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A new vision for airlines...not flying?

Airlines and the entire travel industry is in a state of flux, even as restrictions begin to reduce. Across the globe, airlines have received taxpayer-backed loans, gone into administration or worse - it has been an awful year for companies that are in this industry. One bright spot for most airlines has been their frequent flyer programmes which have huge value and can sometimes be worth more than the airline itself. The primary US airlines like Delta, United and American all used their frequent flyer programmes as collateral to keep their business afloat - primarily by selling their points or miles to credit card issuers like American Express or Chase.

Unfortunately, the long term future for airlines is not positive with the pandemic still causing issues and climate change legislation targeting their green credentials. Some are instead looking to branch out further into ancillary and even completely new sectors. The greatest example to date is Cathay Pacific, one of Asia's largest airlines, which has been decimated by the pandemic due to the closer of borders in the region and lack of a domestic home market. Cathay Pacific Group have announced the launch of the "Cathay" lifestyle rewards brand designed to create a cohesive programme that rewards their customers from much more than exclusively just flying.

Cathay Pacific is a premium brand and there is a space for a premium lifestyle rewards brand across the region or globally for the new Cathay to galvanise. Today, there is a disparate design to their current rewards programme split between:

  • Asia Miles - the currency of the awarded points
  • Marco Polo Club - the fee-paying frequent flyer programme of Cathay Pacific
  • Cathay Pacific master brand for the airline

This is a confusing setup and the move to a unified Cathay brand to reward customers is a simplifying move that looks to help make the business more sustainable beyond aviation. Additionally, the move to the Cathay brand will enable consumers to earn both Cathay miles, to spend within their ecosystem, and tier points that give customers benefits like lounge access when flying on their airline. I would expect to see Cathay expand to partners outside the aviation industry with opportunities to both spend and earn - expect opportunities like the earn and burn (spend) of Cathay miles at:

  • hotel chains
  • coffee shops
  • restaurants
  • other member companies of Cathay's main shareholder Swire Group
  • gyms and other lifestyle destinations

All this is hoped to bring customers within the Cathay partner ecosystem, earn money from non-flying opportunities and further encourage people to spend their earnt miles on Cathay Pacific itself.

https://www.youtube.com/watch?v=9FnvElb45Ao&ab_channel=cathaypacific

In the UK, we're seeing similar moves by Virgin Red the new unified rewards programme of Virgin Group spun off primarily from Virgin Atlantic Flying Club miles. The new Virgin Red programme links together benefits across the group's brands, including Virgin Money, Virgin Media and other partners, to enable people to earn Virgin Points on them purchases or accounts. Red helps bring people into the Virgin Group of companies and the ability for their customers to spend them points on flights, holidays or even a Greggs sausage roll.

The expansion of programmes like Cathay and Virgin Red give consumers the ability to maximise the balances of their points without the need to directly fly as well as expanding the accessibility of their services. I'm excited to see how Cathay or Virgin Red can add value to their customers lives and bring them closer to the travel they aspire to. I am looking forward to seeing how Cathay and Virgin Red can enable greater opportunities to earn in their respective schemes and bring us all closer to flying in the near future.

What's your thoughts on the new schemes launched by Cathay and Virgin? Would they make you more willing to participate? Let us know in the comments!