A Question Of Loyalty

Should airline lounges be a reward for revenue, or for loyalty?

- Alexander Freeman

Airlines used to mainly be in the business of getting passengers from A to B. And, of course, they still are. However, as part of running profitable and sustainable businesses in a highly competitive global market, the airlines have also become focused on something else: passenger loyalty, embodied in things such as frequent flyer schemes.

Many of us who travel frequently will agree that a key part of managing customers’ loyalty is managing their expectations. We customers are a demanding lot, particularly those of us who travel frequently as part of our work. No longer content with just getting to our destination, we expect the travel process to be seamless, well supported, comfortable and perhaps even a little bit special. We also expect to be recognised and rewarded, not just in the sky but on the ground as well.

Getting customer loyalty right is important for any airline that wants to attract and maintain those lucrative corporate and premium customers. In fact, most full service airlines rely on this higher yielding business to counter the poorer returns back in economy. Lounges are a crucial part of maintaining loyalty, both in terms of reward and recognition.

The lounge revolution started with the rise of the major airline alliances back in the 1990s. For most business travellers, a key benefit of holding a higher tier membership of Oneworld, Star Alliance and/or Skyteam is cross-airline lounge access, especially when travelling in economy where lounge access isn’t included in the fare.

To cope with constantly growing passenger volumes, fierce competition and customer expectations, airline lounges have slowly evolved from cosy spaces with armchairs, magazines and a coffee machine into vast spaces that rival good hotels, restaurants, bars or clubs in terms of their food, drink and service.