Azul Airlines (Brazil) - Global Innovations in Airline Loyalty (Ep #677)

Raffael: We are very happy because this product was finalist for two years in the International Loyalty Awards in 2023 in London and 2024 in Dubai. It’s a disruptive and innovative product which allows our members to redeem the airline ticket. Since the first day in the program, then without having the points or miles for it, you can pay for your trip up to 14 months ahead, and during this time, we’re helping the customer to accrue enough points to pay for that.

First of all, I want to emphasize that our program is for free,

Paula: okay?

Raffael: Paying for the subscription product is the option of the customer. This brought us the concept of reward first. Yeah, actually giving the customer the opportunity to try our services, to have the reward from the loyalty program even before being loyal.

Paula: This show is brought to you by Comarch, the global loyalty partner, trusted by enterprise brands in over 50 countries with more than 30 years of experience and 290 million loyalty members on board. Comarch knows what it takes to build real connections. That last. Their AI powered tools turn data into action and customers into super fans.

From fraud proof platforms to personalized journeys, Comarch helps you boost engagement, grow revenue, and make loyalty your competitive edge. Want to see how they do it? Head over to Comarch.com and discover loyalty that actually works. Hello, and welcome to today’s episode of Let’s Talk Loyalty and Loyalty tv.

It’s Paula Thomas here and I’m delighted to be today meeting in person with Raffael Fappiano Neto, the product manager for loyalty at Azul Airlines. Azul Airlines was founded in December, 2008, and it is now the largest airline in Brazil in terms of the number of flights and cities served with more than 150 domestic and international destinations In 2020, Azul won the award for the best airline in the world by TripAdvisors Traveler’s choice.

Raphael is responsible for airline products and loyalty projects at Azul Airlines since 2018, and he joins me today to share some highly innovative and even disruptive ideas such as the option for members to burn their miles before they even earn them. He also shares insights on their paid program, a subscription product, which includes an option to pay a monthly fee and potentially earn tier status even without flying frequently.

I. I hope you enjoy our conversation, and a huge thanks to Comarch for the introduction and the invitation to record together in Krakow. So Raphael from Azul Airlines, welcome to Let’s Talk Loyalty and Loyalty tv. Live in Krakow.

Raffael: Thank you. Thank you very much for me. It’s a pleasure to be here.

Paula: Fantastic. I know you finally got your baggage as well.

You had a little bit of trauma on the way.

Raffael: Yes. Finally. Everything’s fine now.

Paula: Amazing. Great. And we’re gonna have a fantastic couple of days here at CUG. Have you been to this event before?

Raffael: Yes.

Paula: Yes You have. Okay. Three times before. Oh my goodness. Okay. Fantastic. Well, I’m really looking forward my third time also for me, I suppose today.

I’m really keen to hear about, of course, your loyalty program. I confess, I’m not that familiar with Azul Airlines, so I also want to learn a little bit about the airline. But before we talk about anything to do with loyalty, as you know now, we always start our show talking about a book, and the idea is we want to understand you as a professional what books may be inspired you.

So kick us off and tell us then Raphael, what is your current favorite nonfiction book?

Raffael: All right. My favorite nonfiction book is Don’t Believe Everything You Feel. By Robert la Lehigh. This is my favorite book because it’s about self-awareness and self-control. The book help us to understand with which of our silos from our body should be really considered and which of then.

Could be discarded. For the sake of our wellbeing, self-control, anxiety management, and this book really helped me to understand more about my needs and feelings.

Paula: Okay. Wow. Sounds fascinating. And of course, for the audience, we’ll make sure to link to that in the show notes. Okay. If anybody wants to get it.

I will say that I’m somebody who practices a little meditation also, because I know the mind, the body, everything can feel very stressed sometimes. Yes. It’s I like the idea. We feel things, but we don’t have to believe everything we feel. Thank you for that. Amazing. So take us a little bit back, Raffael.

I know you’ve traveled a long way to be here today, but in terms of your professional background and the role that you do now, of course, as this incredible loyalty role with Azu, take us through your professional background in loyalty.

Raffael: All right. I have been working. For in loyal for a little over 15 years.

I started my career in 2010. In an insurance company. And it’s loyal program. It was a smaller program just to, to recognize the brokers based on the year sales. And then for years later, I moved it to the first airline I worked for. And I had a great opportunity to work in major projects, like change the entire role rules of the program and actually.

