3 Responses

  1. Carl
    Carl at |

    A spinoff of the loyalty program never ends up being good for the airline members of the program, and in the long run it isn’t good for the airline, either. That’s because the spinoff generally results in a conflict of interests between the airline and the loyalty program. When they are under joint ownership, both the airline and the loyalty program can make tradeoffs that benefit the other. That becomes difficult when they have separate ownership, and I think it ends up hurting the airline and hurting the members who travel a great deal.

    Short term gain for the airline, long term pain for the airline and members.

  2. Golfingboy
    Golfingboy at |

    I think spinning off those programs are not a good idea, but if an airline is on the brink of running out of cash and nobody is willing to lend them money. Spinning off loyalty programs will not resolve the issues the airlines are having or improve their balance sheets. They will get a boost in cash on hand, but revenue will shrink and lead to wider quarterly losses if they do not find ways to replace the revenue stream they are getting from Smiles.

    I think it is more appropriate for the airline to terminate leases on aircrafts and do some serious restructuring. The mistakes GOL is making is similar to Independence Air, expanding too rapidly and costs are getting out of control. They have only been flying for 11 years and their fleet is almost the size of TAM’s, which has been flying since 1976.

    Bottom line, spinning off the Smiles program will not help GOL one bit in the long run, it will just keep them afloat a little longer. AC is struggling pretty bad and I am sure they are missing the revenue stream they enjoyed when they had control of Aeroplan. It is pretty sad to see AC struggle despite being the only legacy style global carrier in their country [rest are LCC or charter airlines].

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