Gary Noakes looks at the advantages of signing up to airline loyalty programmes tailored to small companies

Anyone who travels regularly will be aware of the benefits of frequent flyer programmes, but what may be less well known is that airlines also have schemes to secure the loyalty of small businesses.

Carriers have been working harder to attract small and medium enterprises (SMEs) for the past year or so, since corporate travellers were grounded or sent to the back of the aircraft as a result of the recession. In the teeth of the downturn during 2009, British Airways joined forces with UK Trade and Investment and British American Business and gave away 5,000 return flights to SMEs in a bid to boost the sector. Cynics would say such offers only come along when the corporate travellers stay away, but to others they are proof that airlines do indeed value smaller companies.

Being able to take advantage of an airline SME scheme is relatively easy. The European Commission’s definition of an SME is a company  with fewer than 250 employees, an annual turnover of less than e50 million and with no more than 25 per cent of its capital or voting rights owned by one party.

But airlines apply their own, simpler, criteria. BA sets the bar at a minimum of two travelling employees for a firm to join its On Business SME programme, while others, such as Star Alliance’s Company Plus scheme, allow sole traders to join. The upper limit is also down to the airline with, for example, Emirates putting a top number of 80 staff per company on its Business Rewards scheme.

An important point for anyone considering joining such a programme is that they are separate to those for individual travellers, such as BA’s Executive Club or Emirates’ Skywards, so it is possible for an SME to join and earn points without affecting employees’ own benefits. Joining one should, therefore, be a no-brainer for any organisation given the tangible company benefits that can be accrued without risking upsetting staff through the loss of their individual rewards.

As an illustration, BA claims that On Business saved its members more than £13 million on flights last year, while employees of the firms still walked off with their BA miles.
Hannah Bates, Bmi’s corporate rewards scheme executive, is adamant that companies, no matter how small, should not dismiss SME schemes in favour of belonging to frequent flyer programmes such as the carrier’s Diamond Club. “A lot of people don’t realise they can earn in both – you can get cash, hotel vouchers or flights for your company plus your own points,” she says.

All carriers that run loyalty schemes offer mileage points to both the business and the individual simply because they have to. “We are trying to get business loyalty as opposed to individual loyalty, but the nature of people is that they would always want personal mileage first. We have to uphold that,” Bates says.
For SMEs that regularly use a major UK carrier but do not do a great deal of long-haul trips, Bmi would argue that it has an advantage as in September it ditched its own SME scheme, Company Rewards, in favour of Star Alliance’s Company Plus, the sister scheme of Star’s Corporate Plus.

“Company Plus has been a bit overlooked because it did not have a UK perspective,” admits Bates. “We joined because it’s a better offering for the customer. There are several places we don’t fly to, such as the US, but we have partners that will take you anywhere in the world. Being a member of the Star Alliance scheme is better for companies because they now earn benefits from 13 carriers and 500 destinations.”

Star claims Company Plus was the UK and Ireland’s fastest growing “travel incentive programme for companies” last year. It is slowly adding more redemption partners, with leading hotel brands such as Marriott plus extras such as limo hire and the Heathrow Express.

A raft of accompanying offers in 2010 increased Company Plus’s presence in the UK, such as one flight free per five with Lufthansa Italia. Star’s scheme also has an advantage in that it allows Plus Points to be used to buy cabin upgrades. But unlike, for example, Lufthansa’s Miles and More, it does not permit the purchase of additional points.

Star’s rival alliances, Oneworld and Skyteam, have less of a focus on SMEs in the UK. Here, Oneworld’s efforts to win over small enterprises are limited to On Business from BA, which offers points and discounts to members plus a booking tool. BA is so dominant in the UK market that Oneworld’s wooing of SMEs concentrates on mainland Europe, where it offers its Businessflier scheme in France, Belgium, the Netherlands, Germany, Switzerland and Italy – the heartlands of rival carriers Air France/KLM and the Lufthansa group.

There is also Canadaconnect, a similar offering run in conjunction with Calgary-based domestic carrier Westjet and seven Oneworld members, including BA. “Through these schemes we offer members special rates to all the key destinations for business travellers,” a Oneworld spokesman says. BA says it is evaluating how it can bring the benefits of its codeshare, alliance and franchise network to On Business but, at the moment, points cannot be earned or redeemed on other carriers.

The other bad news for Oneworld’s SME fans is that Businessflier is unlikely to appear in the UK in the near future. “We review it pretty regularly but that’s it for the time being,” the spokesman says. “We look to the home airline to take the lead on the benefits of Oneworld.”

