Air Canada Broadens Focus Of Frequent-Flyer Plan - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


Air Canada Broadens Focus Of Frequent-Flyer Plan

Forty days after acquiring Canadian Airlines, Air Canada is merging the two airlines' frequent-flyer programs into a new division with two goals: to share its customer-relationship management expertise by offering consulting services to other companies and to offer new E-commerce opportunities that use airline points as online currency. If all goes well, Air Canada plans to spin the unit off and take it public on its own.

When fully combined in January, the frequent-flyer programs will include more than 5 million of the airline's best customers, representing more than half its total traffic and more than 60% of its revenue. Its first initiative will be a virtual shopping center at which customers will be able to redeem frequent-flyer points for merchandise and earn points on goods they pay for in cash. The new portal will provide "a significant extension of accumulation and redemption opportunities through both travel- and nontravel-related partnerships," says Rupert Duchesne, Air Canada's chief integration officer during the merger. Duchesne will head the unit.

Industry insiders agree that the focus of IT and marketing resources on best customers is a smart move. They also applaud the idea of spinning off E-commerce initiatives, with their more expensive startup costs and lower revenue models, from the core airline business, much as American Airlines did this year with Sabre Inc.

But the online shopping mall arena is crowded, and competition from the alliance between America Online and American Airlines' frequent-flyer program will be tough, says Rolfe Shellenberger, who invented the concept of frequent-flyer programs for American Airlines in 1981. As far as consulting services, he notes, "I don't think any airline knows enough about CRM to be doing consulting."

But Richard Eastman of the Eastman Group says that after years of partnering with American Airlines, the leader in customer-loyalty programs, the new Air Canada "certainly knows enough about CRM to be a consultant in Canada, especially to others in the travel industry." In a market where consumers travel less often by air and more often by train and car, it's smart for the carriers to broaden the focus of their loyalty program beyond just airline tickets. Says Eastman, "They recognize and understand that their market is different then the U.S. model, and they are going after their own revenue stream."

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
2021 State of ITOps and SecOps Report
2021 State of ITOps and SecOps Report
This new report from InformationWeek explores what we've learned over the past year, critical trends around ITOps and SecOps, and where leaders are focusing their time and efforts to support a growing digital economy. Download it today!
InformationWeek Is Getting an Upgrade!

Find out more about our plans to improve the look, functionality, and performance of the InformationWeek site in the coming months.

Remote Work Tops SF, NYC for Most High-Paying Job Openings
Jessica Davis, Senior Editor, Enterprise Apps,  7/20/2021
Blockchain Gets Real Across Industries
Lisa Morgan, Freelance Writer,  7/22/2021
Seeking a Competitive Edge vs. Chasing Savings in the Cloud
Joao-Pierre S. Ruth, Senior Writer,  7/19/2021
Register for InformationWeek Newsletters
Current Issue
Monitoring Critical Cloud Workloads Report
In this report, our experts will discuss how to advance your ability to monitor critical workloads as they move about the various cloud platforms in your company.
White Papers
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll