After nearly two decades in the aviation industry, and as it prepares for the arrival of its first wide-body aircraft, IndiGo, India’s largest airline has finally launched a loyalty programme, IndiGo BluChip.

IndiGo had left a gap in its offerings compared to competitors, especially domestic rivals Air India and Vistara with robust loyalty programmes

For millions of fliers who have been taking IndiGo’s flights for the past 18 years, the move has not come soon enough. Frequent flyers with IndiGo have long awaited the introduction of a loyalty programme that would reward them.

Focussed on profitability through efficient operations, IndiGo had left a gap in its offerings compared to competitors, especially domestic rivals Air India and Vistara with robust loyalty programmes. The launch of IndiGo BluChip may prove to be a game-changer for the airline, finally giving its customers the opportunity to earn and redeem points. Those flying frequently with the airline are enthused by the launch of the loyalty programme.

The launch of IndiGo BluChip comes as part of a broader trend in the airline industry

“I have been flying with IndiGo for years because of their reliability and competitive prices, but I have always wished they had a loyalty programmes like other airlines. Now that BluChip is here, I am excited to start earning points and enjoying the benefits that come with it. It is a great addition to my travel experience,” Gaurav Chauhan, 29-year-old, freelance photographer from Ghaziabad in Uttar Pradesh tells India Outbound.

The launch of IndiGo BluChip comes as part of a broader trend in the airline industry, where loyalty programmes have evolved from simple rewards schemes into complex, multifaceted strategies for customer retention and revenue growth.

Origins of loyalty programmes

The concept of customer loyalty programmes has deep roots, dating back to 1793 when an American merchant began handing out copper coins or tokens to repeat customers, which could be redeemed for merchandise. This ‘Spend and Get’ model laid the foundation for modern loyalty programmes for businesses, including airlines.

As the idea evolved, merchants transitioned from using tokens to offering stamps in the late 19th century, which customers could collect and redeem for rewards. Retail brands like Betty Crocker expanded the concept further with box tops and coupons, creating the groundwork for the loyalty programmes we see today.

The airline industry took this concept to new heights with the introduction of frequent-flyer programmes (FFPs). In 1979, Texas International Airlines launched the first FFP, but it was the introduction of the AAdvantage programme by American Airlines in 1981 that truly revolutionised airline loyalty.

Leveraging advanced computer technology, the AAdvantage programme offered mileage-based rewards and exclusive benefits for frequent travellers, setting a new standard and prompting airlines worldwide to develop similar programmes. far beyond their original scope. What began as a simple way to reward frequent flyers with points for flights or upgrades has transformed into a complex ecosystem of benefits and partnerships. Today, airlines use loyalty programmes not just as a tool for customer retention but also as a strategic asset that drives significant revenue streams.

Luring loyalties

And now IndiGo has joined the game, saying that its move signals a new era as it seeks to enhance customer engagement and compete more effectively with other carriers that have well established loyalty programmes. It adds that it aims to provide much more than what other airlines offer to their frequent flyers.

“With the launch of IndiGo BluChip, we have transformed loyalty programmes from focusing solely on transactions to emphasising meaningful experiences. Our goal is to provide a seamless and rewarding journey that truly values each customer interaction. IndiGo BluChip stands out through its simplicity, transparency, and exceptional value, offering real-time accumulation and redemption of points with no expiration for active members. We are excited to offer a programme that combines straightforward earning processes with exclusive benefits and the ability to share rewards, ensuring long-term value and enhanced customer satisfaction,” a spokesperson of IndiGo tells India Outbound.

IndiGo BluChip integrates seamlessly with our direct channels, including our website and mobile app. This integration allows members to track their tier status, transactions, and enjoy personalised service in real time. A unique feature of our programme is the ability for members to nominate up to five individuals who can also redeem earned BluChips. This aspect adds a layer of generosity and community focus. By combining exclusive travel benefits with these unique features, IndiGo BluChip not only enhances customer satisfaction but also sets itself apart from competitors by delivering substantial, long-term value,” the spokesperson adds.

Air India has a thriving loyalty programme, by far the largest in India

While IndiGo is now on the starting blocks of loyalty programmes, its largest rival, Air India, has a thriving loyalty programme, by far the largest in India.

Incidentally, in the weeks preceding IndiGo’s announcement of BluChip, Air India had significantly revamped its own loyalty programme, Flying Returns.

The programme is a prime example of how airlines are reimagining loyalty programmes to meet the needs of modern travellers. The revamped programme now offers a spend-based approach, where members earn points based on ticket spend rather than distance flown, providing better value for money, according to the airline. It also includes a range of partnerships with top brands, enhancing the benefits for members.

