This week, we look at a new way to think about customer loyalty programs, British Airways brush with GDPR and continue our discussion on new aircraft models.
In order to provide more value to our readers, we're refining our approach to our weekly news roundup. Rather than outlining everything, we're going to pick a few topics from the week that we find worth discussing and provide a bit more context. As a reminder, you can always keep up with the daily news over at Kambr Curated. This time around, we'll dive into customer loyalty programs, customer data and new aircraft models.
A New Look at Airline Loyalty Status tiers
There's been a lot of talk about frequent flier programs with much publicized recent changes from Qantas and American Airlines. At the center of these discussions has been loyalty tiers. Travel Data Daily's Mark Ross-Smith has started penning a series on what a new airline loyalty status tier could look like. For anyone interested in airline loyalty programs, Ross-Smith is a must follow!
Be sure to check out Kambr Media's coverage on frequent flier programs:
- How American Airlines Can Make ConciergeKey Truly Elite
- What Risks Do Airlines Face In The Shift Away From Mileage Award Charts?
Ross-Smith outlines, The desired output, or goal-in-mind approach to where the loyalty program wants members to act within, requires clearly defined boundaries and rules for which the member can do whatever they choose. By engineering the program in a way where it’s highly desirable for members to play within the box, the loyalty program can continually move that ‘sweet spot’ box and the members will modify their interaction with the brand to remain in that box.
Ross-Smith believes if the qualification criteria for certain tiers were adjusted to accommodate current and future trends using the right data analysis, a loyalty program could deliver more value to members while also increasing revenue for airlines. Be sure to follow along. In part two, he'll explain how to calculate revenue uplift, lost revenue, and the data science logic behind it.
Customer Data Sensitivities
Of course carrying out a successful customer loyalty program entails the handling of customer data. If this is not done correctly, not only is there a loss of opportunity, but in the age of the General Data Protection Regulation (GDPR), a direct loss in money. British Airways has found this out the hard way.
British Airways is facing a record £183.39 million ($230 million) fine over a 2018 security breach that compromised the personal data of roughly 500,000 customers.
According to the The U.K. Information Commissioner’s Office (ICO), the breach happened some three months before it was reported and is a result of poor security arrangements.
It should be noted, that the ICO believes British Airways has made improvements to its security measures since reporting the breach.
This should be a reminder to not only airlines, but anyone handling customer data to do so carefully, invest in proper security measures and most importantly, always follow regulations. As data is emerging at the forefront of many commercial aviation projects, this will become increasingly more important.
Aircraft are Changing the Aviation Landscape
This is something we've discussed some already, but cannot be understated. The production and adoption of new aircraft models is ushering in a new era of aviation.
Jose Antonio Payet at AirlineGeeks believes, [this has] highlighted a shift towards optimization of resources with the use of more fuel-efficient aircraft that enable airlines to effectively serve their networks and help them expand to more destinations.
It's tough to put it more succinctly than that. Aircraft such as the Airbus 321XLR will allow airlines to fill underserved routes because of its fuel efficiency and extended range as a narrow body.
This opens up a host of new possibilities for network planners and customers alike. The benefits are two-fold. Not only will customers have the ability to fly direct to smaller cities, saving time, the omission of an extra leg can potentially reduce CO2 emissions. And as we've seen, this has become a very hot topic in the press.
Be sure to check out Payet's article to see his full analysis of different aircraft.