SpiceJet to launch corporate frequent flyer programme2 min read . Updated: 31 Dec 2013, 12:31 AM IST
Frequent flyer programmes are generally offered by full-service airlines and not low-fare operators, but the line between them is blurring fast
Mumbai: SpiceJet Ltd, India’s second-largest low-fare airline, has introduced a corporate frequent flyer programme to woo business travellers.
SpiceJet is offering one free one-way ticket for every six completed one-way journeys and two free one-way tickets for every 10 completed one-way tickets for registered flyers of its Corporate Benefit Program, according to the SpiceJet website.
The offer is valid only on domestic flights and the airline will bear only the base fare and fuel surcharge on the free tickets. Frequent flyer programmes are generally offered by full-service airlines such as Jet Airways (India) Ltd and Air India Ltd.
India’s low-fare airlines and full-service airlines are moving into each other’s territory as competition intensifies amid an economic slowdown.
Low-fare airlines such as GoAir, run by Wadia Group’s Go Airlines (India) Pvt. Ltd and IndiGo, operated by InterGlobe General Aviation Pvt. Ltd, have begun offering a slew of free services and discounts similar to full-service airlines. They are also offering customers car rentals, holiday packages and special services apart from discounts.
On the other hand, full-service airlines are moving two-thirds of their passenger capacities to no-frill and all-economy services—the domain of low-fare airlines.
GoAir also launched a programme called Go Club in which reward points can be redeemed to gain access to GoAir lounges and holiday destinations in India. Registered members can get upgrades to business class with extra leg space, free in-flight meals and extra baggage allowance.
GoAir had started a business class in 2008.
Frequent flyer programmes can be lucrative for airlines. For instance, Etihad Airways PJSC has agreed to invest $150 million for a 50% stake in Jet Airways’s frequent-flyer programme -- JetPrivilege. A year ago, Etihad Airways had acquired control of Air Berlin Plc’s frequent flyer programme for $240 million. Jet Airways has also sold a 24% stake to Etihad Airways.
In mid-December, SpiceJet signed a three-year inter-line agreement with Singapore-based low-fare airline Tiger Airways Singapore Pte Ltd, which runs Tigerair, connecting 14 Indian cities to Singapore via Hyderabad.
An inter-line agreement, a practice adopted by full-service airlines, refers to a pact to issue and accept tickets for flights that are operated by the partner airlines. When selling an inter-line ticket, the operating airline’s own flight numbers are used.
The shift in the strategies of Indian low-fare airlines comes at a time when new airlines preparing to start operations. Tata Sons Ltd has started two joint ventures, one with Singapore Airlines Ltd for a full-service airline and another with Malaysia’s AirAsia Bhd for a low-fare carrier, after the government eased foreign direct investment (FDI) rules for the aviation sector in September 2012. Both ventures are awaiting final regulatory clearances.