LCCs and loyalty – no longer oil and water
HYBRIDISATION between
airline business
models is a dynamic of
the aviation industry, blurring
boundaries between legacy
and low-cost carriers (LCCs).
To name an example,
charging for ancillary
services, once the custom
of LCCs, is now practised
widely across all airlines.
LCCs, for their part, are
increasingly rewarding
frequent flyers, if not
through their own
programmes, by affiliating
with partner airlines or
consumer loyalty plans.
This is perhaps recognition
of the importance of a
loyalty programme in an
airline’s customer offering,
a lure customers have come
to expect, despite the wellpublicised
difficulties in
ticket redemption.
South Africa’s LCC
environment is, to date,
confined to the domestic
market and distinctly
different from the European
and American scenarios.
TNW asked stakeholders
whether it made business
sense for LCCs, operating
on narrow margins, to offer
loyalty programmes.
Currently, FlySafair does
not have a customer reward
programme in place. Ceo,
Elmar Conradie, said the
question wasn’t really
whether to implement a
loyalty programme, but how
to implement one that would
not only benefit customers,
but make business sense.
“We won’t compromise
our low-cost offering to all
for the sake of a loyalty
programme that will only
benefit the frequent flyers.
We have always taken the
approach to rather give our
low fares to all the travellers
instead of subsidising
frequent flyers with higher
prices throughout. We are
already providing discounted
fares and a loyalty scheme
is another discount on these
fares. We are, however,
looking at alternative ways
we can reward frequent
flyers, like including
complimentary services that
they would normally pay for,”
he said.
FlySafair focuses on
achieving loyalty through
competitive fares, its
route network, on-time
performance and by running
regular specials. As a first
step toward offering frequent
passengers free services,
it recently launched a client
login portal on its website,
where customers can track
flights, customise their user
profiles, and save personal
details to make the booking
process easier with
autofilled information.
By comparison, kulula.com
is associated with a number
of loyalty programmes
such as Discovery Health,
Avios and eBucks, and has
its own gold credit card.
It operates alongside a
traditional carrier, Comair,
and is associated with the
large legacy airline, British
Airways.
Shaun Pozyn, head of
Marketing, Customer
Experience and Loyalty,
said there was no ‘one
size fits all’ approach to
formulate a non-traditional
loyalty programme for an
LCC. “The airline would
need to be willing to invest
time, money and resources
to ensure that the model
was set correctly and that
it would be beneficial to its
customers, as well as the
business,” he said.
A partnership approach,
where the airline linked with
other loyalty models that
were already successful, did
make sense, said Shaun.
This was the reasoning
behind kulula.com’s recent
association with Avios.
“Avios is a successful global
loyalty programme and, by
doing this, kulula.com can
focus on our core business,
which is flights, Avios can
focus on its core business
which is loyalty, and this
creates a win/win for kulula,
Avios and our customers.”
Processing reward tickets: drudgery or delight?
FOR many travel
consultants, assisting
clients with a frequent
flyer redemption is an
onerous task. Depending
on the airline, it can entail
lengthy telephone queues,
the frustration of dealing
with a different voice with
each call, and lack of seat
availability. Making changes
to the booking is just as
exasperating.
Sarah Thom, a Club
Travel-branded ITC, says
she only undertakes a
frequent flyer booking
“once in a blue moon”, and
only for regular corporate
clients. The online process
is pretty simple, she says.
When it comes to making
changes, she crosses that
bridge when she comes
to it. “It doesn’t happen
often, maybe twice a year,”
she says, “but then again
I don’t have a massive
corporate client base. For
leisure clients, I would
advise them to arrange the
ticket themselves.”
An option to book seats
via a GDS to avoid call
centre calls would be
welcome, says Sarah.
In her aim to be a onestop
shop, Caron Crocker,
also a Club Travel ITC, does
assist with frequent flyer
tickets but admits it can be
a hassle, particularly if she
hasn’t issued a specific
airline for a while and has
to re-acquaint herself with
procedure. She points
out that the travel agent
has to be nominated on
the client’s frequent flyer
account to make bookings.