Change the business model of the program. And then six years ago I moved it to Azul, the airline I work for currently. And I started in Azul as as the responsible for the redemption performance. And with time and o over the time and with some experience, I added to my management some project areas.

And now I am senior product and project manager.

Of the loyalty program.

Paula: Indeed. And I know you are promoted yesterday. Yes. Congratulations.

Raffael: Thank you. Thank you very much.

Paula: Amazing achievement. It really is extraordinary, I suppose, to hear that you first of all have responsibility for the redemptions, that you had control of the business model.

You have the freedom to make the changes that the airline needs. Yes. So I think that’s an extraordinary job, obviously, that you’re doing. I also like that you’re doing something well, a lot that’s very disruptive, I think that other airlines perhaps have not done. So we’re gonna talk about some of those specific.

But before we even talk about those details as well, would you mind just for people who are listening or watching that don’t know Azul Airlines, would you mind just give us an introduction to the airline itself and then we’ll talk about the loyalty program?

Raffael: Okay. Azul is one of the top three airlines in Brazil.

Being the one with the largest number of destination 160. In, in domestic and international flights. And with huge growth in the previous years. And to meet this huge growth we need a solid loyalty program to keep up with the business needs. And also has also been recognized as the best airline in the world by TripAdvisor like.

Four or five years ago.

Paula: Wow.

Raffael: It was a great achievement. A big reason to be proud.

Paula: Yes. Yes. Amazing. Absolutely. And I remember you told me that it also translates to blue, so it’s a beautiful color. Yes. Similar to our friends in Comarch. So we’re all about the blue.

Raffael: Yeah. A zoo means blue.

Paula: Yeah. In

Raffael: Portuguese.

Yes. And actually this name was, it was selected by a popular vote in Brazil.

Paula: Okay. Yes. Okay.

Raffael: The customers had some possibilities to vote in the new name for the airline? Yeah. In the very beginning.

Paula: Yeah,

Raffael: like 17 years ago.

Paula: Okay. And

Raffael: the most voted by popular vote was Zoom.

Paula: Beautiful, and I can hear that’s a principle that’s very powerful for you still.

Yes. That you love to talk to your passengers and your members specifically in terms of what they need and what they want. Yes, and it’s a good principle for good business.

Raffael: Yes. It’s

Paula: amazing. So tell us about your loyalty program.

Raffael: Okay. Our loyalty program we are very happy and proud because we just reached at 18 million members.

And with more than 300 partners and multiple possibilities to accrue and redeem points. On our accrue possibilities. We have, of course, zoo Pro products and services. And all of our partners also accruing points in our loyalty program. I mean banks and retail stores. More than 300 partners and I. Among our redemption possibilities. We also have Azul tickets, flight tickets. Services and products like extra bags or seat selection. We have the possibility to redeem in all of our travel operator as well. I mean, hotels tours or the travel package.

We have also more than 30 airline partners. And you can redeem your points in more than 3000 destinations. Wow. Worldwide. Yes. Okay. Yeah. And. And of course we have all these possibilities to accrue and redeem points. But one of our focus is always on the customer experience.

To give to our members an exclusive and more comfortable experience during the journey with us.

Paula: Okay. And you explained that to me a little bit before, so I’d love if you would explain it for the audience back to the point about you listening a lot. To how needs are evolving. And I think you have a very customized approach now where the members themselves can specify what they need at a particular time for a particular journey.

Raffael: Yes. Actually, we don’t have it yet. Okay. We are getting there. Okay. We are studying the possibilities, okay. And we are trying to understand the best way to meet these feedbacks from our customer. Okay? The truth is that now. One thing doesn’t work for everyone.

Paula: Yeah.

Raffael: In the past, for example the preference for the checking

Was important to everyone. Now most of our passengers do the checking online. So we are changing. People are changing. Needs are changing. And the loyalty program needs to change as well. Yeah. We are trying to. Receive the feedback from our customer, what they expect from us. And we are understanding the way to meet this and give them the opportunity to say exactly what they want from the airline and personalize their journey.

Every single time, for example, for this trip, for my next trip, yeah. A free bag is more important than a free seat. But for the next one, maybe a free seat is more important than a vape lounge. Yeah. And so on.

Paula: Amazing. Yes. And I know you work with our friends in Comarch to deliver all of that personalization, so Yes.

Tell me a bit about that relationship.

