Spinoff of loyalty program under consideration
May 3, 2010, 7:45 am
#1
Original Poster
Join Date: Feb 2002
Location: NYC: UA 1K, DL Platinum, AAirpass, Avis PC
Posts: 4,599
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Hello Aeroplan....
On the conf call discussing the merger the question of a frequent flyer program spinoff was asked:
The answer from both sides was that the skills to run a loyalty program that maximizes revenue opportunities are very different than those of running an airline. Read: spinoff is a serious option.
At least Aeroplan doesn't engage in blocking...
Hello Aeroplan....
On the conf call discussing the merger the question of a frequent flyer program spinoff was asked:
The answer from both sides was that the skills to run a loyalty program that maximizes revenue opportunities are very different than those of running an airline. Read: spinoff is a serious option.
At least Aeroplan doesn't engage in blocking...
May 3, 2010, 7:50 am
#2
Join Date: Oct 2004
Location: Clinging to the edifices of a decadent past from the biggest city in America nobody really cares about.
Programs: (ಠ_ಠ)
Posts: 9,077
Do you think Chase would balk, or prefer, having the loyalty plan spun off?
May 3, 2010, 7:54 am
#3
Original Poster
Join Date: Feb 2002
Location: NYC: UA 1K, DL Platinum, AAirpass, Avis PC
Posts: 4,599
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Well Tilton said UA has already separated MileagePlus internally...
Well Tilton said UA has already separated MileagePlus internally...
May 3, 2010, 7:59 am
#4
Join Date: Jan 2009
Location: NYC
Posts: 187
Sorry for what might be a stupid question, but I'm not familiar with Aeroplan. How would "spinning off" the loyalty program change the way it operates?
May 3, 2010, 8:08 am
#5
Join Date: Jan 2008
Location: Rio de Janeiro, Miami, Nice
Programs: Marriott Titanium, AA Concierge Key, Delta, United, Emorates, and others
Posts: 4,694
It is years ago that AA spun off Sabre and the other res systems also have generated cash for their airline owners. Selling off or spinning off loyalty programs has done the same. Why should OP/MP be any different? Once they merge the programs and consolidate with new scalable IT they'll be all set for a spin-off and might just do it first. After all they do need to optimize use of capital. They also have gigantic fleet renovation plans in place that need to be reconciled and they'll eat up all the funds anybody could find.
May 3, 2010, 8:22 am
#6
Join Date: Jan 2006
Location: KAUS
Programs: UA MM
Posts: 1,118
Yuck. Do not like that idea. It would inevitably lead to a significant disassociation of the program from the airline and flying.
Surely it would only be a matter of months before a spun-off OnePass started flooding your inbox with trash beseeching you to buy cottage cheese-flavored Wheaties, the latest in bicycling fetish fashion, and Skymall kind of laughably faux "high class" Chinese plastic crap.
Please don't spin off the FF program...
Surely it would only be a matter of months before a spun-off OnePass started flooding your inbox with trash beseeching you to buy cottage cheese-flavored Wheaties, the latest in bicycling fetish fashion, and Skymall kind of laughably faux "high class" Chinese plastic crap.
Please don't spin off the FF program...
May 3, 2010, 8:27 am
#7
Join Date: Feb 2008
Location: MHT/BOS
Programs: Airline FF: UA 1K, DL, US, AA, NW,
Posts: 219
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The answer from both sides was that the skills to run a loyalty program that maximizes revenue opportunities are very different than those of running an airline. Read: spinoff is a serious option.
The answer from both sides was that the skills to run a loyalty program that maximizes revenue opportunities are very different than those of running an airline. Read: spinoff is a serious option.
Treating a loyalty program as a loss center in isloation is a big mistake. Just ask the casino's - the VIP/High rollers generate the biggest return on the business.
Not sure if we understand the full context of the question and answer given above - but I sure hope these guys aren't so short-sighted as to kill the "golden goose"!
May 3, 2010, 8:36 am
#8
Join Date: Apr 2007
Location: nyc
Programs: CO Plat & MP 1K
Posts: 870
I guess I am really ignorant on this, but have other airlines done this? How would that operate?
May 3, 2010, 8:56 am
#9
Join Date: May 2005
Location: London, England, United Kingdom
Programs: Marriott (Lifetime Titantium), whatever other programs as benefits make sense.
Posts: 1,921
Aeroplan was spun out back in 2005, and Air Canada's parent company has been selling off its stake since then, to the point now where they don't own any of it.
Aeroplan is now more of a loyalty marketing program in general then just a FF program. There are a lot more ways to earn Aeroplan miles now via shopping unrelated to flying or allied credit card - for example at Esso gas stations or via a CIBC mortgage.
Status is only earned via miles earned flying.
Aeroplan has a 7 year expiry on Aeroplan miles now - probably so that the loyalty program is not carrying increasing liability. There are obviously a lot more options to earn, so a lot more people trying to redeem.
Aeroplan is now more of a loyalty marketing program in general then just a FF program. There are a lot more ways to earn Aeroplan miles now via shopping unrelated to flying or allied credit card - for example at Esso gas stations or via a CIBC mortgage.
Status is only earned via miles earned flying.
Aeroplan has a 7 year expiry on Aeroplan miles now - probably so that the loyalty program is not carrying increasing liability. There are obviously a lot more options to earn, so a lot more people trying to redeem.
May 3, 2010, 10:01 pm
#10
Join Date: Apr 2008
Location: SYD; Central Coast, NSW
Programs: UA, 1K 2MM
Posts: 947
