The pandemic has landed nearly 30% of the world’s commercial jets, but gurus like Ajay Awtaney, founder of India’s largest airline miles website, say this may be the best time for loyalty program members to spend or accumulate points.
“Don’t panic! The opportunity to travel has decreased, but not to earn miles, ”said Awtaney, who founded LiveFromALounge.com in 2011.“ Airlines have been offering greater incentives, and people should take advantage of this opportunity because miles have not lost value. ”
Even with passengers stranded at home, operators have made offers to accrue miles more cheaply or redeem them at great discounts. British Airways recently offered a promotion with flights for 50% of the miles normally required.
Many have extended the validity of elite status, reduced qualification requirements to move up a level, or eliminated the expiration of points, as countries have restricted entry or made travel less attractive with mandatory quarantines.
The reason: airlines desperately need cash to survive the coronavirus crisis, and loyalty programs are a major source of revenue, so they make new offers to members and try to bring new ones on board.
These programs have become a vital crutch for operators, who need funds so much that they now convert landed jets into restaurants, sell drinks carts and organize tourist flights to nowhere. The best plans have armies of followers eager for reward flights and upgrades, and can generate hundreds of millions of dollars a year for airlines.
In this unprecedented sector crisis, IAG, owner British Airways, managed to raise almost $ 1 billion by selling points to American Express, while others like Delta Air Lines and United Airlines offered their programs as a guarantee for billions of dollars in loans and bonds.
Some airlines are earning more from loyalty programs than flights, a useful lifeline with the number of global air travels halving. Qantas Airways’ loyalty division was the airline’s largest source of revenue in the year ended in June. The Australian operator expects the unit to make a profit of 600 million Australian dollars ($ 430 million) by June 2024, almost double the current value.
Singapore Airlines, Cathay Pacific Airways, Qantas and the main airlines in the United States are among about a dozen in the industry with the most valuable mileage programs, thanks to the strength of brands and credit card partnerships, according to OAG Aviation Worldwide.