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Spinoff of loyalty program under consideration

Spinoff of loyalty program under consideration

 
Old May 3, 10, 7:45 am
  #1  
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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...
cerealmarketer is offline  
Old May 3, 10, 7:50 am
  #2  
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Do you think Chase would balk, or prefer, having the loyalty plan spun off?
J.Edward is offline  
Old May 3, 10, 7:54 am
  #3  
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Well Tilton said UA has already separated MileagePlus internally...
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Old May 3, 10, 7:59 am
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Originally Posted by cerealmarketer View Post
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Well Tilton said UA has already separated MileagePlus internally...
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?
mosu84 is offline  
Old May 3, 10, 8:08 am
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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.
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Old May 3, 10, 8:22 am
  #6  
 
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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...
perezoso is offline  
Old May 3, 10, 8:27 am
  #7  
 
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Originally Posted by cerealmarketer View Post
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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.
Boy that sounds like a very serious misunderstanding of what a loyalty program means to a business. Loyalty programs are meant to maximize revenue and profit generation. Frequent flyers are the people that generate the maximum revenue - and I would expect better profit margins to the airline.

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"!
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Old May 3, 10, 8:36 am
  #8  
 
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I guess I am really ignorant on this, but have other airlines done this? How would that operate?
rlbmorton is offline  
Old May 3, 10, 8:56 am
  #9  
 
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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.
GregWTravels is offline  
Old May 3, 10, 10:01 pm
  #10  
 
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Originally Posted by hhmorgan View Post

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"!
The eggs were gold not the goose
IainC is offline  

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