Loyalty schemes disappoint: study

Etihad has opened a new sales office in Sharjah, bringing it closer to passengers

AS Etihad Airways prepared to launch its new guest loyalty and recognition programme, the airline revealed results of a recent survey that found passengers are increasingly disillusioned by the hidden catches associated with redeeming hard-earned miles.

One third of those polled by Etihad (31 per cent) believed that the standards of rewards offered to customers had decreased in terms of actual benefits to the individual over the 25 years that loyalty schemes have been in operation.
As much as 79 per cent of respondents felt that these days such schemes were simply regarded by airlines as clever marketing ploys rather than a genuine service to customers, while 77 per cent lamented that the only people to benefit from the rewards cited were business travellers, said the study.
The survey, commissioned in the run up to the August 30 global launch of the carrier’s new loyalty and recognition programme, showed that while 67 per cent of regular travellers belonged to an airline loyalty programme, only 37 per cent ever used their accrued points and just one in five (21 per cent) had redeemed air miles in the last year.
While these results back up claims that the total stock of unredeemed frequent flyer miles totalled approximately 14 trillion miles by the end of 2004 and was worth over $700 billion – more than all the dollar bills in circulation around the globe (The Economist, January 8, 2005) – it also highlighted the main bones of contention amongst business and leisure travellers alike, said Etihad.
Another common issue highlighted by participants was the overall lack of choice for lower tier members. Unsurprisingly, three quarters (75 per cent) of those surveyed complained that there was an extremely limited range and choice of rewards options, particularly for those who travel less frequently and tend not accumulate sufficient mileage to enjoy the full selection of membership benefits.
Peter Baumgartner, head of marketing for Etihad Airways, said: “Our research shows that the travelling public has become increasingly dissatisfied and disillusioned with frequent flyer programmes. Taking this feedback on board, our aim remains to introduce hospitality-orientated initiatives that rebalance the notion of encouraging loyalty amongst travellers – in the customer’s favour. Perhaps the key area where we identified great room for improvement was that of flexibility of choice, with an overwhelming majority of the public saying that they would welcome a scheme that puts them in the driving seat. This theme will therefore run throughout all aspects of our forthcoming new programme.”
Once launched, membership to Etihad’s programme is free and mile accrual is immediate, with individuals from every country aged two years old and upwards eligible to join.
ETIHAD Airways has announced the introduction of e-ticketing, following a successful fast-track project undertaken over the last four months. “E-ticketing will enable Etihad to enhance the relationship with our guests by simplifying the way they organise and book their travel,” said Baumgartner.
The introduction of the new system has also ensured that Etihad will comfortably meet the IATA’s deadline for all airlines to use e-ticketing only, which is scheduled for the end of 2007.