This year's annual Airline Business/Global Flight Loyalty event comes to Fort Worth, Texas, at a timely moment both for the city's home carrier and the sector in general. This year marks 30 years since American Airlines launched the industry's first frequent flyer programme, AAdvantage (see below). But it also marks a crucial stage in the evolution of airline loyalty programmes.
After one of the toughest economic environments the industry has ever endured brought a tendency to focus on maximising revenues that FFPs could deliver, the brighter economic prognosis for many of the world's airlines gives an opportunity to return to longer-term aims.
Managing director of frequent flyer programme specialist Global Flight, Ravindra Bhagwanani, explains it is much more about delivering value to the airline, then just generating revenues. "Everyone needed it to make a bit of money," he says, noting that as the situation gets a bit better airlines can afford to look at the wider picture.
21-23 February 2011
Fort Worth, Texas
"It is more important to create value through loyalty. It is a bit about going back to basics, but with a much more sophisticated methodology. We should have more know-how now," he says. Bhagwanani, for example, cites the approach of US carrier JetBlue
to the way it uses social media and customer relationship management in its approach to its loyalty programme. "It has a much more holistic approach," he says.
JetBlue's director of loyalty marketing & partnerships David Canty is among the participants for a panel discussion at Loyalty exploring how social media is more than just a gimmick, a session which also includes SAS manager CRM strategies EuroBonus, Thomas Bruhn.
Other sessions planned for Loyalty cover ways in which programmes can be develop CRM and a look at the key challenges facing the sector. Innovation within the sector is also a focus. "We are seeing innovation across the spectrum," says Bhagwanani. "That goes from everything from social media to pushing technology development issues. So you've really got a lot of different areas you can be innovative. But the main objective is to create value for your best customers."
AADVANTAGE MARKS 30TH ANNIVERSARY
Loyalty 2011 comes to the home of American Airlines in February, just as the oneworld carrier marks the 30th anniversary of the industry's first frequent flyer programme, AAdvantage.
"It's funny that in many ways the core principles behind the AAdvantage programme are the same now as they were when it was first introduced," says president of AAdvantage Loyalty Programme, Maya Leibman, who will be among the speakers at this year's event. "That said, if you ask anyone who was involved in the launch of AAdvantage back in 1981 if they had any inkling it would evolve into what it is today, I'm sure the answer would be no!"
The AAdvantage programme now has more than 66 million members, earning miles across more than 1,000 companies including 20 airlines.
"One of the big drivers of programme change has been the evolution of technology which has made the programme more widely accessible and easy to use," Leibman says.
Looking further ahead, one of the key challenges facing the sector is maintaining the value of the programmes. "In the airline industry, we must always check ourselves to ensure we are maintaining the right balance between miles earned and award seat availability," says Leibman.
"We also have to be aware and constantly look for new ways to differentiate the programme from those of our competitors and in some cases those of competing credit card offerings."
Much has changed since the first programme was launched, not least the competition - both from rival airlines and other industries. An ever expanding range of companies, with developing sophistication, are entering the loyalty programme world. Leibman acknowledges the need to find ways to "stay relevant" and on the edge of what customers consider a good value proposition.
"Loyalty and revenue cannot be mutually exclusive, but rather they must be and are tied together very closely," she adds, noting it is in the best interest of American Airlines to have a programme that drives customer loyalty. "If we are successful in accomplishing that goal, then we are successfully generating revenue for the company," she says.