Subscription products are a booming segment for the air travel industry. Sprinkle in a dash of Web3 and the airBaltic Planie NFT collection comes to life.
The program, first teased earlier this year, is now live. And with it, the smart contracts and passive earning that CEO Martin Gauss is keen to see transform the carrier’s loyalty program.
By providing additional benefits like frequent flyer points or certain vouchers, we provide an added value to collectors. It is the first step towards preparing our loyalty program for crypto tokenization in the future.– Martin Gauss, airBaltic CEO
The Planie collection consists of 10,000 NFTs minted on the Ethereum blockchain. Members of the airBaltic Club loyalty program can acquire them for $100 each.
Once linked to an account, simply holding the Planie will net a member 20 points per day. Moreover, passengers have the opportunity to earn a business class upgrade voucher after taking ten flights while holding a Planie.
Read more: A blockchain loyalty revolution, spearheaded by airBaltic
In an interview over the summer, Gauss was clear that the Planie program should deliver a reasonable return for consumers. “If you do nothing you will get at least three tickets over three years,” Gauss explained. “That’s a fair value. If you invest in that NFT you should at least get your money back.”
The math on that return is a bit fuzzy, but mostly seems to work. The airBaltic Club reward program offers fixed price awards starting at 4,000 points (200 days of holding a Planie) up to 16,000 points for the longest trips in economy class. For those looking to simply extract the $100 direct value back out (i.e. via gift cards for fares) it would take 833 days to hit the target. The flexible redemption options, including for ancillary products, also increases the value. For those who do fly the carrier regularly, the upgrade voucher might be a more compelling factor.
A big first step
Getting the loyalty integration launched is a big step for airBaltic, which handles the development fully internally. But it is also only the first step. Gauss sees this as part of a much larger pivot for the program.
The potential tokenomics of frequent flyer points give you a completely new way of looking at what you can do with points, making them exchangeable not only to Ether, but any other currency where a swap is possible.
If I give you when you fly or otherwise interact with us something with real value, not just a limited value to redeem with the airline, I think we get into a new territory of the frequent flyer program.
Not only could the points be traded out for other currencies, but Gauss foresees a scenario where entire accounts are traded on the open market. “You cannot move your frequent flyer card to someone else today. You could in the future do that if it is an NFT. This is not something we’re doing yet, but why not? You have a card. You have earned all of that. It has value. Why not? It is provocative.”
Read more: airBaltic boosts NFT loyalty play
Of course, the airline will only allow such transactions if it also benefits. Gauss sees options there as well. Most notably, he anticipates configuring the loyalty account NFTs to pay out royalties on each transaction. Yes, you could eventually sell your elite status to another customer. But airBaltic is going to take a cut, as will OpenSea for processing the transaction.
But why blockchain?
Very little of what is being proposed requires a blockchain to work. Subscription-based earning certainly does not. Nor does transferring an account to a new owner or charging fees to customers for the various activities. And blockchain-based transactions are, generally speaking, rather expensive today.
Gauss expects the costs will eventually drop sufficiently to make this pivot reasonable. And that myriad other back-office transactions will eventually be bundled into the blockchain world. Ultimately he sees a lower cost of operating the entire airline thanks to this shift. Details, however, remain rather fuzzy on that.
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