Raffael: Yes. Comarch actually really help us in our craziness because we have a very very collaborative way of working. And this is the more, this is the value I most appreciate in our partnership. Because we are. Available to maximize the customization of the platform to meet all the business requirements and needs.

And of course, the customer requires the needs as well.

Paula: Okay. Amazing. So well done, Comarch. Yeah. Fantastic. And again, I suppose just the fact that you have flown all the way from Brazil to be here with the CUG event here is a testament to that partnership yes, of course. Just shows it’s working super well.

Amazing. Yeah. Great. Okay, so we’ve talked about the feedback and how you’re using that to evolve the future, the customer journey, and hopefully increase personalization. I will tell you that every single person who has been on our show is always saying personalization is never enough. We always want to do more.

So you’re absolutely not alone. There’s plenty done. Plenty more opportunities. But I do know that you have an existing proposition around allowing members to burn even before they earn Raphael. So that to me is mind glowing. Sounds very disruptive. So would you explain that to us, please?

Raffael: Yes. It’s a disruptive and innovative product which allows our members to redeem the airline ticket.

Since the first day in the program, even without having the points or miles for it.

Paula: Okay.

Raffael: And you can pay for your trip up to 14 months ahead. And during this time we were helping the customer to recruit enough points to pay for that. And this is this product, the concept of rewards first? Yeah. Actually giving the customer the opportunity to try our services.

Okay. To have the rewards from the loyalty program. Even before being loyal.

Paula: Wow.

Raffael: And we are very happy because this product was finalist for two years in the International Loyal Awards in 2023 in London and 2024 in Dubai. Amazing. And it has also been presented as a success case here in the com user group two years ago.

Paula: Amazing. Okay. Super. So they joined the program. And then is it an investment they make on an ongoing basis in terms of earning the miles, but they can book immediately upfront. How does it work technically or just Yes, practically.

Raffael: They can book immediately after enrollment, for example. Okay. And pay a small fee for the service.

Okay. And then you can pay for your trip in points or miles? Up to 14 months ahead. I mean, one month. Prior through to work. And during this time, we give you all the tips you wanted, all the help you need. To have the points. If you are good to pay.

Okay. That’s fine. If you don’t have points enough by the time of your trip, you can pay the total amount in cash.

Paula: Okay. Or

Raffael: you can cancel your trip. Okay.

Paula: And how’s it going?

Raffael: It’s fantastic actually. Okay. Giving to the customer a little try of our services and products before. Yeah.

Having, they are loyal, ah, is fundamental for their for they know Yes. What we can give it to them.

Paula: And I guess it builds their trust a lot as well, that you are going to deliver the rewards. Regardless, as long as they behave in the correct way over time. Yes. That you will recognize and reward them as they expect to.

Raffael: Yes, exactly. Actually, this product is available for everyone.

Paula: Okay. We

Raffael: are not looking for the level at this time because you can use this. Service since your first day in the after the enrollment. But of course we are helping the customer to ha to, to increase the level of relationship with the customer.

Paula: Yeah.

Raffael: And have each time more benefits and exclusive journeys.

Paula: Yes, absolutely. And you mentioned you have a lot of partners, Raffael as well. So obviously they don’t have to be just flying to earn the points. Yes. Like a lot of programs. What would you say are your top partners? I think I presume a co-brand.

Raffael: Yes. Any

Paula: others that you would call out that are very popular with your members?

Raffael: Yes. Very, another very popular loyalty program beyond our members is the leVello ones. Yeah, of course. And we are partners. Yes. They can transfer points from leVello to Azo loyalty program. Okay. And of course, our co-branded credit card.

The bank who owns our co-branded credit card is our biggest partner.

Paula: Okay. Yeah. I find that flexibility is also a principle that’s becoming incredibly important for members.

Raffael: Yes, of course. The flexibility. We are trying to offer poss flexibility in all of our possibilities. For example to.

To have your airline ticket before having point in a way of flexibility because usually you need time to earn points to have the total amount. Yeah. And when you have, by the time you have the total amount of points maybe it’s very close to your trip. Yeah. And maybe the prices are higher.

So giving you the opportunity to redeem in the very beginning. Yeah. It’s a way to give you flexibility to think a little bit more. Or you can also book the trip if you had, if you have seen a good opportunity. And then you go home, you talk to your family, you try to have vacations. Yes. And if you don’t, it just.

Don’t be and nothing happens.

