Allegiant Air Set to Transform Loyalty Program for Customers

Allegiant Air is initiating a significant overhaul of its loyalty program, Allways Rewards, along with its co-branded credit card offerings. This strategic move aims to enhance customer engagement and create a more compelling loyalty experience. The airline recognizes that balancing simplicity with active customer involvement is crucial but challenging.

Currently, Allways Rewards members earn one point per dollar spent, redeemable at a value of $0.01 each for flight bookings. Notably, there are no elite status tiers within the program. Allegiant is now seeking to implement a more dynamic loyalty structure that goes beyond merely offering additional points for purchases. This shift aligns with broader industry trends, where loyalty programs increasingly contribute to airlines’ revenue generation.

Addressing Loyalty Challenges

The existing flat rewards structure of Allegiant Air’s loyalty system has faced criticism for disincentivizing passenger loyalty. With a basic 1% discount on travel, it does little to encourage significant changes in passenger behavior over time. Allegiant’s leadership has indicated a strong interest in enhancing the rewards program. Planned improvements may include basic status tiers, increased earnings through co-branded credit cards, bonuses for milestone achievements, and other incentives targeted at leisure travelers.

In a recent interview with The Points Guy, Drew Wells, Allegiant’s Chief Operating Officer, emphasized the need for a comprehensive review of loyalty offerings: “We need to take another look at our loyalty program and our cobranded program.”

Why Loyalty Matters

Allegiant Air’s business model focuses on providing flights to underserved city pairs, catering primarily to low-frequency, price-sensitive leisure travelers. The airline often stands as the dominant or sole carrier in many markets. Historically, this positioning has limited investment in loyalty programs. However, evolving market conditions are prompting Allegiant to reconsider its approach to customer loyalty.

By enhancing loyalty incentives, Allegiant can better defend against competition from emerging low-cost carriers like Breeze Airways and Avelo Airlines, which are beginning to encroach on Allegiant’s core markets. These changes are critical, especially as younger travelers increasingly seek affordable flight options.

The competitive landscape is shifting, and Allegiant recognizes the importance of capturing the attention of high-volume, price-sensitive travelers. This demographic has become vital to airlines looking to grow their market share.

Loyalty programs have evolved significantly over time. Initially, they resembled traditional loyalty schemes, providing free travel as a reward for continued patronage. Today, partnerships with credit card companies and the benefits of elite status have transformed these programs into valuable revenue-generating assets. For instance, the loyalty program of Delta Airlines generates over $7 billion annually through its partnership with American Express.

Allegiant Air’s push to revamp its loyalty program reflects a broader recognition of the need to adapt to changing market dynamics and consumer preferences. As the airline prepares for this transformation, it aims not only to enhance customer satisfaction but also to solidify its competitive position in an increasingly crowded marketplace.