“Making changes is
not so straightforward
as it’s often difficult to
get availability. Recently,
I had a client wanting to
change a BA Comair ticket
but there were no seats
available, so he just kept
his original booking as is.”
Sarah’s service fee for
frequent flyer bookings
is 10% of the available
economy-class airfare;
Caron charges R285
for domestic flights
and R500-R750 for
international flights.
For their part, suppliers
we spoke to did not
experience reluctance
on the part of travel
consultants to book loyalty
tickets.
According to Turkish
Airlines gm Cape Town,
Kenan Ince, since the
airline has increased
capacity, consultants don’t
mind the task, as long
as the process is easy.
The additional capacity
has also improved the
availability of redemption
seats.
Ethiopian Airlines’
regional manager, Abel
Alemu, says travel bookers
are always given the
information on how to
process frequent flyer
requests and the airline
will always assist.
“On Ethiopian Airlines,
you can redeem or upgrade
with miles up until 24
hours prior to departure.
In economy class there
is sufficient allocation for
reward bookings, however,
in business class there is
a perception that there is a
limitation on seats.”
This, says Abel, is
because of varying
seat capacities on
different aircraft, and two
redemption options – a
business-class award ticket
and a business-class
upgrade. The two options
have different booking
class allocations.
“With kulula, Avios can be
redeemed and earned on
any flight and at any fare
so there are very limited
restrictions. The only
restrictions in the model
are having enough Avios
on the customer’s part,
and seat availability on
the aircraft,” says Shaun
Pozyn.
Air France KLM gm
Southern Africa, Domingo
De Cola, says the airline
has not encountered
consultant reluctance, as
all requests related to the
Flying Blue programme
must be made directly to
the Flying Blue contact
centre by the programme
member and not the
travel agent. He points
out too, that Flying Blue
won the ‘best redemption
ability’ category at the
2016 Freddie awards, a
poll conducted among
frequent travellers. In
addition, earlier this year
the airline added seven
award booking classes
in economy. “Lastly, we
find that sourcing local
partners for members to
be able to burn smaller
amounts of miles is also
advantageous,” he says.
Virgin Atlantic constantly
reviews seat allocations
for frequent flyers, says
manager, Marketing and
Communications South
Africa, Darrin Thomas:
“We also offer many other
ways for our frequent flyers
to use their miles, such
as hotel partners, lounge
access and upgrades. We
also offer something called
‘Miles plus Money’ where
our frequent flyers are able
to use miles for a discount
on a ticket, sometimes
using enough miles to
cover the full costs.”
Asked if the airline’s
recent tie-up with Air
France KLM would entitle
Virgin Atlantic passengers
to share in the benefits of
the new partner’s loyalty
programme, along with
Virgin’s own Flying Club,
Darrin said: “As we are
still under talks, we cannot
comment.”
However, Virgin Atlantic
ceo, Craig Kreeger,
recently told the news
service Skift.com: “I think
for our British customers
the biggest upside is a
much better frequent flyer
proposition. If you’re in
the UK, you’ll be able to
earn and use Flying Club
miles not just on Delta
and Virgin Atlantic flights,
but on Air France and
KLM – giving access to a
full range of places where
our customers might want
to go on holiday but they
typically wouldn’t have
been able to use their
miles to do that.”
Hopefully the South
African market will benefit
similarly.
Craig pointed out that
when a good loyalty
proposition was coupled
with a preferred service,
they combined to create
more loyalty than just a
loyalty programme alone.
Rewarding the booker is a win for all
SUPPLIERS who reward the
booker in addition to the
customer, have found the
tactic to be beneficial to
business.
First Car Rental has an
incentive scheme for the
trade, subject to the rate
booked per agent or agency
depending on their desired
structure.