Paula: Amazing. And what I love about that as well, I’m a real planner. Raffael, some of my family, they don’t like to plan until the last minute and book, but I want the cheapest price. I like looking forward to the trip. So I want to know how much is it gonna cost. What can I get? Is it available on a redemption?

So I think there are both types of people, of course, especially with 18 minute numbers. But you’re really satisfying the people like me who want to already start looking forward to my trip, even if it’s one and a half year away.

Raffael: Yes. And actually the flexibility also comes with our pool of benefits.

Okay. Because as a member, you have flexibility of changing or cancel, sell your trip anytime you want. And for the future it would be a great possibility to increase your. Your flexibility because you will be able to choose, for example, more flexibility than a free tee selection, for example.

If it works for you, if it makes most sense for you. You can choose more flexibility than other customer.

Paula: Amazing. Yeah. And you’ve reminded me as well, I did an interview with American Airlines who have over a hundred million members. I’m sure you know. And the key KPI that they were mentioning was called the speed to the first redemption.

Yes. So you are actually making that available on day one?

Raffael: Yes, on day one. It’s available on day one.

Paula: Amazing. Amazing. And I’m delighted to hear that you are nominated for those awards. We love the awards, huh?

Raffael: Yes. Yes.

Paula: Amazing. The other big innovation that you have, I know, is your subscriptions. Yes. So for a lot of people, obviously to have a paid loyalty program is a whole other.

Level of loyalty. Very few airlines I think still have managed to deliver something compelling. So would you mind just explaining what is it that your subscription program is offering? Yes. And even when did you launch it? I’m very curious as the history, when did you start and how’s it going?

Raffael: Okay. First of all, I want to emphasize that, that our loyalty program is for free.

Paula: Okay.

Raffael: Paying for the subscription product is. Is the option of the customer. Perfect. Right. And in our club we call it as club. Nice. You can pay a small a a monthly fee and receive points and benefits for that. For example, we have the club 1000. For the club 1000, you pay a smaller fee and receive every single month, 1000 points plus extra benefits. But we also have the club two. Five, 10 and 20,000. And the highest the highest clubs also gives the customer the direct entry to the, to our highest levels in the loyalty program.

So with the club, you also get the most benefits the airline can give you.

Paula: You mean the tier status? Yes. Okay.

Raffael: Yes, the hires club gives direct access to the tiers. Amazing tiers.

Paula: Okay. So even without flying, I could be a top tier member of the program? Yes. Okay. And what level of investment, like, I mean, I don’t know your currency, I’m afraid of a L, but just to give our audience a sense of what kind of monthly subscription fee would you be paying if that, if you wanted to take any of these levels.

So just

Raffael: Okay. I would try to convert it to dollar Yes. To make it easier. And for the Club one 1000 for example, which is our lower plan. You pay like. Five or $6 a month.

Paula: Amazing.

Raffael: And for the highest?

Paula: Yeah,

Raffael: The club 20,000.

Paula: Okay.

Raffael: You pay like $100 a month.

Paula: Okay. Still very affordable.

Raffael: Yes, it’s,

Paula: yes.

Okay. And the benefits for the lower tier, is that essentially prepaying for a flight or for miles or other type of benefits?

Raffael: Prepaying, exclusive promotions and offers. Then receive the best opportunities previously then other customers. And some benefits like that. And for the highest category plans, of course our tiers and all the benefits included in it.

Paula: Amazing. Yeah, that’s something. So I did have a gold status with Emirates until recently, and I didn’t travel enough, and they have no other way to get the tier status, but I think you are absolutely right. More airlines are aware that people will behave in other profitable ways. Yeah. In order to achieve that tier status.

So some co-brands, I think in the US you can get tier status Yes. By spending more on the card, which is something we can all do. Was it something your management was comfortable from day one with having this tier status available? Or was it a big negotiation because I would think it’s something that’s would take quite a lot of discussion internally.

Raffael: Yes, it is actually some benefits. You can have access only flying. Okay. But most of the benefits you can have access through the club, for example. Some benefits like your extra companion for free or the upgrade to the business class. You only can have this benefits when you have a lead point.

Any, find robotics. Okay. You can access some the best benefits only have the what points in flying with Azul. Okay. But most of the benefits of the tier level, you can have. Basically ES subscribing. Exactly.

Paula: I love it. I honestly think, Raffael, that the ultimate loyalty is somebody who’s paying every single month.

