I was going through old e-mails (Easter weekend spring cleaning) and was bemused to see an August marketing e-mail from AirAsia poking fun at reward clubs with jibes like "pardon me random rewards card" and "what are you looking at Mr Buy 5 Get 1 Free Coffee Card?"
Only a few weeks prior AirAsia X chief executive Azran Osman-Rani remarked at a Sydney conference that the AirAsia group was mulling a frequent flyer program.
"The way I would look at frequent flyer points is not necessarily the way other airlines have looked at it," Osman-Rani starts. Indeed, two years ago Osman-Rani told me he shunned the thought of a frequent-flyer program. Now technological improvements have created new propositions.
"What has changed is this new engine--the [Navitaire] New Skies platform--and the ability to have a more robust and powerful CRM engine," Osman-Rani says of the booking engine and customer relationship management. "You can now have a real relationship with individuals," Osman-Rani says.
For instance, in exchange for storing all of my trips in an account so I can eventually receive a free ticket, AirAsia could receive valuable marketing information about me, such as where I like to fly, what ancillary options I choose. Rather than spend money on open marketing, AirAsia could spend that budget on a reward tickets.
"Our success relies on our ability to find the right way of connecting and reaching out to people and being able to execute it in a very efficient way," Osman-Rani says. Indeed, as Flightglobal publication Airline Business remarked in a recent editorial, "Airlines will need to plough copious amounts of their ever-scare cash reserves into truly reaching their customers and understanding their individual quirks."
AirAsia has always been improving its implementation, but technical limitations have impeded, for all airlines, faster and more efficient marketing. That is a hurdle AirAsia has been working to overcome. Last year the carrier raised eyebrows when it said a minimal cost advertising campaign on Facebook let it cut back on print advertising. Now New Skies permits the carrier to take another leap.
"It's about being able to create a program because you can do tailored one-on-one marketing, track purchasing patterns, histories, create deals and structures for them," Osman-Rani says.
Many marketing e-mails I receive from airlines are constructed based on what I have told airlines: where I live and travel from and what regions and offers I am interested in.
If AirAsia follows through with its thinking, it will now be New Skies predicting what I am interested in, and alerting me to special offers. But for New Skies to learn about me, it needs to know who I am, and what better way to get that information than a frequent flyer account where all of my trips are stored.
This is also good news for investors. AirAsia becoming leaner helps return dividends. For prospective AirAsia X investors, if the airline knows its passengers better gets them to travel more, that fuels the high growth trajectory the AirAsia X IPO is focused on.