Last week, two announcements were made in Argentina"™s Official Gazette by Aerolíneas Argentinas, as required by law. The Argentine flag carrier issued a technical document that listed the problems and challenges with its loyalty program, Arplus, identified as a challenge that could not be solved by any local consulting firm. The second announcement was the opening of a bid for external and foreign consulting candidates which can overhaul the program in its entirety.
The stated requisite is clear: "It is paramount that the potential candidate has experience in similar processes, to assure that the contract will result in an accurate diagnostic of the program in comparison with the most successful loyalty programs around the world and in an extensive and comprehensive action plan, in line with the industry standards," as was published in the Gazette.
As a state-owned company, Aerolíneas Argentinas needs to fulfill a few extra steps when it comes to hiring vendors and service providers, as transparency is mandated by law. For instance, the complexity of the task at hand has ruled out any local consulting firm, as there is no Argentinian company with experience in the field. Once local firms were ruled out, the airline could proceed to seek help outside the country"™s borders.
An internal audit was blunt but honest, qualifying the program as "immature and belated," and stating that while the average revenue for frequent flyer mileage trade is $10,800 per year per passenger, Arplus is making $2,800 per year per passenger.
The problems identified were also clear, outdated technology is not allowing dynamic redemption, nor the combination of redeemable alternatives. Also, the lack of non-airfare redeemable items limit the possibilities for passengers to obtain middle term perks, before their miles expire. All this has a direct consequence, the program is not appealing for any banking institution in Argentina for a potential partnership…
