Since past few weeks, I was working on the various Airline Loyalty Programs to find out and gain more insight on how they work. Although these programs already exist in India, but after interacting with many of the fellow travelers on the way, I realized they knew little or nothing about how an Airline Loyalty Program works. In Western Countries, both leisure and business travelers have been often using one or more loyalty programs, even those with their day jobs.
Keeping this in mind, I have introduced a new series of posts where I will regularly update the readers about how the various Airline Loyalty Programs work, and how one can gradually build upon a ‘Travel Portfolio’, for his long-term travel needs.
#1. Why do you need the Airline Loyalty Programs at all?
You may definitely have this question- Why do you need an Airline Loyalty Program at all? How does it matter to you even if you do not have one? So here are few points to ponder upon about your regular travel needs:-
- How often do you end up with a confirmed train reservation?
- How many times do you need to drop your travel plans just because of a last-minute non-confirmed train ticket?
- What if you have to travel anyhow, despite unconfirmed ticket reservation, since you face an emergent situation?
- What happens when you end up spending your valuable money that you saved to attend an emergency, on expensive last-minute flight tickets?
- What if your job keeps you on a spin making you travel from pillar to post?
- You often get limited time for your leisure travel and when you start planning, you realize your hands are always tight on a travel budget?
In India, traveling for leisure is almost a last priority for the most and on top of it, if that comes with an unrecoverable cost, the plans are sure to get dropped.
Every 4 prospects out of 5 that I speak to for their travel plans eventually drop it, either due to non-availability of train reservations, or highly priced airfares or even both.
The price gap between the option to skip train travel and choosing air travel is ‘huge’.
This is what causes most of the travelers to delay/postpone/cancel their travel plans altogether, no matter how important they are. With increasing time, the possibility of a confirmed train ticket will only get narrower, with more and more travelers competing for the limited number of available train seats. The flight fares will keep scaling higher, due to increased air-fuel charges over time.
If these are the things you have faced quite often and you have not considered the big picture yet, then it is time to reconsider how you should choose to travel over time. Think of ‘Travel as a long-term investment’ and not ‘One-time Expense’.
#2. How Does an Airline Loyalty Program come to the rescue?
The Airline Loyalty Programs allow you to accumulate points over time so that you can use them for your flight ticket purchases or allied travel services over time. This is where your investment comes into the picture.
Almost 75-80% of your travel expenses constitute airfare with NO SUBSEQUENT RETURNS ON THOSE EXPENSES.
The Airline Loyalty Program allows you to accumulate miles for your first air bookings so that the same can be used for later travel bookings over time. When compared to cash back programs, though your initial investment for first three to four bookings can be high, but gradually, you can capitalize that investment for your future travel needs, even emergency situations.
But that is not the only way here. With more and more interconnected online networks, and more handshakes between several online partners today, getting cash back for your air travel is almost a ‘piece of cake’. Today, you can earn cash backs for your travel on a cost as large as an iPhone and as small as your mobile recharge. The long-term potential to earn benefits far outweighs the disadvantages.
As an example, this is a rough list of the services from which you can earn cash backs for your travel.
- Car Bookings
- Bus Bookings
- Food and Beverages
- Books and Magazine Subscriptions
- International Mobile Recharge
- Review Writing
- Purchasing Miles @ Bulk Discount Rates
- Credit Cards
- Health and Wellness
- Tours and Excursions
- Finance Partners
- Online Wallets such as PayTm, Oxigen, Cashkaro, Payback etc.
When combined, this roughly sums up to more than 200 services put together and not used to your advantage. Imagine the potential you have been missing out this far.
#3. The Math Behind the Points
Think this way – if there was a method by which you could convert your investment on regular purchases such as groceries, mobile recharge, bus bookings, online shopping, festival shopping into cash backs, that you could use against your travel purchases, you could eventually accumulate enough for planning at least two holidays and two emergency travel requirements.
I understand it is far too easy to accept it that easily. So I decided to put some numbers in place to make you understand how you are benefiting out of your Loyalty Program. For this purpose, I have put together a short e-book for my readers as putting a complete set of calculations was getting beyond the scope of this post. You can download the e-book by clicking on the image link below. This e-book goes into little more detail about how the various Airline Loyalty Programs work, and how you can set up an account to measure your progress.
#4. What Does this mean for you?
So, simply by changing the way you have bought your essentials round the year, you can not only convert your non-recoverable cash into loyalty points, but also help yourself and your family plan a trip at the end of the year, and that too, without investing anything extra from your pocket.
In the next posts, I will also cover how to analyze your points, how to use them to maximize cost per mile from your mileage program. Here are the links to certain Airline and Hotel Programs to start with. Go ahead and try creating an account for yourself and check out how they work the best for you:-