When it comes to loyalty programs consumers want more recognition during their travels and better access to award seats. Star Alliance appears keen to deliver on both those fronts according to CEO Jeffrey Goh’s presentation at the IATA Annual General Meeting in Sydney. These offerings will grow within the new middleware platform, joining features like interline advance seat bookings and baggage tracking, easing data integration for member carriers.
Growing award availability
Goh specifically called out the opportunity to expand access to award seats as a key component of the group’s digital evolution. The goal is to increase customer satisfaction and simultaneously reduce airline costs (fewer call center interactions) and reduce airline liabilities for frequent flyer points.
We thought that the better experience for the customers would be to provide a digital experience through an online platform where customers can be in control of their own experience for redeeming miles…That’s part of our strategy for making the customers’ experience better, of handing back control of that experience.
If you’re betting on suddenly seeing a flood of new award seats open up for cheap trips, however, it might be smart to temper those expectations. Goh later clarified the statement, suggesting that the goal is to enable “dynamic redemption” across the alliance, not adjust the number of seats showing at the base award level.
Almost half of our membership today offer what is known as “dynamic redemption.” The questions is can we rise to the challenge of dynamic redemption across the alliance. And you’ll probably hear us make announcements about that in due course. Once you enter into that particular sphere then availability becomes much more dynamic, much more available, which will open up more inventory for these purposes.
Goh hopes that all member airlines are participating in the online redemption scheme by the end of the year, with the dynamic pricing side coming on later.
The technical challenges are far easier to meet than the business requirements to enable such. Award booking rates are negotiated on a bilateral basis between the airlines, not as an alliance-wide rate. Smoothing the online booking flow requires that the members agree to rates and permit the ticketing of such without unnecessary obstructions. Such cooperation has not always proven easy to realize and Goh did not address that challenge in his comments nor in the follow-up discussion.
A new top tier??
For the day of travel benefits elite status is key. The current Star Alliance Gold Status top tier is sufficient, ensuring lounge access, priority boarding and other benefits. But is comes up short when measured against the top tier of the oneworld alliance, particularly on the lounge front. The alliance Board of Directors discussed that topic in its meeting this week according to Goh but is not yet ready to announce anything new. Still, “keep your eyes peeled” as a tease could hold some promise.
— Seth Miller (@WandrMe) June 3, 2018
As for what benefits might be part of that new tier, details are scarce. Scant few first class lounges exist across the network, for example, counter to oneworld‘s lounge network. Finding other services to add without removing them from the current Gold tier could prove a major challenge for the group.