The first customer- loyalty programme was started by the American Airlines back in 1981. Since then, this has gained currency with almost everyone else jumping in. These have also been used in selling to third parties. Unfortunately for customers, the ratio between the rewards and air miles traveled has only kept getting worse off, with trillions of frequent flier miles sitting unspent as of now. Greater amount of business innovation is needed by such loyalty programmes to generate value. For this, first of all, the airlines must look beyond merely airline seats. Late booking redemptions need also be rewarded. The redemptions must be based on a dynamic policy. The pricing policy on redeemed seats also needs a clear, strategic rethink. Whatever redemption value has to be planned, it needs a greater customer- value view. Partner airlines must collaborate more on redemption schemes.

Source:https://www.mckinsey.com/industries/travel-transport-and-logistics/our-insights/miles-ahead-how-to-improve-airline-customer-loyalty-programs

Uploaded Date:29 December 2018