Aeroplan is selling miles to non flying partners at an accelerating rate;

AC frequent flyers have to compete with non flyers to redeem miles for reward tickets.

Onex will probably grow the business of Aeroplan with more miles sold to various other partners.

There is no differentiation between miles earned flying and miles earned by other means.

The Federal governement proposes legislation with the potential to force AC to sell miles to other carriers.

Given all of the above facts, is it time for AC to create a distinct program that recognizes miles accumulated by flying AC and the * A partners?

....and what could such a program look like?

A shrewd ONEX would have included a no-compete clause in any Aeroplan transaction?

Besides, AC still owns are huge piece of Aeroplan. How well would such a duplication of capital investment go over with investors and analysts?

1D

Doesn't CX have something like this dual program thing with AsiaMiles and Marco Polo Club?

[This message has been edited by YOWkid (edited 03-03-2003).]

Do I detect some small degree of facetiousness to this thread?

[This message has been edited by airbus320 (edited 03-03-2003).]

I don't think it is facetious at all. It if no longer an airline loyalty program, but a cheap travel rpogram to the masses. I have worse luck getting rewards than my mom, who has never collected a point by flying.

I think that the program could remain as a single program, as long as it had benefits like instant KK for status members. Unfortunately, double miles for Elites is a steep price to pay, and it's not even available for Executive Class.

In the pre-instant-KK days, I actually had reasonably good luck as an Elite member requesting space from yield management; it's almost as if instant KK has made it worse, since now the rules are the rules. For example, in the past, a request to yield management might lead to opening up a W or D seat (at the regular mileage levels), whereas now, you have to pay double miles.

Actually, I think A320 is really onto something here. Why NOT decouple the frequent flyer portion of the program from the rewards part of it?

Most frequent flyers fall into one of two camps - those that earn status for the flying perks and those that earn them for the point redemption perks.

If you consider the flying perks as a standalone program (e.g. the upgrades, the lounge access, the priority lines, the friendly counter staff... ok, maybe not that last one! ), it makes sense that you could retain the loyalty of your high revenue frequent flyers by offering them MORE incentive to stick with your carrier. Heck, change the program to offer intermittent, yet increasing positive reinforcement - unlike the program today, where you have essentially only three targets to hit (P,E, and SE), and once you've hit SE, who needs to fly more to get more flying benefits?

Y'see, right now, the frequent flying is all about the points. And to me, when the program is undergoing such a radical transformation in terms of unit value, why should I give my loyalty away? It devalues the one leverage that I have - my cash and my choice.

How different might this "real" FF program look? Let's see, for starters, the basic unit of currency could be either revenue flown, or flown miles - your choice.

Benefits could look something like:

Lounge Access
-Earned access at 35k flown miles (the "entry fee")
-1 free entry credit (any person) for every 1 segment flown (that way you could always earn your own access and a few extra).
-bonus credits issued at milestones (eg. 5k miles? $5k revenue?) = 5 bonus credits?

Upgrades
-get rid of coupons and certs - issue u/g credits.
-issue u/g credits at 1:1 mile flown
-then manage credit earning through revenue yield - the more you have paid over time, the higher your credit earning rate... think of a points accelerator program.
-ok, what do you do with the bazillion credits you have? Reverse the process, only discount them now at a system-wide rate greater than what individuals are able to revenue-earn them at. Why? b/c you don't want to devalue your credits, of course!
-credits could then be used to apply to an upgrade... different amounts for different advance reservations, different routes, etc. The possibilities are endless.

In-flight drink coupons
-much smaller impact, but issue these as straight credits for revenue or miles flown.

What else would I want? What else is a royal pain-in-the-arse today for you, the fequent traveller?

One of the biggest benefits to me is the mere ability to temporarily confer benefit to someone i'm travelling with. Yes, that's right - the biggest howls last year from folks were over loss of instant KK for family and friends and loss of guest privileges to the MLL... both of which have marginal imapct on me!

So by allowing me to earn status credits incrementally, I also earn the right to choose who I confer these benefits on too! What more could you ask for in a LOYALTY PROGRAM? Where your top customers are your most ardent evangelists????

You could easily set this up to cost no more than what the flyer portion of the program costs today. Heck, with these types of metrics in place, you would probably be able to manage yield a heckuva lot better than now!

And finally, what would be the ideal way to log and track credits? Your darned stinkin' loyalty card of course? That's what the stripe on the back is for... or better yet, embed a chip on it. Reach out and pioneer the Don Tapscott "leading thinker" space that he always preaches from the pages of EnRoute Magazine. Sure it might cost more money to implement, but think of the marketing power that having THE most recognized frequent flyer card in world would have for your airline. After all, only your best customers (by default, either those who pay the most or fly the most!) would carry them!

The possibilities of a true FLYING LOYALTY PROGRAM are endless! And most importantly, you can finally decouple the largest uncontrollable liability on your books from your air ops - those gazillion potentially redeemable points that you really have no clue how to manage in the long run!

Fermat: now you are talking leading edge thinking that Rupert said existed on the AC forum. You are flushing out the concept.
Let's see where it goes...