Last month Porter Air indicated it was converting to a revenue-based loyalty scheme for its VIPorter program but did not have much in the way of details. This week the change was unveiled and, well, it is definitely revenue-based. Here’s a first look at the numbers.
Earn Rates
Earning starts at a simple 5 points/dollar rate for all passengers. There is also a kicker earning rate for the two new elite tiers in the program. The “Passport” tier (reached at $1500 in annual spend) earns at 6 points/dollar and the “Priority” tier (reached at $3000 annual spend) earns at 7 points/dollar. Those tiers are relatively easy to accomplish, even for a pure leisure traveler, though it is important to note that they exclude all taxes from the calculations and, especially in Canada, taxes & fees are a big part of what a customer pays.
Burn Rates
On the redemption side things become particularly interesting. There are three ways to buy tickets now:
- All Cash
- Points + Tax
- Dollars + Points
The Points + Tax option is what has been traditionally known as an award ticket; Porter does a very good job of calling out that there is a tax component and on the search results screen the fee portion is readily apparent. I like that. And, for each of the three fare types offered, the taxes are the same so on a Points + Tax search the cash component is consistent while the number of points required varies.
The Dollars + Points option offers awards for a bit more cash and a lower number of points. Unlike the Points + Tax option the cash component varies, while the number of points required for Dollars+ Points is half of the Points + Tax in all my searches. The cash component of the Dollars + Points rates varies significantly. I see it as low as 15% of the base fare and as high as 60%+ of the base fare ($48 is the lowest I saw while $293 is the highest), with no discernible pattern I can uncover. I also found scenarios where the same cash fare on the same route on the same day had different points costs; the numbers are not fixed.
Read more: Porter Air Joins the Revenue-Based Loyalty Revolution
The value of a VIPorter point also varies significantly within the sample of redemption options I scanned and, again, with little to suggest there is a pattern to the numbers. The least expensive award I see in terms of total points required is 3000 while the most expensive is 32,500. I will not be surprised if someone else finds one more expensive; I will be a bit surprised if something less expensive crops up. The best cents/point value I found was 4.1 cents/VIPorter point; the worst was 0.5 cents/point. In both cases that was on a trip where the cheapest of the three fare families was available and also on a Dollars + Points reward.
Total Value
The average point value I saw for Points + Tax awards is 1.34 cents; the average for Dollars + Points is 1.52 cents. With an typical earn rate of 5 points/dollar this ends up somewhere around a 7.5% return on the program, but that also assumes earn on the total value of spend. As previously noted taxes are not included and they can easily exceed 20% of the total fare paid. Backing that out suggests that the program is closer to a 5-6% return overall on travel spend, with incremental improvements for those who spend more over the course of a year.
What is perhaps the most interesting about the new program is that it is likely a downgrade for those buying the higher fares. Under the old VIPorter scheme they could see a return as high as 20% for buying full fare and redeeming on cheap seats. The new program drops inventory restrictions but also puts those customers at a return below 10%. Conversely, the low end customer in the past would be earning around a 5% return and, with the new program, might see that tick up a tiny bit.
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I think it will actually be hard for leisure travellers to reach the $1500 threshold, given Porter’s frequent sales. As you say, taxes and fees make up a big chunk of Canadian airfares. I was a bit surprised myself when I logged in expecting $1500 to be doable and found that year to date I’m only at $660 after 11 one way trips.