Indigo trying to emulate SpiceJet's SpiceClub?

The budget airline market can be brutally competitive. And nowhere more so than India, where the aviation market is one of the cheapest globally. So it comes as no surprise that Indigo - which is normally the leader in most things marketing and innovation in the Indian aviation space - had to follow SpiceJet's Spice Club, by offering relatively huge benefits for a pretty small price. Here's more on the yet-unnamed offering.

The deal works quite simply, like this: You pay Rs 99, and instantly get vouchers worth Rs 899. These vouchers are:

• 2x Rs 350 "booking" vouchers, redeemable against your next booking(s), and
• 1x Rs 100 "service" voucher and 1x Rs 99 "service" voucher, for use against other offerings.

However, and as always, there are specific usage terms.

• the vouchers are valid for 6 months only
• the booking vouchers can be used only against base fare
• the service vouchers can be used to purchase specific services (meals, seat selection, pre-paid excess baggage, Fast Forward, infant fee, lounge and unaccompanied minor charges)
• when using the either type of vouchers, your bookings will need to be at least 21 days out.

Users are tagged to their individual mobile numbers, and each mobile number can be used only once in a one-year period. The objective of this is clearly to avoid (if not eliminate) overuse by individual customers.

You can find the offer here, and the detailed T&Cs here (which deserve a read-through!).

Conclusion

As in the case of SpiceJet, the way this works is that the customer gets a sort of "wallet" with the airline, from which they need to spend / use the vouchers. In effect, each member of the program has an account, which makes it really easy for the airline to offer promotions and market services directly to the customer. This avoids intermediaries, thereby eliminating additional selling and marketing costs. 

The use of accounts also ends up creating a small pool of funds that the airline can use, without having to incur debt servicing costs. Even though this pool is likely to be small at first, it will eventually balloon into something more substantial, giving airlines a "line of credit" as it were, without associated costs. Of course, there's an initial cost of offering some benefits (somewhere between Rs 99 and Rs 899), but that's only a one-time expense for Indigo, to build some sort of loyalty and acquire a direct customer list.

The things that these budget airlines come up with!