LATAM Brazil CEO States that Miles Transfer is Destroying Loyalty Programs
The CEO of LATAM Brazil once again criticized the sale of miles in the parallel market, which has become a lucrative business in the country.
Mileage accrual programs are a way to build loyalty among airline customers, who in theory prefer to fly with a single airline to accumulate benefits that can be redeemed for future airline tickets or other rewards. However, the market ended up going in a different direction.
The issue is that in Brazil miles are transferable at the time of ticket purchase, which allowed the creation of a parallel market that today is dominated by large companies, but also by people who sell mileage sales courses (the so-called milheiros), and there are those who use miles as an alternative source of income.
As reported by our partner AEROIN, this whole movement has been the object of recurring criticism from airline executives. One of the most vocal is LATAM Brazil CEO Jerome Cadier, who again criticized this trade which, according to him, harms companies in the sector.
«This activity destroys the long-term loyalty program. If at any time you can sell or buy miles, it kills loyalty,» the executive said at the Panrotas Forum noting that, in part, this is the fault of the companies, which can still strengthen their programs. In the case of LATAM, for example, he says that the company has reinforced the system to avoid fraud with account suspensions and limitations on transfers.
Azul’s president, Abih Shah, followed the same line stating that «this only exists in Brazil and is negative for the customer», also pointing out that Azul is reinforcing its program with the limitation of transfers. Overall this may put an end to the resale of miles and, as it is a benefit of the companies for the customers, it ends up not having specific regulation.
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