Etihad improves loyalty scheme

In advance of the launch of their own product, Etihad Airways have released the results of a survey that suggests that airline customers are increasingly frustrated by exiting frequent flyer programmes.With frequent flyers disillusioned by the hidden catches associated with redeeming their hard-earned miles, Etihad Airways, the National Airline of the United Arab Emirates, believe’s it has uncovered exactly what travellers look for in a loyalty scheme. 

As the industry celebrates the 25th anniversary of the launch of the first frequent flyer programme, it is indicative of the issues facing such schemes that one third of those polled by Etihad (31 per cent) believed that the standards of rewards offered to loyal customers had decreased in terms of actual benefits to the individual over the years. 

79 per cent felt that these days such schemes were simply regarded by airlines as clever marketing ploys rather than a genuine service to their customers, while 77 per cent lamented that the only people to benefit from the rewards cited were business travellers.

The Etihad survey, commissioned in the run up to the August 30 global launch of the carrier’s new Guest loyalty and recognition programme, went on to reveal that while two thirds of regular travellers (67 per cent) belonged to an airline loyalty programme, a mere 37 per cent had ever used their accrued points and just one in five (21 per cent) had redeemed air miles within the last year. 

While these results back up claims that the total stock of unredeemed frequent flyer miles totalled approximately 14 trillion miles by the end of 2004 and was worth over $700 billion - more than all the dollar bills in circulation around the globe (The Economist, January 8, 2005) - it also highlighted the main bones of contention amongst business and leisure travellers alike.


Peter Baumgartner, head of marketing for Etihad Airways, advised: “Our research clearly indicates that the travelling public has become increasingly dissatisfied and disillusioned with the concept of frequent flyer programmes.  Taking this consumer feedback on board, our aim remains to introduce hospitality-orientated initiatives which rebalance the notion of encouraging loyalty amongst travellers - this time in the customer’s favour.

“Perhaps the key area where we identified great room for improvement in terms of adding value”, he continued, “was that of flexibility of choice, with an overwhelming majority of the public saying that they would welcome a scheme that puts them in the driving seat.  This theme will therefore run throughout all aspects of our forthcoming new programme, further illustrating Etihad Airways’ ongoing emphasis on challenging existing issues which affect frequent flyers and providing immediate rewards and the best possible service for our Guests.”

This view was endorsed by Randy Petersen, the leading industry expert who said, “I find it encouraging that those in charge at Etihad Airways have studied all of the world’s leading frequent flyer programmes to identify the features that most appeal to members, as well as the pitfalls other programmes have experienced. As a result, Etihad’s loyalty programme appears poised to be the most innovative programme in the world, and certainly one that will attract loyal travellers.”

Another common issue highlighted by participants was the overall lack of choice for lower tier members. Unsurprisingly, three quarters (75 per cent) of those surveyed complained that there was an extremely limited range and choice of rewards options, particularly for those who travel less frequently and tend not accumulate sufficient mileage to enjoy the full selection of membership benefits. 

Peter Baumgartner continues to explain: “As an airline we are proud to epitomise the hospitality that has become synonymous with the UAE and to have built our reputation around the principle of treating patrons as honoured Guests rather than passengers.  The goal of Etihad Airways continues to be to lead the industry in redefining, and responding to, customer concerns and requirements.  As such, we look forward to unveiling our loyalty programme at the end of the month. 

“Many frequent flyer programmes operate as a unit separate from the airline’s larger marketing, product and service strategy”, he continued. “The Etihad programme stands out from its peers in having been designed to be an integrated part of the airline’s overall strategy.  This comprehensive Guest loyalty concept therefore aims to provide a series of benefits and redemption methods which focus exclusively on what the public has demonstrated through our research, is most important to them.”

Etihad’s programme will be launching worldwide on August 30, 2006.  Once launched, membership is free and mile accrual is immediate, with individuals from every country aged 2 years old and upwards eligible to join. Further information will be available upon a dedicated website that will be launched at the same time.

He concluded: “Etihad Airways remains committed to changing the way our guests see the world.  With this in mind, the intention is for our ground-breaking blueprint for loyalty to set new standards in terms of both rewarding our regular travellers and adding value to their experience.  In turn, we hope to further illustrate how making our Guests feel both respected and valued very much lies at the airline’s heart.”

Etihad Airways has also been nominated this year for a


World Travel Award as World’s Leading Business Class Airline.