Playing the Loyalty Points Game

Frequent flyer programs have long been the bane of travel managers’ lives. The ability to put points into an ever-expanding loyalty wallet is often irresistible for travelers who book outside policy for personal gain. Not only does this undermine corporate deals, reducing the amount of business given by their employer to a particular airline, it also lays waste to any duty-of-care. Passionate point-collectors are also financially frustrating to organizations whose policy is the lowest logical fare.

However, travel managers can make corporate and leisure loyalty programs work for them, and with careful planning enhance duty-of-care, traveler wellbeing and staff retention – and even save a bit of cash along the way.

One software company allows employees to use loyalty points, provided they do not influence travelers’ decisions. It used to be a member of British Airways On Business but switched to negotiated rates due to levels of spend. “Centralized corporate loyalty schemes can be useful, but managing such accounts can be time-consuming, often to the point where the time and cost involved outweigh the benefits,” says Jef Robinson, category manager, meetings and events, global shared services, for Citrix.

From the outside, it may appear that airlines change the rules with such regularity, they undermine the value of the schemes. “The goalposts do indeed move,” admits Robinson, “but most programs tend to be well managed by the service providers. There can be some advantages on a corporate level as well as a personal traveler level. In fact, the use of loyalty programs can actually support policy compliance.”

Rewarding travelers
So which airlines are pulling out the stops for their members? Programs that reward businesses and travelers alike are largely aimed at SMEs or larger organizations with a smaller travel spend. Emirates’ business customers can sign up for Emirates Business Rewards and individuals benefit from Emirates Skywards points; similarly, Virgin Atlantic’s Flying Co (corporate)/Flying Club (individual), Etihad Business Connect/Etihad Guest, Singapore Airlines HighFlyer/KrisFlyer and Qantas Business Rewards/Frequent Flyer.

Company members of Air France KLM’s BlueBiz earn Blue Credits every time their travellers use Air France or KLM these can be converted into flights, upgrades, seat selection, extra baggage and time to think, which allows bookers to guarantee their reservation and rate for three days. Since November, these benefits also apply to BlueBiz members booking on Delta Air Lines flights. Individuals can sign up to Flying Blue to earn personal miles simultaneously. In addition, Corporate Priority from Delta Edge offers those flying on Delta Air Lines benefits that include preferred seats, check-in recognition, clear preferred pricing, denied boarding prioritisation and priority boarding.

SAS for Business was launched this year to replace SAS Credits. The new program applies (corporate) discounts at the time of booking, which are calculated according to spend and class travelled, and are also applicable to Singapore Airlines and Wideroe services.

Lufthansa Partner Plus Benefit is valid with ten other Star Alliance members. Points cannot be used to buy tickets at negotiated rates but can be exchanged for Benefit Free Flight with partner airlines in all four classes, booked via the service centre. Members of the Partner Plus program can also earn and redeem points on United and select other Star Alliance carriers.

BA’s On Business recognises employer and employee with On Business points and Avios respectively. A company earns points or receives discounts as applicable to their booking and reward flights can be redeemed across American, BA and Iberia networks.

Some companies generate massive savings from the program. However, Hero Trew, global travel manager for Endeavour WME IMG, says: “We were, until recently, a member of BA’s On Business, but BA took us off as we were not considered to be an SME – and we were probably too good at redeeming our points!

Meanwhile, a financial services client of Corporate Traveller accrued sufficient points with Swiss to save £3,000 on its hotel spend in the past 12 months by redeeming points against hotel vouchers on the Star Alliance Partner Plus Benefit program.

New trends
The most recent change in the common loyalty programs is the move away from awarding points for miles flown and towards a revenue basis. American carriers led the way in 2015 and Oman Air, Air France KLM and Lufthansa have followed suit.

Although longer journeys are more expensive, revenue and mileage-based rewards do not work out the same; tickets from London to Rio and Tokyo (both around 5,000 miles), for example, would cost different amounts and, because points are calculated on fares less taxes, businesses spend more than travelers are rewarded for.

Unusually, however, both airlines and buyers see the change as positive. It removes the inequity created by rewards based on miles flown and booking class, and it rewards organizations that spend a lot on air fares.

Airlines have also ensured travelers can earn without leaving the ground and credit card partners are particularly popular. “The primary intent of a co-branded card is to provide the opportunity to earn on everyday spending, such as grocery shopping, daily coffee, and it gives the individual a way to earn significantly more of that currency,” says Seward, although he admits: “The decision whether to use a loyalty card or corporate card is always there.”

Airline alliances
Meanwhile, with more airline partnerships being formed, and alliances in general gaining more clout, it is surprising that there is currently no single loyalty program that operates across one alliance. However, participant airlines recognise the members of each other’s programs and travelers can generally choose which currency they earn in.

And with airline distribution becoming more complex for travel buyers, even taking NDC out of the equation, thankfully airlines remain booking-channel agnostic when it comes to allowing travelers to accrue their points for miles – for now.

This is a big difference compared to hotel loyalty schemes, which notoriously tempt their program members to book direct for in return for extra rewards. In fact, airlines are surprisingly shy of admitting to courting members, although they do say they poll them to ensure the programs continue to match members’ requirements and expectations.

Loyalty schemes continue to evolve and compete in their quest to attract travelers. Being pragmatic, finding the right corporate program for employees and encouraging its use is the most positive way towards achieving compliance and keeping travellers happy in the process.

Collinson’s tips: Making the most of loyalty points
Corporate travel managers can be pro-active in managing their loyalty programs, as well as the ones used by their travelers.

  • Think strategically: Join the corporate program that gives you the greatest coverage across the airlines and routes your employees utilize most often, ensuring the greatest opportunity for earning and redemption. Focus on one primary carrier within an alliance, offering co-branded credit cards, and with the lowest threshold for earning elite status.
  • If you have a travel budget under $1 million, consider enrolling in multiple programs at the corporate level to ensure reward points are accumulated on most flights.
  • Start socialising: Follow the airline’s social media accounts to find out about promotions and offers; this can also be a responsive channel for traveler issues.
  • Mix and match: Ensure your employees are enrolled in the airline’s consumer frequent flyer program, so they can earn miles and take advantage of other benefits.

Note: This article originally appeared at Buying Business Travel a UK site for corporate travel managers. Some of the loyalty programs mentioned may not be available to US-based travelers.

Teplis Travel manages multiple corporate loyalty programs for its clients. For more information contact sales@teplis.com

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