How Can Airline Loyalty Programs Remain Relevant in the Face of Ongoing Disruption?

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By: Wise Marketer Staff |

Posted on August 23, 2022

MarPay solutions connect FFPs to everyday retail to drive customer engagement.

Following the easing of travel restrictions, holiday makers have been booking flights in record numbers. While the 2022 ‘summer travel boom’ was widely predicted, data gathered by the aviation analytics consultancy, Cirium, revealed that even in April scheduled flights were at close to 90% of the levels seen in 2019. But the aviation industry has struggled to keep pace with the surge in demand and few foresaw the intensity of disruption seen in recent months. Staff shortages due to Covid related absences have resulted in high volumes of flight cancellations, and airlines and airports alike have been unable to bolster stripped back workforces at the rate needed to get planes off the tarmac.

By: Lansy Joseph, Head of Pointspay at Loylogic

The transition back to full operational capacity was never likely to be a completely pain-free experience and the industry is optimistic that it is on the path to recovery. But in the current climate of uncertainty, accurate forecasting is a challenge. London Heathrow (Europe’s largest airport) has dampened the mood by predicting a “winter freeze” because of slowing global economic growth, rising fuel costs, and Russia’s war in Ukraine. While we hope that this will not come to pass, we may see more turbulence in the coming months and the industry needs to be prepared.

As airlines reassess strategies and tactics to navigate this next chapter, loyalty programs (one of their most valuable assets) have an important role to play as an additional revenue stream in supporting the industry’s financial recovery. Over the past two years, members have had fewer opportunities to earn and spend points on flights. On top of this, business travel has been slower to bounce back and may never return to the levels seen pre-pandemic due to the rise of virtual meetings. Loyalty programs therefore need to create an offering that goes beyond traditional core rewards to keep their most loyal members engaged, even when fewer flights are in the air.

Frequent Flyers? Frequent Shoppers.

One way in which airlines can give their loyalty programs renewed relevance, when traditional travel perks may be less appealing or available, is by giving members the opportunity to earn and burn points on everyday shopping. While the online commerce space is familiar territory for programs, the points accrual process via traditional affiliate marketing solutions is filled with friction which can negatively impact customer engagement. And the reality is that few people see their favorite airline loyalty program’s landing page as a go to destination to shop for a handbag or a box of chocolates.

Solutions like Pointspay that harness the latest in MarPay technology, sit at the intersection of affiliate marketing and payments systems. By combining the best of both worlds, Pointspay allows members to earn and spend their points when purchasing goods directly from the website of partner retailers. This opens new avenues through which members can either accrue or put their points or miles to use — and with the option to pay with points in combination with cash, they gain total flexibility and control in how they deploy them at checkout.

By taking advantage of MarPay solutions like Pointspay, programs can create powerful 1:1 relationships as members continue to associate rewarding experiences with their loyalty program provider. And amid a worsening cost of living crisis, consumers also need to be able to tap into all their assets to maximize spending power.

Here, loyalty program points can act as an alternative ‘wallet’ for customers who may not be flying so frequently but would appreciate support when it comes to affording — or getting greater value from — everyday purchases. Loylogic recently teamed up with the online supermarket, Farmy, giving SWISS Miles & More members the ability to pay for their everyday groceries with a mixture of points and cash, as well as earn. Indeed, for every one franc spent on groceries via Pointspay, members will receive one mile paid directly and instantly into their Miles & More loyalty account offering a new way to earn points while the airline industry scales back up to full operational capacity.

For airline loyalty programs, capturing a share of online retail spend was previously seen as an opportunity to generate incremental revenues outside of their core business. Today however, it is a vital way for programs to make points more liquid and to stimulate additional earning of miles ensuring their most valuable customers continue to feel rewarded.

Lansy Joseph comes with 15+ years of international experience in product innovation and solution architecture in Loyalty, Travel, eCommerce & Payment domains. Prior to joining Loylogic, Lansy was associated with IBS Software Services in India, a leading global provider of software products to the Travel, Transportation and Logistics industries.