Airlines Are Unlocking New Value In Their Frequent Flier Programs

February 26, 2015 by · Leave a Comment 

Reversing the direction of what we’ve seen recently in frequent flyer programs, Business Insider says that airlines are now finding value in their frequent flyer programs.

The recent trend has been for airlines to find ways to deny privileges to customers involved in frequent flyer programs (such as putting a stop to mileage runs). That trend probably isn’t going to change, but airlines are finding ways to monetize these programs in a way that, so far, doesn’t seem to be of much benefit to travelers themselves.

Multiple racks of servers

If you’re using Big Data, you need some Big Servers. (Photo credit: Wikipedia)

Getting on board the Big Data bandwagon, airlines have started harvesting and selling the data they’ve gathered about their frequent flyers. They’re selling this data to a variety of sources; Business Insider lists credit card providers, rental car companies, and hotels.

This data is so valuable, Air Berlin recently sold a stake in its frequent flyer program for more than what the entire Air Berlin corporation was valued at.

“It’s extremely powerful data, especially as it tends to be slanted towards the premium segment,” said Marc Allsop, senior vice president and head of global business development at Aimia.

In other words, frequent flyers tend to be very desirable customers. Anyone who travels enough to rack up that many miles tends to have money to spare, even when the person’s travel is on the company’s dime.

Plus, the information being harvested isn’t just related to facts about the person. It can potentially include details about recent trips a particular person has taken.

How do you feel about your frequent flyer information being harvested and sold to a third party? Leave us a comment to let us know if that sounds just fine to you or if you’d prefer to go back to the days when your data was just between you and your airline.

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