[LuganoPirate]

I came across this rather interesting article on LinkedIn. It seems to advocate a way consumers can use their loyalty miles/points thanks to a cross company platform. I’d never thought of miles as being a liability on an airline’s balance sheet and it seems this is way to get consumers to spend them, remove the liability and enhance their brand.

What absolutely amazed me though was there are currently 9.7 trillion unused frequent flyer miles around the globe!

https://www.mercator.com/blog/blockchain-the-next-evolution-in-airline-loyalty-programs

[DavidGordon10]

Fascinating, LP.

Two comments:

I suspect that one reason for US households belonging to many loyalty programmes is the way they are marketed. A couple of years ago, booking a Delta flight on their website I just could not do it without signing up to the Delta loyalty programme. Get lost! – I have a perfectly good SkyTeam loyalty card already.

Second, the perceived benefits of airline loyalty programmes differ from culture to culture (N America vs Europe vs Asia) and from passenger to passenger:

1. Reward flights
2. Upgrades
3. Lounge access

For me, (3) is the one that matters. My American colleagues value (2). Many on this forum seem to find (1) the most important. Would the ability to shift points around using blockchain technology help me?

[capetonianm]

“I’d never thought of miles as being a liability on an airline’s balance sheet ”
Me neither, but it was explained that since the customer has the potential to redeem them, they remain a liability to the airline until redeemed.

[FDOS_UK]

Have you noticed how airlines try to remove the liability?

e.g., mile spromotions in quiet periods (they have to operate the flights anyway, so may as well take the marginal cost of FF scheme travellers, whilst avoiding denting income. The same applies for less well performing routes, often high FF redemotion availability.

Then, every few years, the airline regrades the earning/redemption levels to add ‘inflation’ to inflate away some of the liability.

Anyone noticed any others strategies?

[LuganoPirate]

[quote quote=813821]Have you noticed how airlines try to remove the liability?

Anyone noticed any others strategies?

[/quote]

Reducing the time they are valid for. Lufthansa’a are valid for 3 years unless you have Gold or Silver card or a credit card tied to the programme, in which case they reamin valid for as long as you hold the card + 3 years.

BA was three years as well but I believe is now down to the current year + the following year.

[LuganoPirate]

I have to agree with you David, I use mine mainly for reward flights and the occasional upgrade, whereas two American colleagues use their’s uniquely for upgrades.

I have no status with BA so the few miles I earn are wasted as they expire, but if there was a way to spend them I certainly would. Likewise with a few other airlines and hotels.

[openfly]

Flying Blue KL/AF only have a 20month validity.

[stevescoots]

one possible reason why so many households in the US have several accounts is the rules on lounge use. for example I am flying Delta in F in the US but cannot use the lounge domestic as I am not a member of their program. (AA are the same). simple solution would be to join their program, meaning i would then have another Skyteam card on top of the 2 I already have.

[JKL]

Interesting article, but it reads like an attempt to get further up the Google rankings when people search for “Blockchain”… 😉

Certainly an interesting technology, which will no doubt have many uses and revolutionise/disrupt many indistries – but it strikes me that all the issues mentioned in the article are matters of airline policy rather than technology.

Not sure blockchain per se will do anything to increase redemption seat abailability, or make it any easier to book, or prevent regular miles devaluations; and would airlines really want a unified mileage currency / ability to redeem miles on any airline? I would have thought not, but perhaps I’m missing something. Even if they did, arrangements would have to be negotiated and deals done, which surely comes down to people and decision-making, not the latest buzzword-du-jour technology… 😉

That said, blockchain may well be a very useful technology for airlines to adopt, but perhaps not for the reasons the article suggests?

[bluemooner]

Openfly – I read that the flying blue expiry period increased in March from 20 months to 24 months. Also, if you use an Air France linked credit card, the usage of the card then extends the expiry date.

[icenspice]

That is correct, bluemooner. My last Flying Blue transaction was on the 8th May and the miles I have accumulated are valid until the end of May 2019.

[PeterCoultas]

bluemooner: does that mean that my flights with KLM in November last year are OK through to November 2018?

[bluemooner]

PeterCoultas – by my understanding of the rules, yes. Go on line and read them too, Icenspice seems to think I am correct too.

[PeterCoultas]

bluemooner: many thanks

[LuganoPirate]

To be honest, I’m not even sure what a “Blockchain” is?

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