What is a Loyalty Program?

I talk about earning miles. Miles come from loyalty programs.

Loyalty Program Introduction

Loyalty programs are run by airline, hotels, car companies, and even your local supermarket. The focus is on airline and hotel programs, which are respectively called frequent flyer and frequent guest programs. If you don’t know what this term means, check out the wikipedia article on it. Surprisingly, it has a fairly succinct summary:

A frequent-flyer program (FFP) is a loyalty program offered by many airlines. Typically, airline customers enrolled in the program accumulate frequent-flyer miles (kilometers, points, segments) corresponding to the distance flown on that airline or its partners. There are other ways to accumulate miles: In recent years, more miles were awarded for using co-branded credit and debit cards than for air travel. Acquired miles can be redeemed for air travel, other goods or services, or for increased benefits, such as travel class upgrades, airport lounge access, or priority bookings.

Now that you have a basic grasp of what a FFP is, let’s talk about why I blog about them.

I like to leverage these programs, which is a fairly forward thought process if you wrap your head around the idea. Let’s take a program which I hope you’re familiar with. For example if you live in Canada, you should have at least heard of Aeroplan, which is the de-facto loyalty program of Air Canada. You can earn Aeroplan points such as with a credit card, by flying with Air Canada or their Star Alliance partners, through online shopping, and many other ways. Let’s assume you have a sizeable amount of miles from doing that.

You can now redeem them!

Loyalty Program Redemptions

There are tons of options. You could get an American Express gift card, which is essentially like cash.

AMEX GC Loyalty Program Redemption

AMEX GC

That’d cost you around 34k points for a $250 value.

But, you could also redeem for a economy class flight award, which would be 25,000 miles. Could you get more than $250 value from a round-trip flight within North America? 99% of the time, yes.

But are there even more valuable redemptions? What about business class to Europe? That’ll be 90,000 points, for a ticket that’s worth over 3900 dollars.

Business Class to Europe Loyalty Program Redemption

Business Class to Europe

That’s just a simple round-trip. What if I told you, you could use the same amount of miles, do 2 or more cities in Europe, and have 23 hour stopovers in Montreal and Zurich, all in business class? That’s an incredible deal which is as close to jetsetting as it gets.

Now, you ask, would you pay three thousand dollars for a business class ticket? I personally wouldn’t and I don’t think I ever will. But the fact that I paid roughly $200 and 90,000 miles makes it very easy to stomach financially than large amounts of cash out of your pocket.

Endless Posibilities

That’s just one of the very many possibilities available with a loyalty program. And this is just flights to Europe. There are so many other opportunities out there which miles unlock because there’s no way I’d ever pay $8000 for a first class ticket or $1000 for a hotel suite per night.

International First Class, in my opinion, is really the pinnacle of travel. Outside of the miles and points world, it’s something that’s only accessible to the 1%, and it’s a spectacular experience. Imagine seats that convert into a full flat bed. Or planes where you get a seat AND an bed. Or planes where you have private suites with doors to ensure a more quiet environment.

Yes, that is on a plane.

Yes, this is on a plane.

If you have always yearned to travel to exotic destinations and travelling in luxury sounds good to you, let’s talk about how to the other facet of this game, earning miles for a low cost. Or if you want to get into the nitty gritty, let’s talk about the specific airline programmes that are useful.

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