Aeroplan paved the way for independently operating FFPs when it spun off its frequent flyer program in 2002. And while many airlines have discussed making similar moves, most have not followed suit. TAM has established Multiplus Fidelidade as a coalition program that is independent of the airline but the airline continues to run the TAM Fidelidade loyalty program. Now, both Jet Airways and GOL may be spinning off their frequent flyer programs. Reuters reports that GOL’s loyalty program, Smiles, will be a separate business unit by the end of 2012 and that airline executives will decide whether to offer a Smiles IPO in April or May of 2013.
Loylogic reports that Jet Airways may be gearing up to introduce an IPO for JetPrivilege. The airline has announced it will spin-off its in-house loyalty program into a separate marketing services business unit. Manish Dureja, Vice President, Marketing, Products and Merchandising at Jet Airways said, “The frequent flyer program started as a cost center but has started contributing positively. Given the focus on ancillary revenues and to strengthen the program, it is best to let it run independently.”
Bottom line: Just because GOL and Jet Airways are creating separate business units for their FFPs doesn’t automatically mean they will spin them off completely. But they might, and will soon be in a better position to do so.