Loyalty in the midst of a crisis – are we still in love with our preferred travel brands?

The world’s biggest brands have seen their value decrease significantly during the COVID-19 pandemic, but loyalty remains an important tool. Before the global health crisis the value of loyalty was regularly being questioned. It had lost some of its value, but loyalty programmes have become an important tool to help airlines and hotels navigate the storm.

This is not any more evident than by airlines and hotels using them to generate liquidity. Recent disclosures by some of the world’s largest airlines project that their programmes are more valuable than the core airline. Things were already changing and the ongoing crisis could ultimately represent a catalyst for seismic change for loyalty programmes.

There have been some notable shifts – loyalty programmes have had to adjust for long periods to a non-flying and non-travel reality. In particular they have become vital tools to supporting some airlines in their hour of need, but would they actually be able to survive as standalone schemes without an airline.

In the ‘loyalty in the midst of a crisis’ series at CAPA Live, On Point Loyalty, managing partner, Evert de Boer has spoken to key individuals in the industry to learn more about how loyalty programmes have evolved through the coronavirus global health crisis and the role they will play in supporting the continued recovery of travel.

In Jul-2021, Jet Privilege Private, CEO, Manish Dureja said InterMiles, formerly the frequent-flyer program of now closed Indian carrier Jet Airways, “started as a frequent flyer programme… [but] is building towards becoming a platform of choice”. Mr Dureja said InterMiles “builds different platforms to enable experiences for our members and also to fulfil the lifestyle aspirations of our members”. He added: “We strive to find moments where we can save customers time by creating value at each touchpoint”.

The separation from Jet Airways enabled InterMiles to operate more flexibly and integrate data from multiple different sources to build a unified view of its customers. Mr Dureja said leveraging diverse data sources and integrating data enables InterMiles to create more personalised experiences and rewards and “helps us to make our marketing and communications far more relevant”. He said it also assists the programme “to influence purchase behaviour”.

Click on the image below to watch a CAPA TV recording of the CAPA Live session.

In Jun-2021, Air France-KLM, SVP customer loyalty, Frederic Kahane said coronavirus verifies loyalty programmes as a ‘true asset’. He said that not only in terms of engagement, but also financially, a loyalty programme can serve as a “strong shock absorber” for airlines. He added that the coronavirus crisis served as a verification of what the company has said “a couple of times already before… which is that the loyalty programme is being seen as a true asset of the group”.

Mr Kahane believes the path that Air France-KLM has followed “has proven to be very efficient”, reporting a “very steep increase” in members following the merger between the Air France and KLM loyalty programmes. He noted: “We didn’t lose anyone in this process, which was quite remarkable”. Mr Kahane added the success was “also very much related to the fact that the two airlines were very much complementing each other” in terms of network, “so at the end of the day… the same programme for the two airlines was making sense”.

Click on the image below to watch a CAPA TV recording of the CAPA Live session.

In May-2021, Singapore Airlines, VP loyalty marketing, Ryan Pua, highlighted that the Asian airline “focused on the needs of our members which is to help them secure and manage their rewards through extension and other proactive measures”. This is continuing despite flight recovery.

The airline has benefitted from the premium nature of its membership.”In the course of a year our members have redeemed a lot of miles, increasingly on lifestyle products as we expand our redemption offerings,” said Mr Pua

“We have a relatively small home base but our biggest advantage is our members are premium and they are very high spending in nature. I think the premium positioning of Singapore Airlines does benefit the loyalty programme and we have a strong advantage because our customer base is the who’s who of many countries,” he added.

Click on the image below to watch a CAPA TV recording of the CAPA Live session.

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