Members Only: Etihad Launches Loyalty Program Before U.S. Debut

Etihad Launches Loyalty Program Before U.S. Debut
Three-year-old United Arab Emirates national carrier Etihad Airways last month launched a new loyalty program, called the Guest Program, ahead of next month's U.S. debut. In an attempt to address popular qualms with frequent flyer programs, Etihad said it places no blackout dates on reward flights, while giving program members the ability to redeem seats through a combination of accrued miles and cash. The carrier expects to launch service from New York's JFK Terminal Four to Abu Dhabi in late October. Etihad CEO Geert Boven said the features of the reward program resulted from internal research that showed loyalty programs have disillusioned many airline customers. Etihad said 31 percent of the survey's 1,632 respondents "believed that the standards of rewards offered to loyal customers had decreased in terms of actual benefits to the individual over the years." Furthermore, the survey noted that 79 percent of respondents felt loyalty programs are nothing more than "clever marketing ploys rather than genuine services for their customers." Etihad Airways head of marketing Peter Baumgartner said, "Our research clearly indicates that the traveling public has become increasingly dissatisfied and disillusioned with the concept of frequent flyer programs. Taking this consumer feedback on board, our aim remains to introduce hospitality-orientated initiatives which rebalance the notion of encouraging loyalty among travelers—this time in the customer's favor." Randy Petersen, editor of Inside Flyer magazine and an expert on airline loyalty programs, said he found it "encouraging" that Etihad studied customer attitudes toward loyalty programs. "Etihad's loyalty program appears poised to be the most innovative one in the world and certainly one that will attract loyal travelers." The carrier said that within 24 hours of launching its new program, 3,000 applicants from more than 50 countries registered for the program.

Low-Cost Carriers Bolster Rewards Programs
Several low-cost carriers in the past year have launched loyalty programs as a way to make their products more palatable to business travelers, according to analysis by IdeaWorks, a branding and marketing consulting firm. "Low-cost carriers are shedding their no-frills personalities and are adding amenities as competition increases with established airlines and even other LCCs," a report released this summer said. "These airlines are reaching out to capture business travelers with services normally associated with legacy airlines." The report notes European low-cost carriers Germanwings and Virgin Express, Australia-based Virgin Blue Airlines, Asia-based Kingfisher, Hawaii-based Go and Spirit Airlines all have rolled out loyalty programs in the past year, as have transatlantic premium class startups Eos and MaxJet. "The spurt of activity within the last 12 months suggests a trend within the LCC sector to add loyalty marketing strategies," IdeaWorks said. "They may share little in common in terms of product attributes, but the airlines share a common goal to add frequent flyer benefits as an advantageous customer amenity."

IHG Expands Any Hotel Rewards Option To Europe
InterContinental Hotels Group this month expanded its Any Hotel, Anywhere Reward program to the United Kingdom and other European Union countries. Launched last year in the United States and earlier this year in Canada, the program allows IHG's Priority Club frequent guest program members to redeem points earned at IHG-brand hotels at non-IHG properties worldwide. In a lodging industry first, IHG partnered with American Express to issue a prepaid card that allows Priority Club members to convert points to a cash equivalent that then can be used for free stays at other hotels. The prepaid card can be used at 500,000 hotels worldwide where American Express is accepted. "Loyalty is a two-way street, so by giving our members this greater flexibility, we believe they'll stay even more loyal to us," IHG senior vice president of multibrand and relationship marketing Steve Sickel said in a statement.

Dollar, Thrifty Expand Airline Reward Partnerships
Dollar Thrifty Automotive Group brands Thrifty Car Rental and Dollar Rent A Car are offering rewards programs in conjunction with airlines' frequent traveler plans. Thrifty is offering triple frequent flyer milers for rentals booked through its Web site for the rewards programs associated with Alaska, American, Continental, Delta, Northwest, United and US Airways through Nov. 15. Dollar is offering 1,000 bonus miles for those same airline programs, also through Nov. 15. Thrifty also has partnered with ATA Airlines' frequent traveler program for a 75-point-per-rental bonus program. The rental car company, however, said that industry discount rates, tour rates and complimentary rentals do not qualify for frequent flyer points.