2012 sees the return of the Freddie awards and alongside the event Airline Information is running FFP Spring. With speakers from the likes of Etihad, the new PeoplExpress and the guru of FFP programs himself, Randy Petersen, this event is not to be missed.
We hope to see you at the event on the 26th of April!
SeaMountain is delighted to have a guest blogger today, Ivor Smith from Duty Free on Arrival.com with an update of what is happening in the highly competitive world of duty free:
Airline passengers will soon be able print their boarding pass, scan, check-in, board and also buy duty free goods, when QR codes start appearing on their custom delivered boarding passes.
QR scanning apps are now widely available for mobile devices as they facilitate the ease of transfer from the printed word to a web page which can provide comprehensive product information. They are a huge success in the Far East, especially Japan and South Korea and now leading retailers, like Tesco in the UK, are using them to enhance promotional offers.
Simply, consumers see the QR code on a poster, news or journal page and scan the code to gain more knowledge directly on the web.
Securidox believe that the inclusion of a QR code on their securely delivered airline boarding passes will not only enable the passengers’ smooth transit through their airport, but also it will take them immediately to the airline’s onboard sales portal.
When asked about the test, Mark Scott MD of Securidox said, “ID is essential, but a boarding pass is the one piece of paper that every passenger must have to travel. We can add web page specific QR codes to each of our boarding passes, so that the mobile traveller can then scan for pre-flight offers. We are exploring and developing this idea with Ivor Smith of dutyfreeonarrival.com who has secured QR codes and duty free web page data for every world airline.”
Ivor Smith Founder of dutyfreeonarrival.com said “we have a multi-lingual webpage for every airline in the world and we receive hundreds of search strings every day asking for links to in-flight duty free catalogues. The consumer wants to buy and he wants to buy through technology, but he is having difficulty finding his way to the store. This is why he asks us. With the Securidox initiative, he can now print, scan and buy through a simple link affiliation mechanism.”
Mark Scott added, “The hidden benefit of these codes is that (not only) can they be targeted to a specific offer, but also detailed analytics can be collected from each user. Longer term, the facility could be linked to a passenger’s Loyalty account. But the real benefit is that the passenger starts thinking and searching how to ‘buy-on-board’, before he arrives at the airport.”
The current Airline share of the world duty free market is only 7%, so the parties to this test believe that an initiative which will take the passenger direct to the airline shop before he flies, can help to increase sales.
Onboard sales, check before you fly… scan, board, buy and fly!
You might be wondering where the link is between Mileage Plus becoming a new global currency and EzRez launching an e-wallet. But read a bit further and you’ll find out the real significance in this story.
For those of you that are not following the e-wallet story, it is, essentially, a way to have “money” online for electronic virtual payments. So, instead of the wallet being in your pocket or purse, it is online, and you can use that “money” to pay merchants in the virtual world. Which cuts down on keying in 16 digit numbers along with all your vital statistics.
The idea being that increased convenience leads to lower merchant costs and greater sales. Google, amongst many others, has launched an e-wallet, so you might be thinking that EzRez is just playing catch up with their launch.
The answer to this question is the genius and significance behind EzRez’s move. Their currency is frequent flyer miles. Their first partner is Mileage Plus and here is the second bit of EzRez’s foresight – how you can spend Mileage Plus Miles. You will, using the EzRez e-wallet be able to spend Mileage Plus Miles at any merchant that takes PayPal.
Suddenly the whole of the internet becomes the reward catalogue if you are earning Mileage Plus Miles. On top of that Miles become a very interchangeable currency. At Airline Information’s recent Airline and Travel Payment Summit in Toronto, some of the delegates from co-brand cards thought it was odd that there was a “payments” track running alongside their event. As this announcement shows, miles are a currency and you need payment methods to be able to spend them!
To read the EzRez press releases please click on the relevant links below:
Press release for EzRez e-wallet and Mileage Plus partnership
Press release for EzRez and PayPal partnership
This is an extremely interesting area that is starting to heat up. Watch this space!
If you are here in the UK and of a certain age you must just remember AirMiles Latitudes. It was the original FFP currency that BA launched in the UK way back in the dim and distant past. BA wasn’t overly keen on having a “traditional” FFP scheme and it showed in many ways with Latitudes. That scheme then merged/evolved in to the Executive Club which is still here in the 21st Century.
What was interesting in the early days of the Executive Club was that in the UK only you earnt AirMiles as the FFP currency. And the scheme worked on the AirMiles model – you earned miles based on a table of zones (eg London to Glasgow which is about 400 miles would get you 50 Air Miles) but redeemed on distance. So, London to Paris would cost (the minimum) of 500 Air Miles.)
