Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday

A ticket to ride

A ticket to ride
Comment E-mail Print Share
First Published: Mon, Jul 23 2007. 12 19 AM IST
Updated: Mon, Jul 23 2007. 12 19 AM IST
Even though the frequent flyer programmes of various airlines seem ubiquitous right now, with invitations to join flooding your mailbox along with a brand-new credit card every day, they have not actually been around for that long globally.
The first airline to offer something akin to what we now recognize as a frequent flyer plan was Western Airlines in California in 1980, which basically gave passengers a card that they got punched every time they flew. And 10 flights later, they got half-off on a one-way ticket.
The airline never made it—it got absorbed by Delta Airlines Inc. not much later, but it had given birth to an idea that is often hailed as the most successful marketing programme ever created.
American Airlines borrowed the idea, and launched its AAdvantage in 1981, with most American carriers following suit.
But it took a while for the programmes to proliferate. European and Asian carriers were slow to catch on—they saw no reason to give away seats for free to passengers who would otherwise have paid—with Lufthansa being the first to join in 1991. By then, the benefits of having loyal customers who are hungry to earn more miles made sense. As the passengers hoarded their miles, they were willing to pay somewhat higher prices to fly their favoured airline, telling themselves that the miles they earned would outweigh the extra they were paying.
The way frequent flyer programmes around the world work is basically similar. It is incredibly rare for flights on a specific route to fly completely full all the time, and instead of letting empty seats go waste, the airline can encourage loyalty in a highly competitive marketplace by letting regular (i.e., frequent) customers hitch a free ride. And historically, most passengers do such a terrible job of keeping track of their miles that they either let them lapse (by not flying often enough), or forget about them, leaving more than half the miles that airlines award unclaimed. So, the airlines hand out more miles than they ever have to cash in, while still getting customer loyalty.
In India, commercial air travel took a while to develop, and frequent flyer programmes didn’t arrive until the late 1990s with Jet Airways’ Jet Privilege and Air India/Indian Airlines’ Flying Returns.
Since then, both programmes have been pretty successful, with Jet Airways claiming more than 100,000 members on its rolls, without including the 30,000 members of Air Sahara’s Cosmos programme, who will eventually be inducted into Jet Privilege. Air India does not disclose how many members it has in Flying Returns, but industry estimates say that it is close to 80,000. That is a relatively small fraction of the 33 million passengers who flew in 2006, but almost 40% of those flew in low-cost airlines, which usually do not bother with frequent flyer programmes.
But most of these programmes are stingier than those in Europe or the US, even though they are catching up.
Even though distances in India tend to be shorter, and plane ticket prices relatively lower than in the US, passengers must still part with 25,000 miles to get a free ticket, the same as they would on an American carrier. Also, many airlines internationally offer you a fixed number of points for each flight taken, compared to measuring the miles travelled, Indian airlines count miles. This, in a country where most flights are under an hour-and-half, does not add up to much. Nevertheless, competition is making things better.
Jet Airways recently racked up several Freddie Awards, handed out by an international travel marketing group, for innovations and introducing its programme to India, and as it competes with Kingfisher Airlines’ programme, has made more and more of its seats available for awards travel.
For passengers though, choosing a frequent flyer programme is incredibly complex, and more than half of the world’s frequent travellers hold memberships in more than one programme. After all, not all airlines fly everywhere, and airlines have a habit of going bust, leaving your frequent flyer miles worthless.
One of the best ways to pick is simple—ask about blackout dates, and check how quickly you get past the entry-level status. Many airlines won’t hand you a frequent flyer ticket for really busy travel dates, such as around New Year or the summer vacations. In India, airlines are not technically allowed to have blackout dates, but they are not required to let you fly on any date that you choose.
Instead, they free up a percentage of their seats—usually less than 5-8% for award travel and hand them out on a first-come-first-served basis.
Status—as in Elite, Elite Gold, or whichever marketing term the airline has come up with—comes with certain benefits, many of them, such as higher baggage allowances, lounge access, etc., are obvious. But there are other, less obvious benefits.
The higher your status, which is decided by how many flights you usually take, the more likely it is that the airline will insert a code next to your name that reads CIP—commercially important passenger. That means you are more likely to get an upgrade if the flight is pretty full, and on crazy travel days—such as when the rains cancelled all flights to Mumbai two weeks ago—push you to the head of the line when new bookings are done.
Write to us at businessoflife@livemint.com
Comment E-mail Print Share
First Published: Mon, Jul 23 2007. 12 19 AM IST