Frequent Flyer Programs

From SmarterTravel

Frequent flyer programs (FFPs) are known by many names: loyalty programs, customer relationship management (CRM) programs, rebate programs, frequency programs, and so on.

Common to all such marketing schemes, whether in the travel industry or elsewhere, is a system of rewarding customers for repeat purchases.

In airline programs, members typically earn miles according to the distance of their purchased flights, plus miles for hotel stays, car rentals, and purchases at a wide range of other retailers and service providers that use airline miles to promote their businesses. When enough miles have been accumulated, they can be redeemed for free flights of other awards.

To provide extra incentive to airlines' most profitable customers -- typically business travelers who travel frequently, on expensive tickets -- most programs feature elite tiers which reward flyers with upgrades and other perks after flying 25,000 or more miles during a calendar year.

While airline programs get the most attention, hotels and car rental companies also operate frequent traveler programs, generally included under the "frequent flyer program" rubric as well.

1 History of Frequent Flyer Programs
- 1.1 Milestones
- 1.2 Frequent Flyer Programs Today
2 Popular Frequent Flyer Programs
3 Internal Links

History of Frequent Flyer Programs

American Airlines launched the first modern airline mileage program in May 1981. Before the program's first year was behind it, American had added Hertz and Hyatt as AAdvantage program partners, establishing a blueprint which has been emulated and expanded upon by other airlines.

Loyalty programs were not new. Before American's AAdvantage, Western Airlines' Travel Pass, for example, rewarded travelers with a $50 travel coupon after every five flights.

And outside the travel space, there were various frequent-buyer schemes, the best known and most fully developed of them being the S&H Green Stamps scheme, which awarded consumers with stamps that were collected in booklets and redeemed for merchandise. (In its time, S&H was printing three times as many stamps as the U.S. Post Office.)

A database-driven frequency program was an idea whose time had come.

Within six days of American's launch, United had its own program in the marketplace, Mileage Plus. The "Plus" was a jab at archrival American: United's program offered a 5,000-mile enrollment whereas AAdvantage offered none.

Before the year was out, TWA and Delta brought their own programs to market.

The game was on.

Milestones

Some selected milestones in the history of the programs:

January 1983 - Holiday Inn introduced the first frequent-stay program, Priority Club.

November 1983 - Marriott launched Honored Guest Awards, since changed to Marriott Rewards.

October 1985 - Diners Club launched Club Rewards, the first credit card program to reward consumers with airline miles.

March 1987 - National Rental Car introduced the first car-rental program, the Emerald Club.

May 1986 - American and Pan Am joined each other's programs, the first time competitive domestic airlines cooperated in each other's mileage programs.

November 1986 - Continental's TravelBank (now OnePass) was the first airline program to get its own co-branded credit card, a Gold MasterCard.

January 1987 - Westin launched its Premier program.

April 1987 - Holiday Inn Priority Club launched the first hotel affinity card.

May 1987 - Hilton rolled out the HHonors program.

June 1987 - American began offering a co-branded AAdvantage credit card, issued by Citibank.

June 1999 - American added mortgage lenders to the AAdvantage program, allowing members to earn miles for home loans for the first time.

October 2001 - Delta lowered the price for a domestic award to 15,000 miles to stimulate travel following 9/11. Other airlines followed.

December 2004 - JetBlue added its first and only TrueBlue program partner, an American Express co-branded credit card.

April 2006 - Delta introduced the Medallion Marketplace, allowing elite program members to redeem miles for non-travel awards, including merchandise, hotel stays, gift cards, etc.