Air India targets 5x members for frequent-flyer plan in four years

Air India (A-I) aims to expand its ‘Flying Returns’ frequent-flyer programme from the current four million to 20 million members within the next four years, a senior airline executive told Business Standard. 

The programme currently has a partnership with over 35 companies, including 25 airlines, which are part of the Star Alliance group. Air India plans to expand its number of partners to over 50 by the end of March, the executive added.

The airline, having recently secured the world’s second-largest aircraft order with 470 planes, is in the process of overhauling the programme comprehensively.

This initiative involves a revamp of existing airport lounges and enabling passengers to redeem points for online ticket bookings across its 25 partner airlines. It also includes allowing passengers to book tickets using a combination of cash and points (dynamic award chart), and growing the number of active members. A member, who has used the programme in the last one year is an ‘active’ member. 

In August, Air India Chief Executive Officer (CEO) and Managing Director (MD) Campbell Wilson announced that a thoroughly revamped loyalty programme is set to launch early next year.

According to sources in the aviation industry, there are indications that the airline may consider changing the name of the loyalty programme during re-launch.

“When the Tata Group assumed control of Air India, Flying Returns had approximately three million members, with a significant portion being dormant. The active customer base was comparatively small, amounting to less than a third of what other airlines had in terms of active customers. Many customers were not perceiving significant value in the programme,” said the airline executive.

Air India did not respond to queries sent by Business Standard on this matter.

Currently, the total number of members stands just over four million. The executive said, “In the past year alone, we have welcomed over a million new members, and we are witnessing significant momentum. Our active member base, or engagement rate, has more than doubled compared to previous levels. In the next three-four years, we want to get to over 20 million members. Given the vast size and scale of India, we consider this to be just the beginning.”

The Tata Group assumed control of Air India in January last year, and the airline is currently operating approximately 3,000 flights per week. Air India is undergoing a merger with Vistara, which operates its independent frequent-flyer programme, Club Vistara. The goal of reaching 20 million members is anticipated to be accomplished by Flying Returns independently, regardless of the timeline for the completion of merger between the two airlines.

Currently, a Flying Returns member can use loyalty points to book online tickets exclusively for Air India flights. To book a ticket on any of the 25 partner airlines using loyalty points, members have to contact customer care. 

The executive stated, “In the next two-three weeks, we will introduce online redemption for all our partner airlines. This means, if you wish to book a ticket with any Star Alliance airline, you can do so on Air India’s website instead of relying on a call centre.” 

Star Alliance comprises 26 member airlines, including Air India, Air Canada, Lufthansa, United, Swiss, Eva Air, Air China, and SAS. Over the past year, the airline has made significant improvements to its loyalty programme. It eliminated blackout dates, permitting passengers to use loyalty points for seat bookings on any day throughout the year. Integration of the loyalty programme’s website with the airline’s main website has also been completed. Previously limited to Star Alliance airlines, the programme has expanded its membership to include hotels, cab companies, lifestyle firms, and more in recent months. 

The executive stated that by the end of this financial year, the programme is expected to have over 50 partners. “Through a comprehensive benchmarking exercise with loyalty programmes worldwide, we are constructing a new programme framework,” he added.

Frequent-flyer programmes worldwide are transitioning from the traditional award chart system due to passenger complaints about the limited number of seats available on it. The Air India executive said the traditional award chart provides excellent value to members but acknowledged its limitation in terms of seat availability.

The airline is planning to introduce a dynamic award chart system in addition to the traditional award chart. This entails offering seats through a “cash plus miles (points)” mechanism for those unable to secure a traditional award seat.

The executive outlined the timeline, stating, “By the end of the financial year, or possibly sooner, we should have the dynamic chart operational. This essentially allows you to offset some or all of the costs using points. For instance, if a ticket costs Rs 10,000, you can choose to pay Rs 5,000 in cash and cover the remaining balance with points. Alternatively, you can opt to pay nothing in cash and redeem the entire amount using points.”