one preferred airline programme to another. “Where a frequent flyer scheme is aligned with


a preferred supplier contract they can of course be a force for good, in helping to drive compliance,” he explains. Nonetheless, Stone believes a frequent flyer programme can interfere with the corporate travel programme. “The very savvy travellers are quite capable of constructing meetings with flights they need to earn points. That has been a thorn in travel managers’ sides and continues to be.” One such buyer is Maragaret


Birse, global travel director at Serco. “These programmes cause huge issues for us and provide very little in the way of genuine value. We are often in a position whereby we have to challenge a traveller around choice of airline versus price. “It leaves our travel team in an awkward position as they know the individual is making choices for points and miles but they can only go so far to challenge this. They are measured on their success delivering value to the business and feel hampered in doing so by the choices of the traveller or booker. At times the team escalate to senior people and then have to deal with the individual who is clearly not happy once pulled back in line,” says Birse. Birse actually goes further than Stone and believes that the airlines actively try and influence traveller behaviour. “The airlines spend a lot of time talking about costs of sale and the various distribution channels, but continue to use their loyalty programmes to influence buying behaviour, which unfortunately often conflicts with corporate policy.” How do airlines respond to these claims?


Ian Romanis, head of customer engagement at British Airways, says, “The Executive Club is a key part of the marketing mix. It gives us the ability to recognise customers at an individual level. For our corporate customers the message we want to convey is that flying with British Airways is not just about price, but about value.” Romanis says one of the key aims for BA with


the Executive Club was to ensure that corporate travellers chose BA for leisure too: “We want to build an ongoing relationship so when they are not travelling for business, BA is the natural choice for their leisure bookings too.” The airline recently renamed BA miles ‘Avios’, following its merger with Iberia, which will allow


“Airlines continue to use their loyalty programmes to influence travel buying behaviour, which often conflicts with corporate guidelines”


people to spend money on hotels and car rental, as well as purchase flights using fewer points. It is also set to announce a whole raft of changes to its Executive Club, including the introduction of an interim Bronze tier, between Blue and Silver. The carrier’s corporate loyalty programme OnBusiness remains unaffected. Romanis, whose background is


in corporate sales, acknowledges the frustration such programmes can cause buyers: “We under- stand how frequent flyer pro- grammes can help and how it can build strong benefits. But I acknowledge that it could be perceived as causing a buyer a bit of a problem,” he says. “It’s about getting the right balance. It’s about talking to the travel buyer and travel


managers and working with them to strike the right balance. I maintain a very close relationship with sales teams around the world and corporate travel managers. I work with them to come up with the best solution for the corporate customer and I stay in close contact with the sales teams.” It’s a similar story at Virgin Atlantic where Alan


Lias, head of loyalty, says, “Corporate sales teams have a different relationship with clients and travel buyers and with travel management companies. We have ongoing communication with all of them about what we are doing, it is very important. We brief all internal teams and corporate sales teams.” Virgin is rarely a corporate’s exclusive preferred airline, which is when Flying Club does become useful, as Lias explains: “Flying Club makes the most difference when we go head to head with another airline [in a corporate travel programme]. It gives flyers a choice.” And when it comes down to knowing what promotions the airlines are putting out into the market, Lias says the solution is simple – join a frequent flyer programme, or several. “A lot of corporate buyers are members of multiple loyalty schemes,” he says. Lias believes that for many airlines, frequent


flyer schemes are ‘a necessary evil’. As with British Airways, they are a key part of the marketing mix at Virgin. “It’s not just for business travellers – we want all customers to join the Flying Club. It’s not just a vehicle for members to have benefits, it’s about feeling part of the Virgin brand. And apart from advertising, this is the most direct route to the customer,” he says. Virgin will be revamping the Flying Club in mid-


November. One change will be that the same number of miles will get you further. The airline will also be making a number of enhancements to its loyalty scheme for small businesses, FlyingCo, including the introduction of a Visa card, where companies can earn one mile for every pound spent. The scheme is popular, with many Gold members using the companion ticket reward to take colleagues on business trips. “Mid-sized businesses use it frequently. You could argue that it dampens any fires because travel managers can really see its value,” says Lias. Not all airlines offer a business loyalty scheme


and Janet Titterton, director with Collinson Latitude, a global provider of incremental revenue products, believes airlines need to think more innovatively to improve their customer engagement and retention, chiefly by providing corporates with value for money or passing back value derived from airline’s brand buying power. “The flexibility of travel loyalty programmes is


also key to their success. The market is constantly evolving, so airlines and hotels need adaptive strategies to offer programme flexibility that meets changing market dynamics and customer needs.” In other words, they should listen to their lucrative corporate customers.


CHANGES AFOOT AT BA


From November, British Airways will revamp its Executive Club and will focus on the introduction of a new currency, Avios, to replace BA miles, to reflect the merger with Iberia, to a wider group of customers. The new reward currency will allow members to do three main things – go further for fewer miles and use miles to redeem in hotels and with car rental companies. The airline is also keen to reposition the Executive


Club to, in their words, “create a greater sense of membership and emotional attachment”. A new look and design for the Executive Club, including redesigned cards, is part of this strategy. The main changes will be: a new Gold Guest List


card; a change of tone used in communications with members; additional benefits for Gold Guest List customers; new fairer, more flexible approach to the customer's membership year; and a slight increase in Tier Points awarded for long-haul travel. The big news is the introduction of a new fourth tier


within the Executive Club – the Bronze card, which will be positioned above the Blue card but below the Silver card. The Bronze tier will be achieved at 300 tier points or 25 segments (which is half the effort required to get to Silver), and will include: business class check-in; priority stand-by and wait-listing; seat selection at less than seven days to departure; mileage tier bonus of 25 per cent; priority free-phone number; priority at baggage arrival services desks; and luggage tags.


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