How Do Frequent Flyer Programs Work

Whilst we may have been confined to our home states over the past two years, it has in fact been an optimal time to be a frequent flyer member. We have been able to gain points from the comfort of our homes. So many frequent flyer programs offer points to members when we do simple tasks like online shop or purchase our groceries. Now that air travel is open and ready for us again, it is time to utilise all the points we accumulated.’

Here we will show you how to reep the benefits that come with being a frequent flyer member, and these perks aren’t just limited to the next time you fly. 

The money we spend: 

One of the main ways frequent flyer strategies operate is through a reward system for the money we use, often done through points earning credit cards.

When done this way, we accumulate a certain number of points per dollar spent, depending on the type of card and its benefits. This works by redeeming the points for various rewards, such as money towards paying for a dream trip or shopping.

These cards also have the potential to offer other benefits, such as unlimited accumulation. 

However, as with most credit cards, the money needs to be paid back, otherwise, it incurs interest, leading to debt. 

The "currency" of loyalty:

Frequent flyer programs also work on the grounds of people being loyal and valued customers to a particular airline, much like having long-standing loyalty with any other business. 

The points system creates a certain means of currency, by building up a flyer's miles, based on distance. 

This gives them status and rewards the customer with perks, such as class upgrades, depending on the policy. 

The airline has the ability to decide how much to issue in return for the reward given. 

The birth of the programs:

To understand truly how frequent flyer programs benefit an airline, you have to go back to where they started. 

The concept of "frequent flyer" loyalty originated in the United States, which is why we focus on calling them "frequent flyer miles." 

In the good ol' USA, before the onset of their deregulation in 1978, (Australia didn't enact this until 1990), "frequent flyer" was a literal term.

However, deregulation allowed airlines to be more competitive in the economic sphere from everything from route choice to the cost of fares. 

From then on, airlines tracked the distances flown by their fleet and gave benefits to customers for standing with them against their competitors. 

With this, customers built up their respective "miles" for staying devoted to the airline. 

Being classed as a "frequent flyer:"

While the literal term may seem simple enough, in terms of an airline's program to reap benefits, it can seem a little bit different.

While you may be part of a frequent flyer program and have a certain number of points, it is wise to remember that the airline can determine the amount issued depending on the program, and class who is a "frequent flyer."

For example, someone may have a "gold status" but reap benefits such as an upgrade to "business class."

Whereas, another person may have "platinum status" but fly three to four times a year and do it over a long distance, therefore building their points faster, or they may have earned 1 million miles or more in a year (3 to 4 flights a month). 

Therefore, your status really can come down to the type of program you're in and what is offered to you. 

Points through Partnerships:

Another way that frequent flyer programs offer status points is through partnerships with other airlines or businesses. 

This is much to that of my earlier point about what we spend, however with these certain partnerships, you can accumulate your frequent flyer points a lot faster, and not necessarily just on a credit card. 

This can be through a partner airline and their point earning rates when it travels a certain route or through that of certain purchases with their fellow shopping partners. 

Conclusion:

Therefore, from gaining status from your credit card to how far you fly, and using various partnerships from whom and where you shop with, you will often find that the true big business of an airline is keeping your customer loyalty. 

Because, at the bottom line, the airline needs their program and the program needs the airline. 

Therefore, in truth, you, as the frequent flyer, are the buyer and your loyalty is the true currency that the airline uses as a selling point.