Yes. Not necessarily. Again, just waiting till afterwards and seeing what happens. So if I’m putting my cash into your program every month, then I’m on the test benefits for sure. Yeah. And how long then, is this subscription program, is it still new or how no

Raffael: long is it running like. Eight years ago.

Paula: Eight years,

Raffael: yes.

Paula: Truly innovative.

Raffael: Yes.

Paula: That’s unbelievable. You must have been one of the first in the world. I don’t remember any subscription in airline loyalty. Really? Eight years ago. Not me. Anyway. Yeah, maybe. Maybe I missed it. Good to hear that for sure. I think one or two hotel programs, but I haven’t heard about one for airlines at that time.

Raffael: Really? Yeah. Good to hear that. Yeah. Circus, I know Skywards

Paula: plus the Emirates one. Again, that’s the one I’m most familiar as a member. Is maybe two years old.

So very advanced. I like all of your thinking.

Raffael: Thank you.

Paula: Super duper. So a lot done. I can hear you’re extremely proud, obviously, the TripAdvisor recognition.

Yes. For the airline, the International Loyalty Awards that you were shortlisted for as well, the subscription product. The the upcoming changes of course, as well, in terms of that freedom and flexibility and the burn before you earn. There’s an awful lot there. So what are you thinking about now for the future?

What else are you planning for your members?

Raffael: All right. The future is to be simple.

Paula: Oh, okay.

Raffael: Easy to use.

Paula: Yes.

Raffael: Digital and personalized.

Paula: Okay. I

Raffael: can’t open much more about our project, but we are looking carefully to these attributes to take our program to another level.

Paula: Okay. And would, I guess there’s some AI testing going on?

Raffael: Yes.

Paula: Yes.

Raffael: Especially in the CRM. Yeah. And management with customers.

Paula: Okay. Okay. So are they launched in market? And I know you can’t disclose exactly what’s being done, but are they live or just proof of concept? What stage are you at? ’cause I think we’re all feeling like everybody else is more advanced with their AI testing.

Personally, I’ve done nothing, but I would just love to know how you’re getting onto it. We’re putting it

Raffael: in in live smoothly, you know, but it’s live.

Paula: Okay. Is it on the customer service side or what area of the program would you say you’re. Focusing the AI capabilities? ’cause it can impact so many areas.

Raffael: Yes. Actually we are using AI to understand the customer profiles.

Paula: Okay.

Raffael: And crossing this information with the redemption possibilities. Ooh. And sending then the best option for their moment

Paula: really. I do remember wishing that the airlines would do that. In fact, it was a previous Comarch interview.

With the, with one of the team here. And I remember saying, why does nobody tell me when there’s cheaper redemption flights to go to Dublin? Yes. Where I’m from. Oh my God. I’m justing now. You’re trying. But honestly, this is what the passenger really wants, huh?

Raffael: Yes, exactly. Super

Paula: duper. My goodness.

Well, I definitely feel like we need to stay in contact very closely with what you’re doing as everything rolls out and do another interview in 12 months or something when everything new is in market. And you have some new results to share.

Raffael: Yes.

Paula: Amazing. Great stuff. Sure. Raphael, it’s been amazing to hear about everything that’s going on.

I love the book that you chose. Thank you. And clearly you’re doing extraordinary work down in Brazil. I hope to come and visit you someday.

Raffael: Yeah, it would be great. Would be

Paula: amazing. Tell me, is there anything else you wanted to share with our audience before we wrap up?

Raffael: Actually, I want to thank for the, for you for the opportunity.

Thank you. The audience, I would like to invite you to know our loyalty program and our airline. Yes. We do everything with passion.

Paula: Yes. And

Raffael: of course, too. To make the eyes be bright in the end of the day.

Paula: Oh, bright blue. I have blue eyes. Yes. There you go. Bright eyes. I love, that’s a wonderful intention.

Fantastic. Well, listen, we’ll make sure to put your LinkedIn profile if that’s okay in our show notes. Okay. So if anybody does want to reach out and explore directly Of course.

Raffael: Absolutely.

Paula: And discuss anything in terms of what you’re doing. And I really hope, again, that you’re gonna continue entering all of these awards and keeping us posted because you’re definitely deserving of some awards.

Raffael: Thank you.

Paula: Amazing. So on that note, I’m going to say Raphael, ano Netto from Azul Airlines. Thank you so much. Let’s talk loyalty and loyalty tv.

Raffael: Thank you.