“It rewards agents
for their loyalty by
accumulating a booking
fee and the pay-out
occurs monthly on
to their CashCard, a
system First Car Rental
uses to facilitate bulk
payments to process
incentives seamlessly
and automatically,”
says Melissa Nortje,
executive head: Strategy,
Development & Marketing.
Avis Budget Rent a Car
offers travel consultants
rewards through ClubRed
membership, where South
African travel agents
earn ClubRed Roses for
every qualifying Avis or
Budget rental reservation.
According to Lance Smith
of Executive Sales, those
on loyalty programmes are
more active and loyal than
those who are not.
Club Claude is the name
of Club Med’s agency
loyalty programme, which
comes with benefits
such as the chance to
experience a Club Med
resort, based on booking
support.
André Dafel, national
sales manager, says the
opportunity can be in
the form of a guaranteed
spot on the operator’s
much-talked-about ski
familiarisation trips, or on
an agent’s own discounted
trip, with or without a
partner, to, for example,
Club Med Kani in the
Maldives.
Few airlines operate
local rewards schemes for
agents on the frequent
flyer model. Much effort is
put into booking platforms
and travel agent portals
for ease of booking, while
other support comes in
the form of commissions
and overrides, educational
travel, promotional
campaigns and incentives
such as vouchers.
Virgin Atlantic, for
example, has an agency
site called VS Flying
Hub. “Not only does
this site keep the
agents updated with
everything and anything
in Virgin Atlantic, we also
frequently run incentives
and competitions. At the
moment, we are running
an incentive to win a a
trip to Cancun, Mexico,”
says Darrin Thomas,
manager, Marketing and
Communications South
Africa.
Air France KLM offers a
frequent booker programme
for travel agents abroad,
but has yet to introduce it
in South Africa.
Airside transfer prevents missed flights
BRITISH Airways is
introducing a new service
called Premium Transfer
Drive at Heathrow to
ensure that customers
who are at risk of missing
their connection are able
to catch their onward
flight.
The new scheme
applies to customers
travelling on a UK
domestic flight, who are
connecting on to either a
short-haul flight in Club
Europe, a long-haul service
in Club World (long-haul
business class) or First,
or who are Silver or Gold
Executive Club members.
British Airways’ team at
Heathrow will track these
customers, and where
there’s a risk of their
missing their connection,
will provide an ‘airside’ car
transfer between one flight
and the next.
They will also send a
message to the inbound
aircraft, so the cabin
crew can inform the
customer that a car will
be waiting to transfer
them, thereby alleviating
any stress or worry.
What’s new…
City Lodge Hotel Group (CLHG)
City Lodge rebranded its frequent
guest programme earlier this
year, replacing the Lodger Club
with CLHG Rewards. The group
has added the benefit of points
redemption for bed and breakfast –
previously redemptions were based
on room only. The programme
remains an online incentive
programme.
New members receive 100 free
CLHG rewards points on signing up,
there are no block-out or availability
restrictions and points are valid for
three years. City Lodge is also a
Clicks ClubCard partner.
Club Med
Club Med’s Great Members
loyalty programme has four tiers
– Turquoise, Silver, Gold and
Platinum – and points are earned
on rand spend, referrals and
frequency. Benefits, dependent
on tier, are many and include
customised offers, discounts,
partner deals, private transfers,
room upgrades, private dinners,
discounted excursions and
boutique purchases.
First Car Rental
First Car Rental offers two loyalty
programmes. First Club Card,
for the consumer, offers vehicle
upgrades, discounts and free days,
with the most popular redemption
choice being vehicle upgrades.
Quick checkout is made easy by
retention of renter information,
retrieved by 2D barcode scan.
The Show&Go Card is a facility
for corporate frequent flyers. When
collecting a car, holders of this preapproved
company card need not
go into a branch at all; they can
go straight to their vehicle after
landing and are checked within a
minute by an agent on
FlySafair
FlySafair has been ranked the
world’s most on-time airline
up to March 2017 by air travel
intelligence specialist, OAG, with
an on-time performance (OTP) of
95,94%. It is one of just three
airlines to receive a five-star rating.
