In an increasingly competitive business environment, customer loyalty programs have become an essential ingredient in marketing plans of most businesses. This is based on the new marketing concept of Lifetime Value of the Customer wherein companies take into account the potential expenditure of the customer over his / her lifetime. As in other businesses, airlines too began offering loyalty programs in the early 80s, starting with the US carriers. A frequent flyer program (FFP) is a loyalty program offered by many airlines. Airline customers enrolled in the FFP accumulate frequent flyer miles or points corresponding to the distance flown on that airline or its partners. Last year, US carriers such as Delta have changed this equation of FFP miles accrued based on the distance to the ticket cost. This was done with an eye on their bottom line; corporate travellers who dont bother about costs will get more miles than leisure travellers who look for discounts on that same flight.
Most, programs award bonus miles to premium-cabin passengers (business and first class) and to elite-status members based on tier status. In most FFPs, a higher status / level can be attained by a member after accumulating the required number of flown miles, called elite-qualifying miles or EQMs, within a calendar year. This governs the members tier level which in turn will allow him or her to earn bonus miles and other rewards. e.g. Jet Airways’ Jet Privileges has Blue, Blue Plus, Silver, Gold and Platinum levels with number of JPMiles required to attain each level as 0, 7500, 22500, 45000, 67500 respectively.
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The primary method of obtaining points in a frequent-flyer program until recent years was to fly with the associated airline. Now, there are many ways to earn FFP miles, most of them without flying! In recent years, more miles were awarded for non-flight purchases. Did you hear of the The Pudding Guy whose real name is David Phillips, a civil engineer who teaches at the University of California, Davis? David shook up the frequent flyer world in 1999, when he converted more than 12,150 cups of chocolate pudding into 1,253,000 AAdvantage miles (Americal Airlines)! How did he do it? In 1999 he saw an offer by a pudding company called Healthy Choice which said that for every 10 bar code stickers of their product a mailed to them, they’d award 500 FFP Miles. Moreover, they had a condition that people who redeemed the offer within the first month of the competition would receive double the miles, which implied that one could earn 1000 miles for buying just 10 of their pudding cups. He even got members of the Salvation Army to help him peel off the stickers in exchange for free pudding.
Now, it is not a secret that frequent flyer programs enable you to get free flights and upgrades but there are other benefits as well. Here is the list of benefits:
Free Flights. Free flights are usually referred to as award flights. And they are for real. Airlines want you to come back and if you fly more often, then they have a loyal customer which they will hang on to. In the movie Up in the Air, George Clooney’s character Ryan Bingham is a frequent flyer who aims at earning 10 million miles (and he gets it)! While not many will relish the thought of living the life in a suitcase and rack up ten million points, it is possible to get enough points to fly to your next holiday for free. You will find that many travelers get frustrated at not being able to redeem the miles for free flights, since airlines have automated the process of seat availability using yield management and other algorithms in their systems. So sometimes, the seat availability may be an issue on blackout dates (say, Diwali, some days during vacation season etc.) or such seasonal fluctuations. In case of many airlines, these issues have been mitigated by alliances and partnerships between the carriers. But, we can get through this issue by simply booking the seats earlier.
Upgrades. If you have enough points, why not fly in style in business / first class? The wide seats, comfortable leg room, better dining experience and the quietness (rarely any screaming kids in higher classes) are good enough reason to opt for the upgrade. And the icing on the cake is when you disembark at your destination (for foreign travel), there is a separate, much shorter or non-existent queue at immigration / passport control counters. At busy international airports, I have found this to be a boon when we zip past the immigration counters. Did I mention that some airlines like Emirates also chauffer you in a limousine, for free!!?? If you are in luck, you can get a free upgrade – meaning no points will be redeemed. There is no set rule as to when this happens – some airlines will offer it when the higher class has vacancy and the economy class is overbooked. A recent survey has underscored the fact that the most likely people who can get a free upgrade are polite, well dressed people. So shorts and flip-flops won’t get you that coveted first class seat.
Discounts / Member-Only Offers. You may get discount for redeeming the points on the airline website or simply as an offer during a promotion period. For example, during the summer holidays, you may get an early bird promotional offer that will get you the seats way cheaper. As your status gets elevated to higher membership tiers (e.g. Silver, Gold etc.), you get bonus points which of course translate to more points.
Separate Check-In. Did you ever see Mumbai airport early in the morning? Hordes of passengers arriving from the Middle East countries make a beeline for check-in counters. Do you fancy standing in yet another queue (groan) especially if it is early morning? I just head over to the frequent flyer counter of that airline. The line here is non-existent or is much shorter and here I will be checked-in in a jiffy. Save your time and energy for better things!
Priority Boarding. Most airlines offer priority boarding for frequent flyers – so you get to board first as other passengers look on enviously! The tangible benefit is that you can stow your hand baggage in the overhead compartment without breaking a sweat.
Lounge Access. Airline lounges offer comfortable seating, privacy and exclusivity to the frequent flyer. All full-fare airlines have an airline lounge at the airports. So, if you are eligible, you get access to the lounge and get away for some time in peace.
Increased Check-In Baggage Allowance. Surely, you have heard of those airlines which have begun nickel-diming you for many things including your luggage! And if it is more than the prescribed limit, pay more. So, when you are heading back from vacation with all the souvenirs and shopping from duty-free shops you will appreciate the extra baggage allowance that frequent flyer account holder gets.