Coronavirus and Loyalty programmes

Desperate times call for desperate measures. However, experts think that the answer to the crisis cannot be found in extreme promotions. Airlines need to make sure that they will not fall back into old habits, instead they should walk the path of innovations, customer intelligence and financial responsibility. 

Loyalty programmes have shown their worth to the airlines again during the first phase of the corona pandemic. 

Co-branded credit cards

When air traffic was brought to a hold in March and April of this year, the use of credit cards continued. This is the reason that the cash flow of so called ‘co-branded credit cards’ could continue flowing. Co-branded credit cards are credit cards that will be issued by a bank or card network and a retailer. These credit cards will often be in collaboration with airlines and their loyalty programmes. For example, the loyalty programme of Air France-KLM: ‘Flying Blue’ in collaboration with American Express. With the use of these credit cards you can earn miles while paying. These miles can be redeemed for exclusive rewards from the relevant airline.

Innovations loyalty programmes 

One of the reasons that makes the use of loyalty programmes so popular is that they are constantly reinventing themselves. Significant gains have been made in the past years by just looking at what is wrong with the original model and improving it.

Customer intelligence and airlines

Loyalty programmes are in many ways constructed to maintain customer engagement. They do not only represent the biggest archive of clients for an airline, they also offer the highest concentration of transaction, socio-demographic and behavioural data.

T The combination of individual customer data provides an important marketing tool, giving airlines the opportunity to deliver the right message to the right customer. Even at a rudimentary level, this can result in an better understanding of the customer.

Financial responsibility of airlines

The loyalty programmes of airlines can play an important role in weathering the financial storm, in short term and in the long run. But before any of this can happen airlines must ensure that there is an proper structure. A good structure makes sure that the value of the programme can be precisely calculated and expressed.

Some of the market leaders of the aviation industry created separate segments or entities for their loyalty programme (Flying Blue for Example), but the biggest part of the aviation industry keeps hiding it under their own name. 

Before a loyalty programme can run at full speed, clarity about the requirements for transfer within and between companies is needed. Especially in the near future, when the airline’s earnings are expected to be below par, a well-defined and managed loyalty segment could play a crucial role.

Joe Kuijpers

As chief operating officer I am responsible for the operational affairs within Claim24. My daily activities consist of monitoring or improving our services and managing our team of enthusiastic employees in the Netherlands and +10 international countries.