context: travel - loyalty programs designed to award
travelers choosing to use one particular airline on a regular basis.
First introduced in 1970 by American Airlines and soon followed by almost every large and small airline.
Around the world, the airlines have about 100 million members in their programs
with some 3.7 trillion miles collected all together. Frequent flyers programs are an excellent example of
one-to-one marketing, or Marketing 101; give something for nothing and build loyalty at
the same time.
The way the programs work is that they award the member passenger a certain amount of points - usually called
miles - for flights. The amount of points is proportional to the length
of the flight and usually also to level of service purchased. Points may then be exchanged for free flights
("award travel"), upgrades to higher class of service and other
things. Most frequent flyer programs have several award levels - e.g. Silver, Gold, Platinum, Royal, Executive etc - , which are attained after collecting
a specific amount of points. The higher award levels usually give access to
airport lounges and give priority on waiting lists etc. Points can also be earned in various ways such as
car rentals, hotel stays, using
specific calling plans or just by using a specific credit card. About 50% of the points earned
are earned on the ground, i.e. not by actually flying.
The programs are often criticized for skewing the competition between airlines, since they make people choose
business travel not by prices but based upon what program the individual is a member of.
Sweden recently judged parts of the Scandinavian Airlines Systems (SAS) bonus program illegal on domestic routes, because of this.
The programs have also become increasingly restrictive when it comes to award
travel. Most programs have blackout dates and only a few seats allotted to
awards travel on popular routes. This means that it can be hard or sometimes
impossible to use your points to get to popular destinations. In general, between 4 and 9% of the seats were
given to people in exchange for frequent flyer points.
Like any reward program (American Express, Diners etc), the value of your
points vary greatly. Using your points on upgrades rather than award travel
usually makes more sense economically, since the same 25,000 points will
exchange for a $500 domestic trip and $1000 business class seat. Some airlines
have occasionally made it possible to upgrade your seat to one in the cockpit,
and some frequent flyers of United had their names painted on the
planes.
Recently, the airlines have created large alliances in order to provide
better services, more destinations and more loyal customers. This means that you can
earn and use points/miles with several airlines more freely than with the
traditional "partner" airlines.
Some programs and alliances:
Airline - Program - Alliance
-----------------+---------------+------------
Aer Lingus TAB oneworld
Aero California Club Altus
AeroMexico Club Premier SkyTeam
Air Canada Aeroplan Star Alliance
Air France Frequence Plus SkyTeam
Air New Zealand Air Points Star Alliance
AirTran APlus Rewards
Alaska Airlines Mileage Plan
All Nippon Airways ANA Mileage Club Star Alliance
Aloha Airlines AlohaPass
America West Airlines FlightFund
American Airlines AAdvantage oneworld
Ansett Australia Global Rewards Star Alliance
Asiana Airlines Asiana Bonus Club
British Airways Executive Club oneworld
British Midland Diamond Club Star Alliance
BWIA West Indies Air BWee Miles
Cathay Pacific Asia Miles oneworld
China Airlines Dynasty Flyer
Continental Airlines OnePass
Crossair Qualiflyer
Delta Air Lines SkyMiles SkyTeam
EL AL Israel Airlines Frequent Traveler Matmid Club
Finnair Finnair Plus oneworld
Gulf Air Falcon
Hawaiian Airlines HawaiianMiles
Howard Johnson SuperMiles
Iberia Airlines Iberia Plus oneworld
Japan Airlines JAL Mileage Bank
KLM Flying Dutchman
Korean Airlines Skypass SkyTeam
LanChile LanPass oneworld
Lufthansa Miles & More Star Alliance
Malaysia Airlines Enrich
Malev Hungarian Air Duna Club
Mexicana Airlines Frecuenta Star Alliance
Midwest Express Frequent Flyer
Northwest Airlines WorldPerks
Phillipine Airlines PALsmiles
Qantas Airways Frequent Flyer oneworld
Sabena Qualiflyer
SAS EuroBonus Star Alliance
Singapore Airlines KrisFlyer Star Alliance
South African Airways Voyager
Southwest Airlines Rapid Rewards
Swissair Qualiflyer
Tarom Romanian Air Smart Miles
Thai Airways Int'l Royal Orchid Plus Star Alliance
Trans World Airlines Aviators
United Airlines Mileage Plus Star Alliance
US Airways Dividend Miles oneworld
Varig Smiles Star Alliance
Virgin Atlantic Air Flying club
Reference: USA Today, Webflyer.com