The airline is eagerly anticipating
the next 2017 OTP announcement,
expected this month.
At the end of November, FlySafair
starts two new routes, Port
Elizabeth-Durban and East LondonDurban,
and increases frequencies
on existing routes. Total aircraft
fleet will reach 12 by year-end.
Ethiopian Airlines
Ethiopian Airlines introduced a
Platinum tier level in its frequent
flyer programme, ShebaMiles,
earlier this year. This tier offers
extra benefits to frequent flyers
who accrue 75 000 status miles or
60 qualifying segments within one
calendar year, within the validity
period of two years, in addition
to the remaining months in the
qualification year. The airline also
recently redesigned its ShebaMiles
web page to improve customers’
online experience.
Avis Budget
The Avis Budget loyalty programme
is now available via an app where
customers can see their status
and redeem earned benefits. For
payment, the car-rental firm offers
both virtual card and plastic options
Turkish Airlines
Turkish Airlines has introduced a
frequent flyer Miles & Smiles help
desk at Istanbul Ataturk Airport.
Missing Star Alliance miles can now
be claimed online in passengers’
Miles & Smiles accounts.
Avis, BA renew partnership
AVIS Rent a Car has once
more been selected the
global rental partner for
British Airways Executive
Club, a partnership that will
be in force over the next
five years. The affiliation
has also been extended to
include the Budget brand.
The partnership gives
frequent travellers the
opportunity to earn points
in two loyalty programmes,
doubling up on possible
rewards. Notable benefits,
among others, include Avios
and a free additional driver
on every rental.
Executive Club members
can join the Avis
programme with ease,
linking their BA membership
to the car-hire company
through a simple online
process.
Perhaps the most
significant benefit of the
now well-established
Avis Preferred Loyalty
Programme is its global
stretch. Members earn
points and claim all benefits
via one customer number
that holds a full customer
profile and is internationally
recognised at 3 500 rental
stations around the world.
Furthermore, points are
earned across all products,
including the car and luxury
car fleet, van, truck and
safari fleet, as well as
chauffeur-drive services.
Benefits come in the form
of fast-track service and
pre-prepared paperwork, the
most convenient parking
spots, free upgrades and
free weekend rentals.
The company offers three
types of reward vouchers
– Money Off, Upgrade and
Weekend Vouchers (T&Cs
apply). These are issued
as early as the completion
of the second rental, and
again are redeemable with
Avis Rent a Car worldwide.
Avis has made available
all these benefits on a
customer friendly mobile
app that ensures an
electronic delivery.
Members move up the
three tiers based on
rentals and spend, starting
with Avis Preferred, to
Avis Preferred Plus and
ultimately Avis President’s
Club.
Preferred members no
longer receive plastic loyalty
cards. These have been
replaced by virtual loyalty
cards delivered via the app.
“Travel consultants’ lives
are made significantly
easier by the Avis Preferred
Loyalty Programme,” says
Lance Smith. “Simply
inserting the Avis customer
number in the booking
process will ensure our
mutual customers get
exactly the same service
and benefits that they have
requested,”
Experiential travel enters loyalty
AN INCREASING number
of hotel groups around
the globe now offer
extraordinary experiences
for elite loyalty programme
members, indicating
their desire to be more
involved in the whole travel
experience of their guests,
and not just the on-site
portion of the trip.
According to industry news
service, Skift.com, Marriott
Rewards and Starwood
Preferred Guest recently
announced the launch of
Master Classes, special
learning experiences that
members can take part in,
under the wing of celebrities
and leaders in sport, food
and entertainment.
David Flueck, senior vice
president of global loyalty
for Marriott International,
was quoted as saying
that loyalty went beyond
spending nights in hotels
and had expanded to
offer once-in-a-lifetime
experiences.
“Travel, more broadly, has
always been about enriching
the soul, meeting new
people, seeing new places,
and learning on your travels.
To tie into their experiences
has always been core to our
programme,” he said.