“Flying Returns has been benchmarked against the world’s leading loyalty programmes to create a globally competitive offering. The new programme allows members to earn or redeem points on 25 other Star Alliance partner airlines worldwide, offering access to over 1,000 lounges globally for those with the applicable Membership Tier levels,” a spokesperson of Air India tells India Outbound.

Air India says its Flying Returns programme continues to evolve by building partnerships that enhance the ways members can earn and redeem points. By collaborating with brands across various sectors, the programme ensures that members receive more value and flexibility, extending beyond traditional airline travel.

“Over the past 12 months, we have added over 50 partners to give Flying Returns members more ways to collect points beyond just flying. Members can now earn Flying Returns points at Madame Tussauds museums in Bangkok, Dubai, London, New York and Singapore, as well as Legoland theme parks in the United Kingdom, the United States and Asia. They can also earn points on luxury shopping at the Bicester Collection’s nine outlet villages across Europe or when booking holidays on over 40 cruise lines globally. Our partnerships with top hotels, car rental companies and banks facilitate seamless point’s conversion, offering even greater value,” she adds.

To enhance the customer experience, Air India says it has introduced several new features to its redesigned Flying Returns programme.

“We have made significant improvements to provide more flexibility and value to our members. Now, Flying Returns points never expire if members fly with us at least once every 24 months. There are no blackout dates for redeeming points and any available seat can be booked using points. We have also introduced a cash plus points option and a family pooling feature, allowing members to combine points with their family. For our Silver, Gold, and Platinum members, we have a dedicated service centre to handle inquiries and requests,” she adds.

A critical factor for flyers

Airline loyalty programmes have become a critical factor influencing travellers’ choices. A recent survey by OAG, a London-based travel data company, revealed that 73 pc of travellers prefer using their loyalty points for hotel accommodations, reflecting a growing trend of extending the value of these rewards beyond traditional flight redemptions.

While airline loyalty programmes provide significant benefits to both travellers and airlines, but it do not extend similar advantages to tour operators or travel agents

“As a frequent flyer of Air India, I have come to realise just how beneficial loyalty programmes can be, not just for flights but also for other aspects of my travel. These programmes have made a huge difference in how I plan and enjoy my trips. For instance, many of these loyalty programmes allow me to earn points that I can redeem for stays at partner hotels. This flexibility has not only saved me money but also made it easier to book accommodations that suit my preferences,” Nabeel Tawqvi, a 30-year-old architect from Dresden in Germany, tells India Outbound.

“I use my points not only for booking flights but also for other travel needs. For example, I often find myself in unfamiliar countries or cities where reliable transportation is crucial. I use my airline loyalty points to book rides with partner cab companies, which saves me from worrying about extra expenses.

This kind of flexibility and added value keeps me coming back to certain airlines and their loyalty programmes. They make my travels not just more affordable, but also more enjoyable and stress-free,” Taqvi adds.

While airline loyalty programmes provide significant benefits to both travellers and airlines, but it do not extend similar advantages to tour operators or travel agents. The rewards and flexibility offered by these programmes primarily serve the needs of travellers and airlines, leaving tour operators with limited direct benefits.

“These loyalty programmes mainly impact our business at the point of redemption, as customers must use the airline’s website to redeem points, which does not generate revenue for us. From my understanding, airlines focus on promoting loyalty programmes directly to customers. As tour operators or travel agent, we don’t typically benefit from these programmes, so partnerships between airlines and tour operators don’t enhance the value of loyalty programmes in our offerings,” Vinay Arora, Managing Director of Flag Travel Service, a travel firm in Delhi, tells India Outbound.

Airline loyalty programmes significantly influence our clients’ decisions when selecting airlines, largely due to the appealing rewards like free flights, upgrades, priority boarding, and lounge access. I have noticed that passengers particularly favour programme that offer flexibility in earning and redeeming points,” Arora adds.

Airline loyalty programme have become a crucial factor influencing traveller’s choices when booking tickets.

“As a businessman, I don’t usually stick to a specific airline, however, loyalty programmes do influence my decisions when booking flights. The benefits and rewards, like priority boarding, lounge access, or free upgrades, can make a big difference, especially on long trips. If an airline offers a loyalty programme with good benefits, I am more likely to choose them over others,” Faizan Fayaz, a 34-year-old businessman from Delhi tells India Outbound.

As airlines continue to innovate and expand their loyalty offerings, these programmes not only enhance customer satisfaction but also bolster financial performance, demonstrating their crucial role in sustaining and growing airline businesses in an increasingly competitive market.