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BBT March/April 2019 cover
March/April 2019

Loyalty: Play your points right

Loyalty schemes have been blamed for undermining travel policies, but they do have their advantages

Frequent flyer programmes have long been the bane of travel buyers’ lives. The ability to put points into an ever-expanding loyalty wallet is often irresistible for travellers, who book outside policy for personal gain. Not only does this undermine corporate deals, reducing the amount of business given by their employer to a particular airline, it also lays waste any duty-of-care. Passionate point-collectors are also financially frustrating to organisations whose policy is the lowest logical fare.

However, travel buyers can make corporate and leisure loyalty programmes work for them, and with careful planning enhance duty-of-care, traveller wellbeing and staff retention – and even save a bit of cash along the way.

One US software company allows employees to use loyalty points, provided they do not influence travellers’ decisions. It used to be a member of British Airways On Business but switched to negotiated rates due to levels of spend. “Centralised corporate loyalty schemes can be useful, but managing such accounts can be time-consuming, often to the point where the time and cost involved outweigh the benefits,” says Jef Robinson, category manager, meetings and events, global shared services, for the software company.

From the outside, it may appear that airlines change the rules with such regularity, they undermine the value of the schemes. “The goalposts do indeed move,” admits Robinson, “but most schemes tend to be well managed by the service providers. There can be some advantages on a corporate level as well as a personal traveller level. In fact, the use of loyalty schemes can actually support policy compliance.”

Rewarding travellers
So which airlines are pulling out the stops for their members? Programmes that reward businesses and travellers alike are largely aimed at SMEs or larger organisations with a smaller travel spend. Emirates’ business customers can sign up for Emirates Business Rewards and individuals benefit from Emirates Skywards points; similarly, Virgin Atlantic’s Flying Co (corporate)/Flying Club (individual), Etihad Business Connect/Etihad Guest, Singapore Airlines HighFlyer/KrisFlyer and Qantas Business Rewards/Frequent Flyer.

Company members of Air France KLM’s BlueBiz earn Blue Credits every time their travellers use Air France or KLM these can be converted into flights, upgrades, seat selection, extra baggage and time to think, which allows bookers to guarantee their reservation and rate for three days. Since November, these benefits also apply to BlueBiz members booking on Delta Air Lines flights. Individuals can sign up to Flying Blue to earn personal miles simultaneously. In addition, Corporate Priority from Delta Edge offers those flying on Delta Air Lines benefits that include preferred seats, check-in recognition, clear preferred pricing, denied boarding prioritisation and priority boarding.

SAS for Business was launched this year to replace SAS Credits. The new programme applies (corporate) discounts at the time of booking, which are calculated according to spend and class travelled, and are also applicable to Singapore Airlines and Wideroe services.

Lufthansa Partner Plus Benefit is valid with ten other Star Alliance members. Points cannot be used to buy tickets at negotiated rates but can be exchanged for Benefit Free Flight with partner airlines in all four classes, booked via the service centre. Members of the Partner Plus programme can also earn and redeem points on United and select other Star Alliance carriers.

BA’s On Business recognises employer and employee with On Business points and Avios respectively. A company earns points or receives discounts as applicable to their booking and reward flights can be redeemed across American, BA and Iberia networks.

Some companies make massive savings from the programme. However, Hero Trew, global travel manager for Endeavour WME IMG, says: “We were, until recently, a member of BA’s On Business, but BA took us off as we were not considered to be an SME – and we were probably too good at redeeming our points!

“We now have an improved route deal (since the beginning of 2018) but have yet to calculate the savings from switching to the new route deal. On Business delivered us savings of around £175,000 in 2017.”

Meanwhile, a financial services client of Corporate Traveller accrued sufficient points with Swiss to save £3,000 on its hotel spend in the past 12 months by redeeming points against hotel vouchers on the Star Alliance Partner Plus Benefit programme.

New trends
The most recent change in the common loyalty programmes is the move away from awarding points for miles flown and towards a revenue basis. American carriers led the way in 2015 and Oman Air, Air France KLM and Lufthansa have followed suit.

“British Airways says it will shift Executive Club to that model as well,” says Phil Seward, senior vice-president, loyalty strategy Americas for Collinson. However, BA told BBT: “There aren’t any immediate plans to do so.”

Although longer journeys are more expensive, revenue and mileage-based rewards do not work out the same; tickets from London to Rio and Tokyo (both around 9,000km), for example, would cost different amounts and, because points are calculated on fares less taxes, businesses spend more than travellers are rewarded for.

Unusually, however, both airlines and buyers see the change as positive. It removes the inequity created by rewards based on kilometres flown and booking class, and it rewards organisations that spend a lot on air fares. It might, however, act as an incentive to rogue travellers to book late in order to pay a higher fare and be rewarded for it. It’s swings and roundabouts.

Airlines have also ensured travellers can earn without leaving the ground and credit card partners are particularly popular. “The primary intent of a co-branded card is to provide the opportunity to earn on everyday spending, such as grocery shopping, daily coffee, and it gives the individual a way to earn significantly more of that currency,” says Seward, although he admits: “The decision whether to use a loyalty card or corporate card is always there.”

Airline alliances
Meanwhile, with more airline partnerships being formed, and alliances in general gaining more clout, it is surprising that there is currently no single loyalty programme that operates across one alliance. However, participant airlines recognise the members of each other’s programmes and travellers can generally choose which currency they earn in.

And with airline distribution becoming more complex for travel buyers, even taking NDC out of the equation, thankfully airlines remain booking-channel agnostic when it comes to allowing travellers to accrue their points for miles – for now.

This is a big difference compared to hotel loyalty schemes, which notoriously tempt their programme members to book direct for in return for extra rewards. In fact, airlines are surprisingly shy of admitting to courting members, although they do say they poll them to ensure the programmes continue to match members’ requirements and expectations.

“While the benefits offered with our customer loyalty programme go a long way to recruit new customers, we also run appreciation and celebration events throughout the year to ensure our customers know how valuable they are to us,” says Benedicte Duval, general manager UK and Ireland, Air France.

Lufthansa Group, meanwhile, also pays back loyalty in its own way: “We invite customers and travel managers to breakfast meetings to introduce them to our team and discuss how the programme can best support them in their business travels. To keep up to date about special promotions and news, we offer customers a regular newsletter,” says Andreas Koester, senior director sales UK, Ireland and Iceland.

Loyalty schemes continue to evolve and compete in their quest to attract travellers. Being pragmatic, finding the right corporate programme for employees and encouraging its use is the most positive way towards achieving compliance and keeping travellers happy in the process.

Collinson’s tips: Making the most of loyalty points
Think strategically: Join the corporate programme that gives you the greatest coverage across the airlines and routes your employees utilise most often, ensuring the greatest opportunity for earning and redemption. Focus on one primary carrier within an alliance, offering co-branded credit cards, and with the lowest threshold for earning elite status.

 Start socialising: Follow the airline’s social media accounts to find out about promotions and offers; this can also be a responsive channel for traveller issues.

 Mix and match: Ensure your employees are enrolled in the airline’s consumer frequent flyer programme, so they can earn miles and take advantage of other benefits.

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