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VIP for a Fee : Airport Services Designed for High Value Customers

Board it like Beckham

“Let me tell you about the very rich. They are different from you and me,” is a timeless observation offered by F. Scott Fitzgerald in his story named The Rich Boy. Very frequent fliers earn their perks and program status by remaining vigorously loyal to specific airline brands. The wealthy can avoid all the mileage fuss and simply open their wallets for more pampering.

Rédigé par le Mardi 25 Février 2014

At the highest level of service and status, airlines will meet and greet passengers at the curb, provide private screening, and whisk them to planeside in a sedan car on the ramp.

This level of service normally eludes “you and me” but is now within the grasp of anyone with the swipe of a credit card. This report reviews how airlines all over the world now sell extra pampering to passengers for a profit.

Global celebrity and footballer David Beckham doesn’t fly like the rest of us. He may sit “up front” on the same flight, but he takes a very different path when he navigates the airport.

Mr. Beckham departs London Heathrow from the discreet Windsor Suite entrance at the southwest corner of Terminal 5.1 Once inside, he’s directed to a private lounge room where Her Majesty’s immigration agent quietly checks his passport.

He never touches his baggage until he arrives at his destination. When he wants to board the flight, he is screened without delay. Then it’s a quick sedan car trip on the ramp direct to the aircraft.

He hops up the stairs in view of a planeload of admiring fans and jealous passengers. You too can board it like Beckham if you are willing to part with a cool £1,500 ($2,477).

That’s what Heathrow Airport charges for its “Heathrow by Invitation” service for 1 to 6 guests. The service may be booked by any premium class passenger and is available for arrivals, departures, and flight transfers.(1)

VIP status was once only earned, now it’s also paid

“The Beckhams receive the Royal treatment” article dated 18 December 2010 in the Mirror.

David Beckham opts for a private-entrance lounge and sedan car transfer to flights when passing through London.
]iVIP status has traditionally been limited to persons of great influence or prestige.

The casino business had a significant impact on the definition as they designated high rollers as VIPs.

Within the industry these big spenders are known as “whales” and casinos will do practically anything to win their loyalty.

Suddenly being a VIP was not limited to celebrities, royalty, and prime ministers . . . all you had to do was spend a lot of money.

Airline managers were watching and thought the idea of VIP status could be applied to their top fliers. American Airlines introduced its first elite tier to its AAdvantage program in 1982. (2)

Members only had to accrue a modest 25,000 flight miles to receive gold status. The seed was thus planted and soon every major frequent flier program would apply an array of precious metals, rare jewels, and boardroom phrases as brand names to the services provided to VIP members.

The idea was a stunning success. Michael O’Leary, the CEO of Ryanair, believes consumers will “crawl naked over broken glass to get low fares.” (3)

It’s a pity he doesn’t believe in loyalty marketing, as experience shows elite members consider similar extremes in their pursuit of miles and points.

The carrier’s labyrinth of methods confuses many consumers

American’s elite members, representing less than 5 percent of program membership, contributed 26 percent of the carrier’s passenger revenue in 2008.(4)

VIP treatment, such as early boarding, bonus miles, fast track screening, and first class upgrades, has proven to produce the revenue payback eagerly desired by airline management.

Airlines now realize mileage alone is not the only method to measure the value of a customer. Elite status qualification can now include minimum requirements for flight segments and even airfare spending.

Delta Air Lines has established a complex set of hurdles involving miles, segments, and spending to qualify SkyMiles members for elite status. Kudos to Delta for emphasizing revenue, but the carrier’s labyrinth of methods confuses many consumers.

Look for more airlines to simply use pay-as-you-go, also known as a la carte, methods to also seduce more revenue from those willing to buy more perks.

This dual track approach relies upon traditional methods to reward elite status benefits to very frequent fliers. But it also allows consumers to buy the package of goodies once reserved for gold and platinum travelers.

It’s a mercenary approach born of tough economic times in the airline industry. The consumers most attracted to the second method include high value customers, called “HVCs” in the jargon of the industry.

These consumers don’t wait for freebies; they have the income or decision-making authority to buy what they want from a carrier’s premium service buffet. HVCs are not necessarily frequent travelers, but when they travel, they are willing to pay a higher price for the best service.

Some HVCs are simply designated as such by airline management with a note in the booking. More often, they represent big spenders who are catching the attention of airline management all over the world.

Download the PDF complete report in English see below.

2 “AA Technology Highlights” at the website reviewed February 2014.
3 “Low-fare airlines celebrate in high stylee.
4 2007 Investment Conference presentation by Dan Garton, EVP of Marketing on 8 March 2007.

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