Cathay Pacific gets a helping hand as Asia Miles unveils no-expiry policy for air miles from 2020

12-Dec-2019 Intellasia | South China Morning Post | 6:02 AM Print This Post

Asia Miles, a Cathay Pacific-owned frequent flier programme, is amending its policy by removing the expiry date on air miles collected from next year in a move seen as helping the Hong Kong flag-carrier beat a slump in air travel.

Air miles accumulated from January 1 will no longer expire as long as its Asia Miles members keep their accounts active by earning or redeeming them at least once every 18 months, the company said. Miles earned before the new year will continue under the old system of expiring after three years if remain unused, it said.

The move could come as a boost for the Hong Kong flag-carrier after a series of measures to shore up its business, including to scrap end of the year bonuses and trim salary increases to save costs, and a cutback in flight capacity for 2020 to cope with falling demand for travel.

Since Augustus Tang Kin-wing took over as chief executive in August, Hong Kong’s economy has slipped into a technical recession and tourist arrivals have dwindled amid six months of anti-government protests. This prompted the carrier to downgrade its earnings outlook.

This quarter, the group lowered its full-year profit forecast, saying that the second half of 2019 would be “significantly below” that of its interim performance when it generated HK$1.35 billion of income. Analysts at Macquarie Research said it may lose 10 per cent of air passengers in the second half because of the unrest.

Cathay Pacific made a HK$2.34 million profit in 2018 to reverse two years of losses. Significant shortfall in advanced bookings in October festive holidays suggest potential full-year loss in 2019.

The Asia Miles programme allows its 12 million global members to earn miles through spending on certain credit cards, and booking and flying with one of its 26 partner airlines. They can be used to buy everything from flights to hotel stays and concert tickets.

The impending change is meant to give its members more control over managing their miles, Asia Miles said in an email to the Post, declining to say whether the decision is related to the troubles plaguing its parent.

“We value out customers’ loyalty and the more our members engage with us, the more awards and experiences we can provide,” it added. “This is the long-term ecosystem we are building to drive mutual benefit to all parties.”

The tweaks in the frequent flier programme may help it retain customers and compete with rivals like UAE’s Etihad, whch last month adopted a no-expiry policy on air miles in its programme.

While the changes may lead to a slight dropout in non-frequent members, it should boost Cathay Pacific’s brand image and engage users wanting to save up points and drive ticket sales back to the airline host, according to Mark Ross-Smith, senior loyalty consultant at marketing firm New World Loyalty.

“It definitely will help Cathay, it will make people confident their miles are more secure,” said Ross-Smith, who was formerly head of loyalty for Malaysia Airlines. “You can rely on it, they’re not going away. “[It is about] building brand confidence, which Cathay probably needs a bit of.”


Category: Hong Kong

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