That, as you can imagine for FFP members in the UK caused endless confusion. By definition these Frequent Flyers would be in different parts of the world and they would see promotions offering, say, 2,000 miles free. Now those were different miles. Not Air Miles. The upshot of that was that BA introduced a single currency – BA Miles – way back at the turn of this century.
Earlier today, Avios (the new name for Air Miles as well as BA and IB’s currency) sent a communication to Air Miles collectors answering some FAQ’s. One of them was “Can I collect on flights” to which the answer is yes. Avios members (who have been collecting Air Miles) can now earn miles for flying.
This is a game changer – previously you had to be a member of the Executive Club to earn miles from flying. Now, Avios members can earn for flying as well. That has some very interesting knock-on effects. Clearly, BA hopes that will encourage lots more flying with them and not their competitors such as EasyJet and Ryanair. It also means that they can encourage that flying without having to sign people into a FFP scheme that has tiered benefits. Most occasional flyers can never hope to obtain these benefits – such as free lounge access – with a few flights a year and having them in that scheme was always a mixed message. Now, with being able to offer Avios points for flying, they have found a neat solution to this challenge.
As the French say, plus ca chance…….it might have taken 20 years, but in many ways, back to the future!
If you are here in the UK and of a certain age you must just remember Latitude. It was the original FFP scheme that BA launched way back in the dim and distant past. BA wasn’t overly keen on having a FFP scheme and it showed in many ways with Latitude. That scheme then evolved in to the Executive Club which is still here in the 21st Century.
What was interesting in the early days of the Executive Club was that in the UK only you earnt AirMiles as the FFP currency. And the scheme worked on the AirMiles model – you earned miles based on a table of zones (eg London to Glasgow which is about 400 miles would get you 50 AirMiles) but redeemed on distance. So, London to Paris would cost (the minimum) of 500 AirMiles) which is the opposite way for most FFP schemes where you earn miles based on distance flown and redeem against a zoned table of destinations.
That, as you can imagine for FFP members in the UK caused endless confusion. By definition these Frequent Flyers would be in different parts of the world and they would see promotions offering, say, 2,000 “miles” free. Now those were different miles. Not Air Miles. The upshot of that was that BA introduced a worldwide single currency – BA Miles – way back at the turn of this century. And stopped offering Air Miles for flying.
Earlier today, Avios (the new name for Air Miles as well as BA and IB’s currency) sent a communication to AirMiles collectors answering some FAQ’s. One of them was “Can I collect on flights” to which the answer is yes. Avios members (who have been collecting Air Miles) can now earn miles for flying.
This is a game changer – previously you had to be a member of the Executive Club to earn miles from flying. And those miles weren’t AirMiles. Now, Avios members can earn for flying as well. That has some very interesting knock-on effects. Clearly, BA hopes that will encourage lots more flying with them and not their competitors such as EasyJet and Ryanair. It also means that they can encourage that flying without having to sign people into a FFP scheme that has tiered/elite benefits. Most occasional flyers can never hope to obtain these benefits – such as free lounge access – with a few flights a year and having them in that scheme was always a mixed message. Now, with being able to offer Avios points for flying, they have found a neat solution to this challenge.
As the French say, plus ca chance…….it might have taken 20 years, but in many ways, back to the future!
The industry has been awash with rumours about the re-branding of Groupe Aeroplan. Finally the new name and brand is here.
In keeping with new “A” brand names (Avios being the new currency for BA and Iberia) Groupe Aeroplan, the parent company of Carlson Marketing, Nectar and Aeroplan becomes AIMIA.
To see the new website click here and to read the official press release click here
Many of you might know that fraud for airlines (and many online retailers) is a big issue. In fact, according to the survey done by Airline Information in conjunction with Cybersource, it costs at least US$1.4 billion. Which, in an industry with such slim margins is money that can’t afford to be lost.
So, FFP fraud might not seem such a big issue. One of the recent SeaMountain blogs talked about how accounts had been hacked and goods point with points. Now another source of FFP has come to our attention.
Many airlines have started to sell their miles direct to members. Driven, partly by the functionality offered by the likes of Points.com, airlines have seen this as a good way of driving sales. There are numerous offers in the market from the major players with bonus miles on offer for members to top up their accounts.
However, it seems that the fraudsters have spotted a loop-hole (amazing how they always seem to find them!) in some airlines systems. In airlines without a joined up approach to their payments and fraud strategy it appears that the normal fraud checks weren’t being applied on the directly bought miles. This only became apparent when the chargebacks came in and the miles had gone out to members accounts and been redeemed.
This is yet another reason why it makes sense for the airline people who sell miles (and the majority of them are for co-brand cards) to be at the Airline and Travel Payment Summit where they can speak with the payment and fraud managers from airlines. They can help them devise strategies to make sure the income from mileage sales ends up in the bank and not as chargebacks!
More details of the event in Toronto next week by clicking here
Always nice to have some good news to report – especially with the world economy in such a difficult state. AirBaltic has announced that it is to receive 153 million euros in new capital.
