7-Step Guide to Get Your Airline Loyalty Program Flying High

As of 2023, the combined value of the US’ three largest frequent flyer programs – Delta’s SkyMiles, American’s AAdvantage, and United’s Mileage Plus – was estimated at almost 75 billion dollars. In the turmoil caused by the pandemic, loyalty programs have emerged as a major source of income for airlines. But now, the industry needs to figure out how to keep passengers hooked on those precious miles in the aftermath of the COVID-19 crisis. Here are 7 tips that can help.

Why Customer Loyalty Matters for Airlines

Time and again, customer loyalty has been proven to benefit brands in virtually every industry. Loyal customers bring more money, are less expensive than new ones, and can vouch for your company’s services so that more people use them. For airlines, their significance can be especially strong due to the highly competitive nature of the industry. 

Most (particularly budget) airlines face insane competition globally, often battling on fares and services. In such an environment, frequent flyer programs can offer a competitive advantage and significantly contribute to an airline’s success. But only if they adapt to social, environmental, and technological changes.

Unpredictable crises like the COVID-19 pandemic or natural disasters like storms and volcano eruptions should and do cause airlines to find new, more flexible solutions for canceled flights, rebooking, compensations, or customer support. The industry is also undergoing transformations related to the new technologies. 

With more and more channels enabling online booking or check-in (in 2018, 82% of booked flights occurred without any human interaction via a mobile app or website), airlines are losing direct contact with customers and need to find a way to connect with their customers anew.

The challenge is real, but there are strategies to help you combat it.

How to Improve Airline Loyalty Programs

Embrace a flexible booking policy

Modern customers are all about flexibility. More than anything, they want options. They want to go everywhere, see anything, reschedule ten times in the process, and not worry about a loss of time and money. 

A lot would argue that in the 21st century, they shouldn’t. That’s why more and more airlines are embracing flexible booking policies that make rescheduling cheaper or entirely free for their customers. 

The trend was adopted by some of the biggest brands in the industry, e.g., Alaska Airlines, whose Peace of Mind Waiver (introduced in 2020) allowed customers flying the main and first-class to change or cancel their booking for free. In 2021, the service was extended to all fairs. 

Collaborations with travel insurance providers

The COVID-19 pandemic was a total game-changer in the way we perceive travel. Between increased health measures, border restrictions, and revised safety protocols, airline passengers faced a lot of uncertainty, fear, and, yes, annoyance. 

That’s why, in the pandemic aftermath, airlines should focus on providing their customers with more peace and stability. One way to do that is to partner up with travel insurance providers. By offering the added value of security to passengers, such collaborations can greatly enhance a frequent flyer program and boost an airline’s image. 

From comprehensive coverage for trip cancellations to baggage protection, this service can greatly enhance customer satisfaction and encourage repeat bookings.

Provide elite status extensions

Oh, the coveted elite status in an airline loyalty program. To achieve it is to unlock the door to a whole world of benefits and privileges that make travel that much better. 

The only downside? Getting to the highest tiers is not an easy task – especially since the pandemic-induced travel crisis made elite status more difficult to obtain (and only 15% of airline rewards program members have them in the first place). 

Airlines could, therefore, opt for elite status extensions to reward the most frequent flyers and foster their brand image, and prove their commitment by doing so. Most passengers will be delighted to use that option when faced with major events disrupting travel. 

Give priority to airline rewards program members

Why do people enroll in an airline rewards program? 

Besides collecting frequent flyer miles, they want a little special treatment. They want to feel like they’re a part of the club, like they’re maybe a tiny bit more important to the airline they choose than the rest of its passengers. 

That’s why a sprinkle of priority or access to exclusive services here and there can do wonders at solidifying this impression. Whether it’s priority rebooking, expedited security checks, dedicated customer service lines, or lounge availability, such perks can go a long way to show that your airline simply cares about its most loyal customers.

Gamify your frequent flyer program

Sure, passengers join your airline loyalty program for the flight miles – everyone knows that. But the promise of free travel may not be enough to keep them engaged. 

There are so many ways to save up on flying that you have to think outside of the box to retain interest in your rewards scheme. The best frequent flyer program is one that makes earning loyalty points actually… You know, fun! JetBlue has its TrueBlue Badges, Emirates has its Skywards’ Future Artists initiative that invites aspiring artists to submit their artwork, and Qantas has its Frequent Flyer Quiz. 

What can you offer to compete? With the right loyalty software, the possibilities for gamifying your program are endless.

Use the power of AI for personalization

In 2022, the use of AI in the aviation market size was valued at almost 730 million dollars. Dedicating some chunk of it to understanding your passengers better may be a great idea for a boost in customer loyalty. AI-driven analytics is an excellent tool for processing data such as past bookings, preferences, and travel behavior, which can be used to offer more personalized offers and rewards to your travelers. From seat upgrades to exclusive discounts that pop up at the precise time your passengers may need them – the higher the level of personalization, the better customer experience, which directly correlates with loyalty. 

Be socially conscious

Customer loyalty in airlines (though not just in airlines) goes far beyond collecting loyalty points and exchanging them for free flights. To create a real bond with your passengers, your brand needs to keep abreast of the times – and in 2024, that means going green. 

Modern customers are increasingly more vocal about their demands for sustainability – in fact,  the 2020 Passenger IT Insights (by SITA) survey revealed that as much as 80% of passengers said they were concerned about climate change and prefer brands that offer more ecological solutions. And that’s where frequent flyer programs come in handy. By incorporating elements of sustainability into your loyalty offering, you can give customers what they want and enhance your brand image. 

Airlines all over the world have already jumped on board, with Lufthansa introducing a new “loyalty program that rewards frequent flyers for financially supporting the use of sustainable aviation fuels or carbon offsets” and Etihad Airways launching the Conscious Choices initiative.

The Future of Loyalty in the Airline Industry

Frequent flyer programs are likely to transform according to technological advancements and evolving consumer expectations. Like most industries, airlines will rely on AI more and more, using the power of new technologies to offer more tailored experiences to individual travelers. But the future isn’t all peachy, as there are still many issues that put airline loyalty at risk. Some of them may include:

• Biometric technology
• Big data analytics
• Changing customer expectations
• Hyper-personalization challenges
• Cybersecurity breaches
• Consumer fatigue
• Economic downturns
• Environmental issues

While we can’t be certain which direction customer loyalty in airlines will take, it’s safe to say that the right technology is crucial for addressing the most pressing challenges that airline rewards programs face. 

From more creative gamification to the elements of sustainability – it takes real robust software and a global provider with a vision to turn the best ideas into a stream of revenue. 

Comarch Loyalty Management for Travel can make that happen. Check out our offering HERE and get your frequent flyer program off the ground!

And for more info on the future of the airline industry, download our report.