a seamless travel experience. 

 

In Miles and More, the tier levels are different from other airline loyalty programs. The tiers of Miles and More loyalty programs escalate as follows- Frequent Traveler, Senator, and HON Circle Member.

 

While qualification thresholds for membership tiers are slightly higher, even Frequent Traveler members can enjoy perks. Some of them are:

  • Exclusive lounge access
  • Priority check-in and boarding

 

Miles and More’s interactive mobile app helps people keep track of their miles, set miles targets, and make it easy for travelers to redeem their rewards. They also get personalized updates on daily offers based on your reward status. And the best part- the app offers free 500 miles upon signup.  Miles and More does all this by using zero-party data, ensuring absolute data privacy of its customers.

 

Leveraging the power of coalition loyalty programs, Miles and More is in partnership with several other brands, allowing customers to earn award miles not just from flights but also through partner hotel and rental car services.

 

Also Read: Understanding Coalition Loyalty Programs

 

3. Mileage Plan by Alaska

 

With a revenue of $479 million, Alaska’s award-winning loyalty program Mileage Plan is another leading frequent flyer program. Alaska Airline’s Mileage Plan allows customers to earn 30% more miles than many other airline loyalty programs. 

 

A tier-based loyalty program, Mileage Plan offers a  flexible earning system, allowing the traveler to accumulate miles not only by booking flights but also through partner hotels and rental car providers, like Miles and More. Additionally, the traveling member can even earn rewards by dining at partner restaurants and if you are using their partner travel credit card, you earn miles on every dollar spent on the card. How convenient is that!

 

Some other key benefits of the Alaska Mileage Plan include: 

  • Premium upgrades
  • Inflight magazine subscriptions
  • Dedicated services
  • Faster boarding (no long queues at the airport!)

 

As a brand, it will be critical to have a thorough analysis of customer behaviour and design the loyalty program accordingly. With a platform like Capillary, the AI-powered Nudge Framework enables brand marketers to deliver personalized communication tailored for an individual. This helps in increasing customer retention and win their loyalty. 

 

 

4. Skywards by Emirates

 

Emirates Skywards is one of the most popular frequent flyer programs in the Middle East and takes a comprehensive approach to rewards. 

 

There are four distinct membership tiers and higher your status, the more exclusive benefits you unlock. The miles you earn depend on a combination of factors, including the route, spending, your membership tier, and fare class. 

 

Travelers can enjoy a range of benefits based on their membership tier: 

  • Extra baggage allowance
  • Waitlist priority’
  • Flight upgrades
  • Priority services
  • Access to business-class lounges and more

 

Skywards by Emirates also provides a feature to create a family account where travelers can pool their miles. 

 

Additionally, you can accumulate Emirates Skywards miles not only with Emirates but also through partner airlines like JetBlue and Malaysian Airlines. The customer can redeem their Skywards miles with Emirates and their partner brands.

 

5. Flying Blue by Air France 

 

Air France’s Flying Blue program boasts 20 million members and adopts a revenue-based rewards system, where the more you spend, the more you earn. 

 

Flying Blue miles can be earned by flying with Air France, KLM, and Transavia, with miles credited to your Flying Blue account. From booking a flight, hotel, shopping with partner brands or using a co-branded credit card, Flying Blue provides a lot of opportunities for its members to collect miles.  This system ensures that travelers are rewarded based on their financial commitment, making it a higher ROI source for the airline and ensuring premium services for member travelers.

 

Flying Blue offers a number of exciting ways to spend miles through partnerships with other brands. A few to mention are:

  • On-flight meals
  • Extra baggage allowance
  • Promo rewards on the first of each month
  • Lounge Access and more

 

Using the miles in your Flying Blue account the member can also purchase items from the Flying Blue Store, the payment being in miles.

 

Conclusion

 

When the pandemic posed a tough time for several airlines, it was the ones with a strong loyalty program that could steer clear through the tough economic times. Although people had temporarily stopped flying, they continued to spend with the loyalty program partners, especially the co-branded credit cards, ensuring a strong source of cash flow for the airlines. 

 

This clearly shows us that a well-structured loyalty program can be a life savior for airlines during difficult times. 

 

With the right balance between airlines’ financial modeling and customer satisfaction, airlines reap billions through their loyalty programs. This requires a mix of the right loyalty consultancy and tech platform which comes together with Capillary and its acquisition of Brierley. 

 

At Capillary, we provide comprehensive traveler engagement solutions, built for the Aviation industry. By combining a robust CDP, advanced data segmentation, and AI-driven prediction, airline brands can create a loyalty program that gives incremental value to their travelers in every phase of their journey.

 

Find out more about Capillary’s aviation solutions here

 

Anjali R Pillai
Anjali Pillai

With a knack for creating engaging content and crafting effective social media campaigns, Anjali wants to make it her mission to leverage the power of content as a strategic marketing tool for businesses. While she is not working, she is either binging movies or writing about them on her blog.

Aauthor Name

Anjali Pillai

With a knack for creating engaging content and crafting effective social media campaigns, Anjali wants to make it her mission to leverage the power of content as a strategic marketing tool for businesses. While she is not working, she is either binging movies or writing about them on her blog.

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