Partnering with IAG Loyalty to adopt Avios will bring new opportunities for existing and new Finnair Plus members to collect and use the programme’s new loyalty currency.
They join a leading global network of airline partners, including British Airways, Iberia, Aer Lingus, Vueling, and Qatar Airways.
Finnair will also increase the number of award seats – the most popular award among members - and guarantee at least 4 award seats on Finnair flights within Europe and 8 on Finnair long-haul flights.
Avios is the loyalty currency used by Finnair’s oneworld partners’ loyalty programmes – British Airways Executive Club, Qatar Airways Privilege Club, and Iberia Plus.
And as an extra incentive to join the Finnair Plus programme, its members will now also receive complimentary internet access for messaging as a new benefit on Finnair’s short-haul European flights operated with the narrow-body Airbus fleet, regardless of their tier status.
Ole Orvér, Finnair’s Chief Commercial Officer, said: “2024 marks the start of a new era with our loyalty programme, with new benefits and improved options for our members to use their earned Avios - both within Finnair and IAG Loyalty’s partner network.“
“The move to a spend-based program rewards customers directly for their spend, just like many retail loyalty programmes do. These moves allow us to leverage the full potential of our loyalty program and make it attractive to a wider audience.”
The Finnair Plus loyalty program will become spend-based, rather than driven by the number of flights flown by its members.
The strengthening of the Avios programme coincides with similar moves for the oneworld alliance. One of the key advantages of the oneworld alliance is the loyalty programmes offered to frequent flyers. Passengers who are part of any oneworld member’s frequent flyer programme can enjoy numerous benefits across the alliance’s network.
These benefits include earning and redeeming points or miles on any oneworld airline, priority check-in and boarding, access to premium airport lounges, and baggage privileges. For example, a frequent flyer with American Airlines can earn miles on a flight with British Airways and later redeem those miles for a flight on Qatar Airways, or Royal Jordanian. This level of flexibility and reciprocal benefits make oneworld a highly appealing choice for frequent travellers. Airline alliances are playing a crucial role in keeping the concept of a hub and spoke model thriving in the aviation industry.
By forming strategic partnerships, airlines within an alliance are essentially pooling their networks, and flight schedules to ensure seamless connections to numerous destinations. The hub concept, tied with a strong alliance presence, is essentially allowing airlines to expand their reach beyond their individual hub cities, offering passengers a wide array of connecting flights across the alliance's network.
Airlines also make money by selling frequent-flyer points to banks, which then award them to credit card holders as rewards for purchases such as at hotels and restaurants or for groceries.
Airlines are paid around 1 to 1.5 cents per mile by the banks, plus a bonus when new customers sign up for their branded credit card.
Banks collect the annual fees but take most of their cut in the form of "swipe fees" when customers use the cards for purchases.
The more consumers spend, the more miles they earn for free vacations, upgrades and other perks, incentivising them to use the airline's credit card.
American Airlines was the first to launch a loyalty programme among the big carriers in 1981, quickly followed by Delta and United. Initially, American's membership was by invitation only. Today it has 115mn members, closely followed by United — 100mn-plus — and Delta, 92mn.
Loyalty programmes — especially branded credit cards — have become increasingly lucrative to airlines.
Delta has said its long-term deal with American Express is expected to bring in as much as $7bn annually by 2023.
The author is an aviation analyst. Twitter handle: @AlexInAir