The number of passengers travelling by air has increased drastically, and the customer today has multiple options for travelling by air. Retaining customers has thus become a challenge for airlines. Customer loyalty programs were hence introduced to not only retain customers, but attract new customers as well.
Alliance partners get into an agreement with loyalty programs on pricing rules to work out a common base in a Partner Loyalty unit, taking cognizance of the member accrual in different loyalty unit types and other transaction parameters. The partners then send the accrual transactions related to the business activity of loyalty program members. The Loyalty program calculates the member accruals in various loyalty unit types and accrues them to the respective member accounts.
Unavailability of flights from a particular airline to a particular sector encourages airlines to book tickets for the customer with any of its alliance partners, where the customer could redeem loyalty points of that airline. The partner then has to pay a commission for the same, after the ticket has been utilized by the customer.
Transacting with alliance partners becomes very difficult in the absence of any platform. The complex processes involved and keeping track of transactions cannot be handled manually. The process of redemption of the loyalty points with alliance partner, therefore needs to be automated.