April 24, 2024

Everything you need to know

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Air India has been working at record speed to develop and roll out a new version of its loyalty program, with huge changes for customers.

Ajay Awtaney, Skift

Air India’s ongoing transformation is one of the most closely watched developments in the aviation world – and rightly so. The recently privatized airline, which serves a country with 1.4 billion inhabitants, is playing catch-up with its international peers.

Speaking at the Skift India Summit last month, the airline’s CEO Campbell Wilson likened the overhaul of the 92-year-old airline to launching a start-up.

In addition to new aircraft, IT software and training, the Flying Returns loyalty program is a key area for improvement. Although it’s celebrating its 30th anniversary this year, the frequent flyer platform feels stuck in a different era, having last been updated in 2012.

Air India’s new program goes live today and it’s a huge improvement. Here are six key changes to earning and redeeming these all-important rewards points:

1. Move to value-based revenue

Previously, the airline awarded points based on the distance travelled. Air India will now award points to customers depending on the fare paid. This brings the arrangement in line with other international carriers. In the US, the system already exists with airlines such as JetBlue, Southwest, Delta and United.

2. Points never expire, but terms and conditions apply

Under the old scheme, all unredeemed points expire three years after they were earned. Under the new program, the airline will keep the points alive as long as the member flies Air India at least once in 24 months.

3. ‘Cash + Points’ format introduced

This is a great option for customers who don’t have enough points to earn a completely free ticket. It works by paying part of the price of the fare with miles and making up the balance in cash. This should reduce the chance of kilometers being lost.

4. Latest seat availability

One of the common complaints about airline loyalty awards is the limited number of seats available for redemption. To help address this, Air India is moving to a hybrid model.

Some seats will still be offered at fixed points rates, but there will be an additional option to redeem points for each seat using a dynamic pricing system.

5. Award chart for better value

A current issue for many Air India frequent flyers is the higher number of points required for redemption compared to other airlines. Now Air India compares itself to its competitors, and the numbers look much better.

For example, on India’s busiest domestic route, economy class redemptions from Mumbai to Delhi are now available from 5,000 points instead of 10,080 points. Even on international flights, prices have been reduced.

For example, on the Delhi-New York JFK route, redemptions start at 62,000 points, compared to 80,000 points in the previous program. United Airlines, which competes on the route (although it serves Newark), charges anywhere from 50,000 to 125,000 points using a dynamic pricing model for each economy seat.

6. Redeeming Star Alliance is done online

Last but not least, Air India has also implemented the option of redeeming Star Alliance partner rewards online. This is a project that was supposed to be completed many years ago, when the company was still state-owned.

With easier and often cheaper ways to redeem Air India points, you may be wondering how to earn them. The airline has been working hard in recent months to create a huge ecosystem of earning partners. Air India says it currently has about 50 members, including credit card providers and luxury hotel chains. The goal is to triple this number in the near future.

Air India Loyalty Cards 2024Air India Loyalty Cards 2024
Image credit: Air India

Air India simplifies loyalty status

The airline’s loyalty program is known to be the most difficult to gain status in India. In theory, a customer could travel the same route forty times a year and still not reach silver level. Good news: as part of the refresh, the status levels have been greatly simplified. Here are five key developments:

  1. Levels renamed: As part of the simplification exercise, Air India has moved away from the long names, including the Maharaja Club, which used to denote the highest level. Now, Air India’s four loyalty levels will be known simply as Red, Silver, Gold and Platinum.
  2. Easier to earn status: Air India has reduced the requirement to become a status holder in the airline’s program by 40% across all three status levels. This development is accompanied by the shift towards value-based profits. Air India has also added a new metric for the number of flights. Essentially, this means that those who are frequent travelers but don’t spend very much on the airline are also eligible for status, rewarding loyalty in the truest sense of the word.
  3. Star Alliance membership is valued: Air India has also left the door open for qualification with other Star Alliance partner airlines. It says that to achieve Air India status, only 30% of flights need to be at least with the airline itself.
  4. Priority and premium one-stop member service: Silver, Gold and Platinum members have access to a central member service contact center. This should be a way to bridge the non-status customer queue when dealing with customer service teams.
  5. New benefits: The program is finally starting to appear and introduce additional benefits to its top customers. Gold and Platinum members can now change their tickets for free. They can also select the seats for free and even be moved to an earlier flight if space is available.

The airline hopes the new system will win customers back to its own internal loyalty platform. Currently, many frequent flyers credit their flights to other Star Alliance airlines, which means a huge cash flow for Air India.

Current developments still leave a number of questions unanswered. Not least the integration of Air India Express and Vistara into the program, which will take place at a later date.

Is Air India’s Flying Returns the best loyalty program out there? No. But these changes certainly help bridge the gap and make it a more competitive offering.

Watch Campbell Wilson, CEO and Managing Director of Air India at the Skift India Summit 2024:

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