Three airlines looking at blockchain-based rewards
16 Nov 2018 - by
This year saw a number of major airlines pushing their loyalty programmes towards a blockchain-based service.
Earlier this month, Lufthansa and SAP announced the winners of their Aviation Blockchain Challenge. A start-up company called Sweetbridge was the winner in the ‘Traveller Challenge’ category, with a statement from Lufthansa saying: “The start-up has created a blockchain-based financial marketplace where various financial and treasury transactions can take place – from factoring to short-term financing. With the help of Sweetbridge, companies can operationalize partially tied up capital and use it elsewhere.”
According to the statement, loyalty programmes may be a viable option for this. Simran Maini-Hoskins, head of communications at Sweetbridge, told TAM that the company had an incentive and rewards system built into its accounting protocol. “This rewards programme offers a unique ability to tokenise discounts of any kind (rebates, rewards, sales, coupons, incentives etc.).”
The value of this, according to Maini-Hoskins, is in what the company calls Sweetcoins, which can be transferred between parties in commerce. Sweetcoins can be valued using the nett present value of future discounts.
Maini-Hoskins added that tokenising a stream of future discounts in this way allowed what is typically considered to a liability into an asset. “A typical European airline will account for its loyalty programme as a circa €1 billion (R16bn) liability on its balance sheets,” Maini-Hoskins said. “Sweetcoin has the potential to flip this into a €1 billion asset. Whilst this is a bold claim, the tech is in place and the economics are sound.”
This year also saw Singapore Airlines’ frequent flyer programme, KrisFlyer, launch a blockchain-based digital wallet called KrisPay.
The platform allows members to convert their KrisFlyer miles into KrisPay miles instantly, which can then be used for spending at partner merchants across the country.
Back in May, the Cathay Pacific Group and its rewards programme, Asia Miles, in partnership with Accenture, launched a new blockchain-based platform and mobile application for a dining promotion in Hong Kong. The use of blockchain technology enabled members to have the miles they had earned credited to their accounts the next day, and provided a single-data source when managing account activity, meaning Asia Miles partners and members had almost immediate management of their rewards.
At the time, Asia Miles chief executive officer, Stephen SY Wong, said: “As Asia’s leading travel and lifestyle rewards programme, Asia Miles aims at improving members’ experience with blockchain technology through gamified miles earning and faster miles crediting.” With Peter Yen, a managing director at Accenture, adding: “Blockchain is helping industries across the globe to transform their workflows, making complicated business processes run more smoothly and efficiently, including enabling quick and seamless transaction settlements.