It would appear that the action taken by the company has brought the matter to a successful conclusion and we can look forward to lots more new innovations from them. From their AirBaltic Taxis and bikes in Riga to balticmiles the capital will help them expand and grow pax numbers and deliver further innovations!
For those of you that look to British Airways for innovation you’ll no doubt have been following the introduction of their new single mileage currency. Avios is the name of the currency that will be offered not just to frequent flyers of British Airways but also those of Iberia.
The move to a single currency for both companies is not a surprise given that the parent entity of both carriers, International Airline Group, is intent on buying other airlines. TAP is already in the frame and Aer Lingus has also been mentioned as a potential target (although a bit like BA has been described in the past, they are also being called a pension deficit with wings.) To be able to add all these companies in and manage it successfully, then a single currency helps on the FFP side of things.
At the moment, there doesn’t appear to be a single FFP program – like UA and CO has done – on offer, just a single currency. Although BA has not announced all the changes that are coming and time will tell what those are.
Avios is also the currency that will be offered to collectors of AirMiles in the UK. This coalition program has the same brand name as the schemes in Canada and the Middle East and those companies all franchise the name.
There has been a lot of negative feedback in the UK about the AirMiles to Avios changes. Currently, when you redeem for an AirMiles flight, the taxes, fees and charges are all included. In the new Avios scheme that will not be the case and this has stirred up controversy. Interestingly enough that was the way it used to be with AirMiles before they changed it to be all inclusive.
However, in midst of all this discussion, very few people have commented about the business rational behind ditching 20 years of brand investment in the AirMiles name. BA bought AirMiles (in the UK) in the early ’90′s and since then it has grown and developed into a program with multiple partners and millions of active collectors. So why would you want to change a consumer coalition program with all that brand equity and mix the reward currency with that of Frequent Flyer program?
Maybe it’s because the AirMiles trademark is owned by your arch rival Groupe Aeroplan? Or maybe that Nectar (also owned by Groupe Aeroplan) has managed in many ways to outpace AirMiles in the UK. For example, with its supermarket partner Sainsburys, Nectar Points are their currency, but for AirMiles’ partner, Tesco still award Clubcard points (which you then subsequently have to choose to convert to AirMiles.) On top of that, AirMiles has a stronger flight redemption offer but Nectar has still managed to grab some 18 million collectors – considerably more than their rivals.
Nectar has also been more active in expansion – with both “Nectar for Business” in the UK and also Nectar Italia – something that would be hard under the old AirMiles set up for them to contemplate. However, coalition schemes aren’t guaranteed to be successful – for a myriad of reasons they aren’t for example, big in the US and other key markets.
As ever with business decisions without public information, one can only speculate to the reasons. Perhaps, the owner of the trademark was not willing to renew the deal? So maybe it is not yet adios to AirMiles if the holder of the master trademark sell the rights to another company for the UK? Only time will tell.
Fraud is a big issue, especially for online retailers like airlines. The Airline Information/Cybersource survey of the scale of the problem indicates that it is costing the industry some $1.4 billion a year. And this is probably an underestimate of the scale of the problem.
However, one area that a lot of the airlines that SeaMountain talks with, that has not received as much attention is FFP fraud. In the past the issues here have generally been confined to the likes of staff and travel agents finding work arounds to get miles for flights they haven’t been taking. But, a new type of fraud is starting to emerge.
One example is from the Australian Frequentflyer Gazette where a Qantas FFP member logged on to their account to discover 110,000 points had been spent to buy a computer. This fraud is one to add to the list of family members gaining access to an account and booking flights!
Part of the advice offered by Australian Frequentflyer Gazette is to treat your FFP account like your credit card (or maybe that should be like your bank account!) Which is sound advice. However, it made SeaMountain think about sites like UsingMiles that let you see all your accounts in one place. They do this by you keying in your account number and pin to allow them access into your account.
Now I am sure that there are lots of security features in place on these sites. Which I am sure is what the likes of Target (a huge retailer in the US for readers who haven’t heard of them) who had their database of credit card transactions hacked thought. Target is a very reputable company and bad things happen to good people but if it can happen to them (and they have not been the only big company that has suffered this) it can happen anywhere.
With the vast majority of airlines now accounting for miles properly using the IFRIC13 rules, the number of opportunities to redeem for non flights has mushroomed. Which makes FFP accounts even more attractive to hack and defraud. There are several companies that are providing innovative software to help airlines detect credit card fraud (like Accertify, Cybersource, 192.com and Ethoca – all of whom are attending the Airline and Travel Payment Summit in Toronto on 12/13th of October) and one of them, 41st Parameter has adapted their product to help FFP schemes help detect this type of fraud.
PS SeaMountain is now off to change the password to his BA FFF account!