GoAir, run by the Wadia Group, has come out with an innovative way to attract passengers and reduce distribution cost. The smallest of all domestic airlines by market share, GoAir has rolled out a loyalty programme making it the first low-cost carrier to launch such a scheme.
Typically, full-service carriers have frequent flier or loyalty programme in which fliers are rewarded with bonus points, which can be used for free tickets, upgrades to higher class, extra baggage allowance, lounge access and other benefits. However in some ways GoAir's scheme is different. The membership of this programme is open to only those who book tickets via the airline website.
"The idea is to encourage people to use airline site more often. This will help the carrier save on distribution costs as it would not have pay agent commission,'' an airline source said. Also the 'Go Club' loyalty programme will have electronic and paper less membership, thus cutting administrative costs. Go Club members can use reward points to get discounts on airline tickets and for purchases at pizza joints, ice cream parlours and other partner outlets.
GoAir did not respond to an email query on the issue. However, from Friday, the airline has begun inviting membership through its website.
The airline operates a fleet of 11 airbus A320s and its market share is 6.2 per cent, which is a third of IndiGo. GoAir will induct another plane later this month. In June, the airline's managing director Jeh Wadia announced order for 72 Airbus A320 Neos, which would be delivered from 2015 onwards.
All the three full-service carriers, Jet Airways, Kingfisher and Air India, run frequent flier programmes. Typically their programmes do not offer discounts on tickets, though Kingfisher passengers can use bonus miles to avail free one way ticket if the return ticket is purchased.
In full service airline's loyalty programme miles are awarded on basis of distance travelled, class of travel and the fare type.
"Depending upon the type of ticket (class of travel and fare type) a person needs to take an average 12-15 return trips on Mumbai-Delhi sector to earn sufficient miles for a free one way economy class ticket on the same route. For a shorter journey like Goa, number of miles required is less and it may be covered in seven to nine return, Mumbai-Delhi trips,'' an Air India executive said.
Full-service carriers, too, have innovated to retain and expand their client base. Kingfisher, which has 1.8 million loyalty scheme members and is looking to hive off the programme, has a family club scheme where miles earned by family members are accumulated into a single account. Similarly the airline has launched a separate loyalty programme for small and medium enterprises.
"In the past, a suggestion was made by a few corporate clients that bonus miles should be credited to a company account, instead of individual fliers accounts (since the ticket is purchased by company). However, airlines rejected the idea as it would mean stricter utilisation of bonus miles,'' an executive from a private airline said.