Skyteam’s efforts towards SMEs in the UK are similarly low-key. It, too, leaves schemes to its individual carriers, the most relevant of which are Air France/KLM’s Blue Biz, Delta’s Skybonus and Aeroflot’s Business Club.

The first of these is particularly appealing to regular flyers from the regions using Air France/KLM’s hubs at Paris and Amsterdam. The two airlines merged their respective schemes last year under the single brand. It is a dedicated programme open to any company that does not have a corporate agreement with the carriers. Delta’s scheme is open to any small firm with a VAT number and offers points for every US$1 spent, while Aeroflot’s targets businesses that do not have a corporate contract and have five to 25 travelling employees.

While BA will always have the London and south-east market cornered, it is reasonable to expect Skyteam and the Bmi-bolstered Star programme to make inroads outside these areas. Regional flyers have another option with the burgeoning number of connections offered by the Middle East carriers. Emirates, Qatar Airways and Etihad are all now courting SMEs with loyalty schemes.

Emirates rewards customers with two Business Rewards miles for every US dollar spent on the base fare – the fare minus all the taxes and charges – using its online booking tool. The drawback is that it only rewards travellers on Emirates itself, rather than on codeshare partners, although Emirates argues that its own route network now spans most of the globe.

Another potential drawback is that Emirates does not allow the collection of Business Rewards miles through travel agents, although it is not unique in this as many schemes are stealth tools to encourage direct booking and the capture of passenger data.

Emirates, like many other carriers, encourages SMEs to book via a designated company administrator, providing them with a suite of online tools that allow those in charge of the business to keep tabs on costs. The advantage to airlines is that this discourages the use of travel management companies, which generally have greater negotiating power.

Its scheme is fairly typical of carriers that operate outside alliances in that its benefits are more limited. As well as calculating miles on the base fare, perks such as lounge access are restricted to individual Skywards members, according to tier points.

Qatar Airways launched its Qbiz programme in summer 2009. It is aimed at companies that do not already have a corporate agreement with the airline and operates in a similar way to Emirates’, with Qmiles earned based on dollar spend. Once again, SMEs are steered towards booking direct, with an opening offer of 2,000 bonus miles for the first online booking and 500 extra Qmiles for each subsequent one. It allows the purchase of upgrades but does not offer miles on codeshare partners’ flights.

Etihad will bring its Business Connect scheme to the UK later this year. This is open to companies with two to 50 staff and differs in that it allows SMEs to designate their travel agent as an administrator. It also allows Business Connect members to earn Etihad Guest miles with codeshare partners. In another break with tradition, in some cases the scheme allows collection and redemption of these miles with partner carriers. Under Business Connect, SME members earn their full personal accrual of Guest miles and gain their companies 60 per cent of all first and business class points or 30 per cent of economy points.

Perhaps surprisingly, many carriers do not have a dedicated programme for small businesses. Most of the airlines that fall into this category, including Virgin Atlantic, Cathay Pacific and Singapore Airlines, bring SMEs under their normal frequent flyer schemes. Others, such as Finnair, do not offer a tailored SME scheme but seek out these travellers outside their home market, where the airline is likely to be overlooked by the corporates in favour of bigger rivals.

Finnair’s tactic is to localise some of its rewards to appeal to the particular market. “Finnair Plus is open to any passenger but is targeted towards SMEs,” a spokeswoman says. “You can use the points in restaurants in Manchester and London, for example.”

A final point to remember if signing up is that it is worth encouraging key employees to obtain airline-branded corporate charge cards. BA, for example, has two cards operated with American Express. The standard Corporate Card offers 50 per cent more On Business points when it is used to make bookings, while the Corporate Card Plus also gives a bonus 2,500 points when all spend charged to each individual card exceeds £25,000 in a single year.

What the schemes offer

British Airways On Business

  • Triple points on first six sectors flown
  • Bonus of 50 per cent points for BA American Express corporate cardholders
  • Points valid for three years
  • Minimum two employees required

Star Alliance Company Plus

  • Introductory offer of 1,500 Plus Points, equivalent to a business class upgrade
  • Points valid for three years on 12 airlines (not ANA)
  • No minimum or maximum number of employees

Qatar Airways Qbiz

  • Opening offer of 2,000 bonus Qmiles for the first booking on qatarairways.com
  • Online bookings attract 500 bonus Qmiles for each subsequent reservation
  • n Points valid until the end of the following calendar year
  • n Not open to individuals

Delta SkyBonus

  • Members can earn Silver Medallion status in the Skymiles programme, Delta Sky Club passes and other benefits.
  • Extra points for flights taken to and from non-Delta US hubs
  • Points can also be earned on KLM flight numbers and are valid until December 31 three years after accrual
  • Not open to individuals