How Blockchain Can Be Used To Replace Airline Bonus Miles Schemes

Over the past 10 years, the growth of the airline industry has struggled. Global oil prices have plummeted 50% since 2014, and the rising number of budget airlines entering the market has intensified competition, making flying more affordable for customers.

As a result, the once-high-flying sector has shrunk and demand for airline loyalty programmes has dwindled.

The notion of retaining customers through offering them benefits is a time-tested proven concept, so it’s no wonder that air travel loyalty schemes became a commodity in post-capitalist society — with Frequent Flyer Programmes (FFPs) growing tremendously since the first initiative was launched by American Airlines 30 years ago.

Mileage Based FFPs

Typically, FFPs have been mileage based, with consumers accruing miles as they fly and redeeming them for tickets on other flights with that airline. Subsequently, this method lends itself to a tier system; the more miles you earn, the higher your flyer status becomes, and the more you spend on flights, the more benefits you gain. The main premise is to entice customers with perks from the beginning of their experience, to encourage and drive repeat sales.

Virgin Airlines’ Flying Club is just one of the many airlines using a mileage-based system to reward loyal customers. When you fly with Virgin, you earn ‘Tier Points’ as well as redeemable miles. Once you collect enough tier points, you will first attain silver status, and then gold status. These elite status levels offer a range of benefits like Priority Check-in, bonus FC Miles, and lounge access.

Time for change?

But, could demand for mileage based FFPs be slowly diminishing? Recent research conducted by industry experts Inside Flyer suggests so, revealing that 80% of frequent flyer members never actually earn enough miles to redeem a flight, as well as some 9.7 trillion frequent flier miles going unredeemed every year.

Along with this, there’s many strict guidelines allied to booking flights with miles. During peak travel seasons, customers with mile redemptions may not be able to book a seat on high demand flights, as airlines unapologetically favour income over loyalty.

Furthermore, there are a number of fees for booking and transferring miles, meaning customers are paying more than what they bargained for. Also, the benefits associated with the lowest tiers are no longer unique to the regular consumer, as many credit card companies offer similar discounts with car rentals and hotels. All of these factors make the tier system less attractive to average flyers who want a hassle free, personalized flying experience.

This notion is confirmed through Deloitte’s customer survey, which uncovered that traditional airline loyalty programmes fail to engage users, as well as highlighting that passengers plan and book in different ways. This individualism is something that mileage-based FFPs fail to adhere to, as they only reward the high value customers. So, is it time airlines implemented a more contemporary approach to customer loyalty?

Introducing BitRewards

At BitRewards, we encapsulate the modern shift this sector requires. Due to the proliferation of new media, a new avenue for business to consumer interaction has emerged, and with it comes unparalleled opportunity.

Through utilizing omnichannel marketing, our technology GIFTD can provide synergy across brands, formats and devices, enhancing the user experience for consumers and emphasizing the personalized needs of individual passengers.

With refined data collection techniques, BitRewards creates comprehensive and personal customer profiles, adhering marketing strategies to that individual’s preferences. This lends itself to predictive analytics, an AI technique used to target niche markets and predict future behaviours to drive future sales.

Not only does this boost revenue by an average of 17%, but it represents your brand in an attentive light, which is highly advantageous considering that 78% of customers only buy from brands that demonstrate care and understanding (Wunderman). Through prioritising the consumer’s needs as opposed to their wallets, BitRewards promises to generate a positive reputation and increase conversion rates for your business.

Social Loyalty

With mileage-based FFPs, the focus is solely on rewarding high spending customers — disregarding those who share their positive experiences with the brand via public platforms i.e. social media. Research from Unmetric shows most frequent flyers have a very high level of consumption of social media, with Facebook and Twitter being leveraged the most by travel brands and customers alike — substantiated by the visual below.

Clearly, social networking has a big part to play in airline loyalty, which current reward schemes aren’t recognising. With BitReward’s Referral tool, airlines can reward high value customers as well as brand advocates efficiently and succinctly. Using a link-building system, the referral tool sparks social media conversations, subsequently growing business recommendations and increasing repeat sales by 20%.

Post-purchase, a special widget will appear which allows consumers to publish a gift card on social media. In doing so, they receive a discount/promo code which can be redeemed immediately or in the future. When a friend clicks the gift card link, they are directed to the brand’s site and receive a pre-applied discount, catalysing a domino effect of sales.

Enhance Usability and Develop Partnerships

With this one-click, instant gratification approach, third party partnering sites and subsequent complications are eradicated, improving the user experience massively.

Because of the intense competition, pairing up with other brands may provide companies with more leeway to flourish in the airline sector. The co-operation between brands helps to extend the reach for both parties — diversifying target markets and developing connections to potential new customers.

Because cryptocurrency is stored in a single wallet, there is no need for users to register with several different loyalty programmes as the acquired tokens can be redeemed with any other brands within the blockchain. This facilitates partnerships, encouraging travel brands to combine their acumen and improve conversion rates.

As a result, airline companies can increase their influence, drive sales and retain customers with ease. There’s no doubt that both consumer and business experience will be altered for the better with BitRewards.


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