The Frequent Flyer Privilege

The Frequent Flyer Privilege In early 80s when American Airlines introduced its customer loyalty and reward program, food was awful, seats were uncomfortable and margins were sky high. The frequent flyer privilege translated into a meager ticketing discount and a booking priority, no member-only queues, no alliance (air travel) network deal, no dedicated support and no executive lounge. Today, KRZHYHU LWÂśV D GLIIHUHQW VWRU\ 3RSXODUL]HG E\ WKH *HRUJH &ORRQH\ IOLFN Âľ8S LQ WKH $LUÂś WKH frequent flyinJ FOXE LV DERXW QRYHOW\ DQG VWDWXV LWÂśV DERXW EHLQJ JUHHWHG DW HYHU\ WHUPLQDO VPLOHG DW HYHU\ VWRS KXUULHG WKURXJK WKH VHFXULW\ V\VWHP DQG EHLQJ WKH ILUVW RQH RQ ERDUG ,WÂśV DERXW OX[XULRXV WUDYHOLQJ EHLQJ PDGH SRSXODU DJDLQ RQO\ WKLV WLPH LWÂśV WKH HDst that leads the charge.

Current Developments: With the Asian and Middle Eastern airlines dominating travel charts worldwide, there is clear shift in the air-EUDQG KLHUDUFK\ 4DWDU $LUZD\V RQH RI ¾ELJ WKUHHœ $UDE FDUULHUV ZDV FURZQHG WKH top airline for WKH VHFRQG \HDU UXQQLQJ LQ WKH DQQXDO 6N\WUD[ UDQNLQJV ³:H DUH WDONLQJ about a fleet with an average age of four years. These newly designed aircrafts are packed with FRPIRUW DQG WHFKQRORJ\ ´ VKDUHV D WUDYHO DJHQW LQ 'RKD :KLOH UHODWLYHO\ \RXQJ 4atar, Etihad DQG (PLUDWHV KDYH FRQVROLGDWHG D VWURQJKROG RYHU FRQQHFWLQJ LQWHUQDWLRQDO IOLJKWV ³4DWDU DQG 8$( DUH UHJLRQDO KXEV FRQQHFWLQJ $VLD ZLWK WKH UHVW RI WKH ZRUOG ´ VKDUHV -DODO-u-din Jami, a UHVHDUFK DQDO\VW DW /LYH$GPLQV 8$( DGGLQJ ³:KLOH Whe airlines (big three) benefit from the strategic location of their offices, their ability to innovate and provide premium customer service LV ZKDW PDNHV WKHP D JOREDO VXFFHVV ´ Loyalty Programs: While loyalty programs are predominately associated with western brands, a lot of global brands are now employing customer retention strategies that involve issuing club memberships, return viVLWRU GLVFRXQWV SXUFKDVLQJ SRLQWV DQG UHGHHPDEOH UHZDUGV HWF ³:H KDYH VHHQ WKLV WUHQG WDNH precedent in the global retail segment. Most supermarkets and pharmacies (international chains) LQ WKH 86 KDYH VRPH VRUW RI OR\DOW\ SURJUDP 6PLWKœV 2IILFH 'HSRW %HVW %X\ 6HDUV 6WDSOHV HWF DOO RIIHU FOXE FDUGV WKDW RIIHU GLVFRXQWV RQ IXWXUH SXUFKDVHV RU EXQGOHV ´ H[SODLQV +DUU\ Llyod, an e-marketing consultant from Chicago.

However, the strategy works in two fold, where frequent purchasing or travel is incentivized the organization is not only able to improve the chances of repeat business, but also learn about their customers. Most, club memberships require customer to send in some basic information which is WKHQ XVHG WR EXLOG D FXVWRPHU SURILOH ³(YHU\ WLPH D PHPEHU VZDSV D OR\DOW\ FDUG DW WKH 326 (Point of Sale) terminal, you can narrow down their buying patterns and preferences. Given the identifier (customer profile), businesses can personalize products and service delivery. This not RQO\ HQKDQFHV WKH FXVWRPHUœV H[SHULHQFH EXW LPSURYH EUDQG EXVLQHVV OR\DOW\ $SDUW IURP WKLV OR\DOW\ VFKHPHV DOVR KHOS DWWUDFW ¾KDELWXDO EX\HUVœ ³,Q WHUPV RI SURILWability, the ideal customers are those that either shops out of habit or out of (brand) loyalty; and discount (privilege) club FDUGV KHOS DWWUDFW ERWK ´ VKDUHV /O\RG Other similar techniques include punch cards, more frequently utilized by book store and cafÊs.

Here, the buyer is allotted a card on purchase of an item/service, the card is then punched subsequently for every future purchase, and once the customer attains a predefined number of ÂľSXQFKHVÂś WKH\ DUH XVXDOO\ HQWLWOHG WR D IUHH LWHP VHUYLFH RU D discount.

The Frequent Flying Club: Similar, to other loyalty programs, most airlines today offer their frequent flyers redeemable awards, discounts and other premium services. However, notoriously popular for their H[WUDYDJDQFH WKH $UDE ÂľELJ WKUHHÂś KDYH been the cause of envy for many competing airlines.

Between tier lounges, celebrity chefs, extravagant buffets, inflight entertainment, and chauffer services, the Arab airlines (big three) have a knack for attracting first/business class travelers.

