Mexicana Airlines launched a new loyalty program, MexicanaGo, on March 1, 2009. The program will not replace the current loyalty program, but will offer an alternative to the traditional Frecuenta FFP. We spoke with Santiago Ontanon, Director of MexicanaGo, about the new program.

InsideFlyer
What kind of feedback have you received so far from members?
Santiago Ontanon
The feedback so far is interesting. Obviously the biggest value of MexicanaGo is that you can trade your points for any seat available on the three airlines of Grupo Mexicana, Mexicana, MexicanaClick and MexicanaLink, which is a new airline. So that functionality, even though it has been available in other programs in other parts of the world, is new for the Mexican market so the reaction has been very interesting. Some people plainly love it. We’ve received feedback saying that is the best thing they’ve seen. Others are a little worried about the change of scheme. They are used to having tables, but there is no table. So what do you mean, they ask? You can get a ticket to Acapulco starting at 10,000 points but from there it depends on the market price of the flight. So it’s been a little difficult, but in general, I would say that 90 percent of the feedback has been very positive. I can say that the launch has been a success.

IF
Do Frecuenta members need to enroll in MexicanaGo or will members automatically be enrolled in the new program?
Ontanon
The two programs are independent. Frecuenta members can stay in Frecuenta for as long as they wish. If Frecuenta provides them with value and fulfills their needs they don’t have to switch. They won’t be migrated automatically. You basically have to make the decision yourself of joining MexicanaGo, and one of the benefits of making that decision now is that you can move all your Frecuenta miles into MexicanaGo points at an exchange rate of 1:1, which is not going to be the exchange rate in the future. In general, MexicanaGo points are more valuable than Frecuenta miles.

IF
How long are you going to continue the Frecuenta program?
Ontanon
It’s hard to say. For sure it’s going to continue operating for 2009 and 2010. I don’t know if it’s going to operate beyond that. If at some point we see that there is no value in having that traditional program, we will either start terminating it or start automatic migrations. We don’t have a plan yet for that. We think that MexicanaGo covers a need in the market that no one was filling. When we did market research in Mexico, people told us, “I get a lot of points but I can’t use them when I need to. I get points for flying on business that my company pays for but then I want to use them on vacation on the high season and I can never use them.” That is basically the number one concern for loyalty program members and I think we have addressed that very well.

IF
Can someone be a member of both programs?
Ontanon
Certainly, they can be a member of both programs. Actually, if you sign up for MexicanaGo and transfer your miles to points, you still keep your Frecuenta membership. There are two things that can happen. One, you start accumulating all your new activity on MexicanaGo, and again I would say 90 percent of the options that Frecuenta had are covered in MexicanaGo, plus others that Frecuenta does not have. such as British Airways and points.com. Of the partners that give Frecuenta miles, 90 percent of them are now giving MexicanaGo points and I expect it will be 100 percent in the coming months. There are still some partners that have not moved to MexicanaGo. You can keep your Frecuenta account for those activities and you can always transfer miles to MexicanaGo or to other various hotels programs, like Fiesta Rewards or Hilton HHonors.

IF
When do you expect Mexicana Airlines to become a full member of the oneworld alliance and what steps are necessary to complete the process?
Ontanon
Mexicana has been elected to oneworld and we are in the process of migration, which can take the rest of the year. We expect to be a full member by the end of the year. Today we are working on bilateral agreements with the 10 airlines of oneworld. We have bilateral agreements with seven and we are still working on the operational agreements with three of them and we expect to have that completed by this summer. After that there’s going to be a process of operational certification that we expect to pass and finish during the months of November and December. Our expectation is that by the end of the year we’ll be a full member of oneworld.

IF
Is the launch of MexicanaGo related at all to Mexicana’s joining of oneworld?
Ontanon
Not necessarily. Obviously we are leveraging on that to add to the value of MexicanaGo. Mexicana is one of the oldest airlines in the world and we have a very rich history. We created the Frecuenta program in the 1990s basically to mirror the competition. It was really never created by looking at the specific needs of the Mexicana traveler. Three years ago the company was privatized and the new group of investors started restructuring a lot of things–the cost structure, the fleet. When we started looking at the frequent flyer program, we saw that Frecuenta was in some ways outdated and not specifically designed for the Mexicana traveler. So we decided to go to a clean sheet of paper and start designing what would be the loyalty program for the future for Mexicana.

IF
How many members are currently in MexicanaGo?
Ontanon
What I can tell you is that up to now we have more than 50,000 members. Of those, we have more than 80 percent of the most valued members of Mexicana. MexicanaGo is measured more by value than volume. Our goal is to have about a quarter of a million members by the summer.