Air miles: Decoding the world's largest currency

Airlines are nowadays aggressively pitching their frequent flyer programs (FFPs or air miles) to earn passenger loyalty. The funda is simple—while passengers fly more than usual to earn a free journey, the airline gets to boost its revenue kitty and brand image.
Yet, with personal lives becoming busier than ever before, it’s practically impossible for travellers to keep track of air miles. A person in the corporate world works for at least eight hours a day, travels two times a month, manages family’s money matters—so, how can one expect them to be aware of what airline loyalty programs have on offer and how can they maximise the travel experience at minimal expense.
Today there are over 70 airline FFPs worldwide, and a complicated network of airline alliances and partnerships. In India, Kingfisher Airlines, Indian Airlines and Jet Airways have popular FFPs. But there is little awareness on effective utilisation of airline loyalty programs. Rough estimates show that more than half the air miles generated are lost due to inadequate information, unfriendly redemption processes and travellers’ preference to take the best flight, time-wise as well as price wise.
Globally, airline FFPs are profit centres, that is, their revenues earned from sale of miles to partners outstrips the costs incurred in running the FFP and providing for redemption. Due to lower levels of awareness about loyalty programs in India, however, most FFPs here are cost centres.
However, for the best possible utilisation, it’s advisable for air travellers to consolidate the miles into a single account to avoid miles breakage and maximise chances of getting an award ticket.
31/01/10 Aman Dhall/Economic Times

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Categories: Indian Aviation- In General Jan 2010