Air India launches “Reimagined” Flying Returns programme: Rewards cheaper; Status earning easier; Turns Revenue based

Over the night of April 2/3, Air India transitioned Flying Returns, its 30-year-old loyalty programme, into its new era. The airline loyalty programme, introduced in 1994 and last updated in 2012 on the occasion of the airline joining Star Alliance, has now played catch up and is a truly modern airline loyalty programme.

Air India transitions to a revenue-based programme.

AI’s FR programme was not the most rewarding programme back in the day. The airline had linked the earning of FR Points to a formula where the distance flown and the class of ticket booked (the specific revenue booking designator, such as E, W, F, A, Z, whatever) determined how many points you would earn. It was par for the course for the last decade, but airlines have moved to “revenue-based” rewards programmes, where the number of points earned is directly correlated to the money paid.

Club Vistara was the first revenue-based programme in India, and now Air India follows. Under the new programme, you earn a minimum of 6 FR Points/INR 100 spent for the base tier, with appropriate bonuses for the higher tiers of the airline.

Status tiers renamed.

In line with the airline’s focus on simplification, the long-form tiers such as “Silver Edge”, “Golden Edge”, and ” Maharaja Club” are gone. It is just red (base tier), silver, gold, and platinum, which are more in line with global status tiers.

On each of these tiers, you earn bonuses over and above the 6 FR points/INR 100 spent on Air India.

• Silver: 8 FR Points/INR 100 spent (+2 / +33%)
• Gold: 9 FR Points/INR 100 spent (+3 / +50%)
• Platinum: 10 FR Points/INR 100 spent (+4 / +66%)

Status Earning made MUCH easier.

Air India was the airline where only the government echelons had top-tier status until a couple of decades ago because there was no described way of earning the tier, which was subjective. At the time of entering the Star Alliance they had to finally figure this out, and they had a publicly announced tier system. However, the barriers to entry for the elite tiers were kept very high, I suspect intentionally, to keep the drain low on Air India’s card being flipped out internationally and AI being liable to pay for lounge usage to other Star Alliance carriers and so on.

In theory, if you booked your tickets six months out on the cheaper fare on a certain domestic route and flew round trip even 40 times or so a year, you won’t even have made Air India Silver Edge status. This is a high-frequency traveller who is truly loyal to the airline.

Under the new programme, tier-earning will be much easier. You will earn 6 FR Tier Points for every INR 100 spent.

The Tier Qualification Requirements have also been cut. On a rolling 365 days basis, now you need to earn the following FR Tier Points to qualify every year:

• Silver: 15,000 Tier Points (equivalent to INR 250,000 spent per annum; earlier requirement was 25,000 Tier Points)
• Gold: 30,000 Tier Points (equivalent to INR 500,000 spent per annum; the earlier requirement was 50,000 Tier Points)
• Platinum: 45,000 Tier Points (equivalent to INR 750,000 spent per annum; the earlier requirement was 75,000 Tier Points)

Not only that, but Air India has finally introduced a flight count metric. This means you still qualify if you are a frequent flier but do not spend enormous cash on the airline.

• Silver: 30 Flights
• Gold: 60 Flights
• Platinum: 90 Flights

The airline has also left the door open to earn the status via Star Alliance. On both metrics, Tier Points and Flight Count, Air India insists it only needs a minimum of 30% per annum on its own flights. Up to 70% of the qualification can be done by flying revenue on other Star Alliance carriers. As an aside, the earning of tier points on other airlines (credited to Air India FR) is still on the basis of the ticketed point mileage agreements between the two, so the old distance-based formula applies.

Points never expire

Earlier, AI would expire FR Points if you couldn’t use them within three years of earning them. Now, as long as you fly Air India once every two years, you can keep all your points alive, as they are extended by two years once you credit an Air India flight there. As someone who lost 110,000 FR points a few years ago, it makes me happy that points are evergreen now.

Introducing Cash + Points

Playing catch up, Air India has introduced a Cash + Points redemption option. This means even your small amount of points can be used for a discount, if not a full redemption of the ticket. At approximately INR 0.36 value per Point spent, the value is much better than Vistara’s Cash + Points offering, which offers an approximately INR 0.25 value per CV point spent.