While relatively new in the privilege flying club market, the big three are benefiting immensely from a well-GHYHORSHG LQIUDVWUXFWXUH 4DWDU $LUZD\ÂśV SULYLOHJH FOXE FXUUHQWO\ KROGV IRXU WLHUV each of which carries its own set of benefits. Gold members are entitled to a first class treatment both at the airport and while boarding, irrespective of their travelling class. While Etihad and Emirates too offer similar privileges, their core package focuses on adding more miles to your account, including bonuses for utilizing partner services. Etihad Airways also offer double miles to clients celebrating their birthdays!

International Alliances: Âł7KH $UDE DLUOLQHV ELJ WKUHH KDYH LGHQWLILHG WKH FRUUHFW QLFKH ÂľFRPIRUW WUDYHOLQJÂś HFRQRP\ DQG EXVLQHVV FODVV DOLNH ´ H[SODLQV -DPL DGGLQJ Âł3HUSHWXDWHG E\ D VWURQJ GHVLUH WR GHOLYHU “best customer service´, Emirates and Etihad have become serious contenders within the region DQG DEURDG ´ :KLOH WKH ÂľELJ WKUHHÂś KDYH WUDGLWLRQDOO\ UHPDLQHG ZLWKGUDZQ IURP LQWHUQDWLRQDO DLUalliances, 2012 saw the Qatari airlines, Qatar Airways joining the likes of American Airlines, Qantas, Malaysia Airlines, Cathy Pacific, Japan Airlines and Finnair in the largely successful, oneworld alliance. /DUJHO\ GULYHQ E\ 4DWDU $LUZD\VÂś H[SDQVLRQ DPELWLRQ WKH RQHZRUOG DOOLDQFH LV D ZHOFRPH surprise for its SULYLOHJH FOXE PHPEHUV Âł:KLOH 4DWDU $LUZD\V SDUWQHUV ZLWK PXOWLSOH RWKHU FRPPHUFLDO DLUOLQHV LWV LQGXFWLRQ LQ WKH RQHZRUOG DOOLDQFH WUXO\ HQKDQFHV WKH FRPSDQ\ÂśV YDOXH proposition. Privilege club members will now be able to earn and redeem rewards from partnering airlines, have access to some of the most luxurious lounges in the world, along with PXOWLSOH RWKHU DQFLOODU\ VHUYLFHV SURYLGHG E\ WKH RQHZRUOG DOOLDQFH ´ H[FODLPV WKH 'RKD EDVHG travel agent. Etihad and Emirates both have multiple commercial partnerships with other competing airlines, including a reciprocal reward sharing program.

The Customer Privilege: :LWK PLOOLRQV RI SULYLOHJH FOXE PHPEHUV WKH ÂľELJ WKUHHÂś DUH FRQVWDQWO\ ZRUNLQJ WR HQKDQFH customer experience by adding dedicated premium lounges at various international airports.

Emirates, recently inaugurated its 35th dedicated lounge for its first/business class passengers and members of its frequent flyer program, at the Milan Malpensa Airport. This purpose built lounge features the airlines contemporary new design along with amenities that include high-end seating for business and leisure, LED screens, dedicated dining area, shower facilities, a water IHDWXUH DORQJ ZLWK YDULRXV DUWZRUNV ³7KLV QHZ (PLUDWHV /RXQJH UHDIILUPV RXU GHGLFDWLRQ WR SURYLGLQJ RXU SUHPLXP FXVWRPHUV ZLWK FRQVLVWHQWO\ KLJK VWDQGDUGV ´ VKDUHG 0RKDPPHG + 0DWWDU (PLUDWHVœ 'LYLVLRQDO 6HQLRU 9LFH 3UHVLGHQW ¹ Airport Services.

The idea of a privilege club is to reward loyalty by providing premium services to returning customers. Customers that spend thousands of dollars traveling year round are able to receive VRPH VRUW RI FRPSHQVDWLRQ IRU WKHLU WURXEOHV Âł7KH FKHFN-in and transfer procedures were really smooth, I was in line for no more than three minutes, and the Premium lounge at Doha is just

outstanding, comfortable and a wonderful array of food choices. Entertainment both at the DLUSRUW DQG LQIOLJKW ZDV JRRG DV ZHOO ,Q D QXWVKHOO D WRWDOO\ PHPRUDEOH WULS ´ UHYLHZHG RQH Qatar Airways traveler.

With the recession period coming to a close, the travel industry is expecting steady growth over the course of this decade (2010-20). As the Middle Eastern market prepares for a host of new WUDYHOHUV DQG WRXULVWV QDWLYH DLUOLQHV DUH VXUH WR EHQHILW ³7KH JURZWK LQ WKH WRXULVP LQGXstry is SURILWDEOH VLJQ IRU (PLUDWHV DQG (WLKDG ´ H[SODLQV -DPL DGGLQJ ³7KLV LV VXUH WR XS WKH DQWH IRU FRPSHWLQJ DLUOLQHV %H LW JURXQG RU LQIOLJKW VHUYLFH WKH $UDE ¾ELJ WKUHHœ DUH VHWXS IRU TXDOLW\ ´ This trend is likely to have rollover effects on the privilege and frequent flying memberships.

While still a novelty, the local market is slowly acclimatizing itself to the program. However, ZLWK WKH $UDE ÂľELJ WKUHHÂś VORZO\ FUHHSLQJ XS WKH ZRUOG UDQNLQJV SULYLOHJH IO\LQJ LV VXUHO\ WR attract more memberships from individuals seeking comfort and service quality.