Loyalty is important in any business, but with a perishable product like an airline seat, it is particularly important to the airline industry. As such, airlines strive to maintain customer loyalty via a number of programs, targeting the frequent flier business person. Customer loyalty programs are an integral part of all major airlines.
Airline loyalty programs are designed to develop repeat business by providing customers with benefits. Customers register with an airline, and then their flight activity is tracked. This includes such information as miles flown, destinations most frequently traveled, class of service and total revenue generated for the airline. Upon completion of certain milestones, the airline rewards the flier. Airline programs generally reward customers for the miles they fly, but some airlines also provide greater rewards for customers who generate high revenue, such as those flying internationally and who purchase full fare premium tickets.
Free travel is the primary benefit, which is provided after the customer achieves a mileage level in their bank (e.g. 25,000 miles flown is a common reward for a free USA domestic ticket). Another option available includes an upgrade to a higher class of service. Airlines also have agreements with other travel related (and some non-travel-related) companies where miles can be redeemed for free services/products (for example, hotels/car rentals).
Airlines increase rewards for high mileage fliers upon completion of a year in a program, and increase these benefits over several mileage thresholds. These customers are awarded various "status" levels depending on the mileage flown. Airlines often offer free baggage checking (i.e. no fee for initial checked bag), airport priority boarding and special seating on the aircraft. Customers who have been identified as high revenue fliers also often receive special concierge handling at the airport and free admittance to airport lounges.
Miles can be redeemed for flights at any time, but a certain annual flown mileage level must be attained to maintain or increase a loyalty program status level. Airlines often provide these customers with mileage incentives during the year to increase customer loyalty, such as providing additional mileage if a premium class of service is purchased, or to encourage customers to take certain flights. Some airlines also award long term high mileage customers a status for life, such as those who have at least 1,000,000 lifetime miles.
While frequent business travelers choose the airline that best fits their destination and scheduling needs, no airline can provide flights to all destinations. So most airlines "partner" with carriers offering complementary (and sometimes competing) service, thereby providing a more complete product. Flights on these partner carriers are considered loyalty flights in the primary program, and miles are added to the traveler's account. Thus it is important to know the partners in an airline's loyalty program.
