Cathay overhauls loyalty programme
SINGAPORE: Hong Kong’s Cathay Pacific Airways has made the biggest overhaul to its loyalty programme in a decade, with airfares paid now playing a larger part in determining customer rewards, said the head of the business yesterday.
The move comes as Cathay is looking to increase revenue and cut costs as part of a three-year transformation programme designed to make it more efficient against aggressive competition from mainland Chinese rivals and Middle Eastern carriers.
Since 2015, there has been a broader shift in the airline industry towards basing awards on customer spending rather than the distance flown.
Carriers including American Airlines Group Inc, Germany’s Lufthansa Group and Australia’s Qantas Airways have already rejigged their loyalty programmes in this manner.
Chief executive officer Stephen Wong of Asia Miles, Cathay’s loyalty programme, said the new award chart was a hybrid involving the airfare type, travel class and distance rather than being solely dependent on revenue and was based on customer feedback and studying other airline, hotel and retail loyalty programmes.
“This is a balanced approach,” he said, adding that 80 per cent of tickets would earn more miles, with the remainder to destinations including Manila and San Francisco earning fewer.
Asia Miles had 10 million members, with most based in Hong Kong, mainland China, North America and Taiwan, a figure that had doubled over the last five years and was expected to continue to grow, said Wong.
Cathay’s 2017 annual report said Asia Miles achieved a rise in profit compared with 2016 due to gains in business volumes, but it did not disclose the actual result.
In the first three months of this year, Asia Miles members redeemed 20 per cent more points on flights and other items than the prior year, said Wong.
As part of the changes, Asia Miles said it planned to increase the number of award seats by 20 per cent or more.