Priority Services launched for elites

Many priority services are being added for elites going forward (effective immediately):

• Priority Contact Centre: A priority member contact centre for Silver, Gold, and Platinum members will reduce the wait time for these customers to reach the airline and allow them to access better-trained agents. Having this facility for even Silver Tier members is hugely generous.
• Free/discounted Ticket Changes
  • Gold gets 1 change free for domestic itineraries up to 24 hours before flying, and Platinum gets 2 changes free up to 24 hours before flying. Silver gets a discounted change fee of INR 1,180, including GST.
  • For international itineraries, Gold gets 1 change free up to 72 hours before flying, and Platinum gets 2 changes free up to 24 hours before flying.
  • These are only applicable for tickets directly booked with Air India
• Free/discounted Ticket Cancellations: For domestic itineraries, Platinum members will get free cancellations up to 24 hours before the flight. For Gold members, the cancellation is for an INR 1,199 flat fee, compared to the INR 2-3K+GST (It was free earlier).
• Complimentary Seat Selection: The airline’s elite passengers will now have complimentary seat selection (which is itself now a major reason to become a status holder). Gold members will get free seat assignments on most seats, and Platinum members will get free seat assignments on all seats, including the expensive ones such as Front Row and Emergency Exit.
• Fly Early: Air India will henceforth offer its Gold and Platinum tier passengers the option to move to an earlier flight (within 4 hours of their originally booked flight) if they so desire. This can be done only at the airport for domestic flights.

Booking Direct earns 2 FR Points/INR 100

To encourage people to book via the Air India app and website, Air India is offering 2 points/INR 100 spent as a bonus for booking directly with the airline rather than using an OTA. Unlike Vistara and previously Jet Airways, which had a fixed bonus for booking direct, Air India has made this variable, which means the more expensive the ticket, the more bonus points you earn (uncapped).

Redemptions made cheaper on economy.

Air India has borrowed a leaf from other carriers, including Vistara, to offer cheaper economy redemptions and more expensive business class redemptions, with Premium Economy coming through as well. But the airline will now offer many more seats for redemption, available on the plane up to the last economy seat.

On Mumbai – Delhi and v.v., for instance, earlier, AI FR used to ask for 10080 FR Points for a one-way Economy Class ticket. Now, Air India will offer these tickets at three points:

• 5000 points (Value) (bookable more than 3 months out of travel date)
• 7500 points (Value) (bookable over 1 week out of travel, up to 3 months out)
• 9500 points (Prime) (bookable within 1 week of travel)

Internationally, there are cuts in terms of economy redemptions on various sectors; for instance, DEL-JFK now starts at 61,500 FR Points on AI Metal compared to 80,010 points in the earlier programme. DEL-FRA moves from 45,000 points for economy to 30,000 FR points at the lowest. There is no pattern here in terms of a uniform number of cuts applied to the redemption requirements.

However, for business class, it seems the high requirements continue. On BOM-DEL, a business class ticket has moved from 20,000 points to 23,000 points. The requirements are also higher than the earlier AI programme for international travel.

My Take

Air India had the tough task of modernising the programme, ironing out some glaring inefficiencies of the past, preparing for the programme to be merged with Vistara’s programme in the future, and keeping customers happy. And I think they did a fantastic job there, walking the tightrope and coming up with an implementation that made it very lucrative to start using Flying Returns again. I already headed their way after privatisation and now have the prized Gold tier, which gets me lounge access and other perks, and I hope to use it now to move to Platinum in the future.

On the redemptions, Air India has done a fab job with the economy redemptions getting cheaper and open till the last seat on the plane in Economy. You have to pay more for Business Class and Premium Economy, which are the aspirational redemptions.

Bottomline

Air India’s new version of Flying Returns is here, and it finally brings the programme to par with the current century. The airline has added heaps of features to the programme, making it more generous and cheaper to redeem in most cases. A lot of perks will ensure that people want to finally go for their tier system and status, and last but not least, the writing on the wall, which is a revenue-based earning programme for Air India.

I’ll be doing a deeper dive and more analysis over time, but this is just a first cut of what has changed. Is there anything I missed? What do you think of the Air India Flying Returns “Reimagined”?  

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