What NFTs and the metaverse mean for airline loyalty programs

If you’ve been even remotely keeping up with emerging tech and trends, you’ve certainly heard about NFTs and the metaverse.

While these terms might sound like the start of a dystopian piece of fiction you have no desire to be a part of, they also offer up some intriguing real-world use cases if used in an applicable manner.

This applies to the airline industry, which has been particularly impacted by emerging technology over the course of the past decade. Specifically, it’s fascinating to see how airline loyalty programs could be reimagined with NFTs and the metaverse.

Now before we begin, it’d be irresponsible to not point out these emerging technologies are in their infancy, meaning the future is anything but clear, so any predictions are murky at best. With that being understood, let’s have a little fun and look into our crystal ball.

What are NFTs and the metaverse?

Let’s start by establishing a baseline with some high-level definitions of NFTs and the metaverse, for those unfamiliar.

NFT stands for non-fungible token (yes, it’s a terrible name). Non-fungible is an economic term that you can be used to describe things that are not interchangeable for other items because they have unique characteristics.

Essentially, these tokens represent ownership of a unique object that can only have one official owner at a time because they're secured by the Ethereum (ETH) blockchain. This means no one can modify the record of ownership or copy and paste a new NFT into existence.

Now off to the metaverse. Ever since Facebook rebranded itself Meta , the metaverse has been a trending topic. However, the earliest mention of the word dates to 1992 when Neal Stephenson‘s dystopian novel Snow Crash was published.

The metaverse in Snow Crash is a 3D virtual reality space accessible through personal terminals and virtual-reality goggles. Sound familiar?

Mark Zuckerberg describes it as “an embodied internet where you’re in the experience, not just looking at it. We call this the metaverse.”

Boiled down to its simplest, the metaverse can be described as a virtual-reality space in which users can interact with a computer-generated environment and other users.

Current NFT and metaverse use cases

I totally understand the quip circulating about the pointlessness of buying a monkey jpeg ( Bored Ape Yacht Club ) that you could simply copy and paste.

However, in addition to it being a bit more nuanced than that, what needs to be understood is practical use cases are still developing around these technologies. The best ones blend the real world and digital world together.

One of the most popular use cases currently for NFTs is doubling the digital asset with some sort of membership or exclusive access (so more than just some random image file).

Even in the case of the Bored Ape Yacht Club, owners get “membership to a swamp club for apes” (just as you cannot believe you are reading this, I cannot believe I am writing it).

Looking at a more relatable use case, we now have our first members-only private dining club where membership is purchased as an NFT . Flyfish Club members will have unlimited access to a private dining room that will span across 10,000-plus square feet in an iconic New York City location.

On the access side of things, NFTs are breaking through the ticketing world, especially when it comes to sports. The National Football League (NFL) has partnered with Ticketmaster to mint tickets of select NFL games as NFTs.

Fans who purchase a ticket receive a complimentary NFT version of it through the Ticketmaster NFT marketplace, which is also selling a limited number of commemorative NFTs for all 32 clubs in the league.

The National Basketball Association (NBA) and its teams have also begun rolling out NFT initiatives. Fans can buy NFTs commemorating the NBA’s Summer League, while teams such as the Dallas Mavericks and Sacramento Kings have initiatives of their own.

When it comes to the metaverse, one of the most obvious use case areas is gaming. One of the earlier and more well-known examples is Second Life , which launched in 2003.

Second Life is described as an online multimedia platform that allows people to create an avatar for themselves and have a second life in an online virtual world.

Bringing the discussion forward to something more popular today (although Second Life still boasts about one million active monthly users), let's look at something kids are playing. One of the most played games over the last few years has been Fortnite with 350 million registered users.

What has made Fortnite an interesting use case is that it has gone beyond the typical online multiplayer game and become a truly immersive experience, chock-full of brand engagement opportunities.

This includes featuring concerts with popular artists such Ariana Grande and Travis Scott. And Fortnite is not alone: Online gaming platform Roblox has hosted concerts from Lil Nas X and Twenty One Pilots in its virtual world.

Given the current state of the world which has featured lockdowns and travel restrictions, the metaverse is increasingly becoming a more attractive channel for us to interact with one another and share experiences.

We must look no further than our own workforce at Kambr as an example. Given the distributed makeup of our team, we’ve taken our office virtual and created our own metaverse on Gather , which is described as “a video chat platform designed to make virtual interactions more human.”

Our virtual office consists of private desks and meeting rooms as well as communal space and games for us to play together. Colleagues simple click a join link, create an avatar and are free to roam the Kambr metaverse.

One of the best features is how you can instantly start a chat with one another when your avatars walk by each other, bringing water-cooler talk to the digital age.

And finally, there are even use cases happening within the aviation industry. Boeing announced that it will build aircraft in the metaverse as part of a $15 billion digital revamp.

The OEM plans to utilize Microsoft Hololens headsets, increase reliance on robotics and develop a single integrated digital ecosystem of information.

These are just a few of several different use cases that either already exist or are being conceptualized. The possibilities truly are limitless.

Potential use cases for airline loyalty programs

Now on to the fun part of applying these concepts to airline loyalty programs. The first logical use case given what has already been done in the token space is applying NFTs to airline ticketing.

One of the favorite activities of #avgeeks is logging all their flights. While some keep a manual spreadsheet going, others use apps such as My Flight Log.‍

Imagine if this entire process was seamlessly integrated every time you purchased a ticket while logged into your frequent flier account/provided your frequent flier number.

Upon completing your trip, you could log into your account and find an NFT including all the details of your trip: aircraft information, arrival and departure times, seat assignments, origin and destination, etc.

On the other hand, special edition NFTs could be sold that get you on an exclusive flight, whether it be a first voyage, retiring aircraft, special destination, exclusive fare class or specially themed flight.

Airlines could even partner with other brands to unlock exclusive content (both digital and physical) by buying special NFT flight tickets. Maybe Nike drops a rare sneaker, Dior makes a limited-edition scent or a team or musical artist pairs exclusive tickets with the destination of the event. There is so much opportunity!

All these moments would of course collect miles toward the tiers within frequent flier programs. Once a traveler hits bronze, silver, gold, platinum, whatever, additional NFTs could be unlocked with their own unique set of digital and physical perks, adding an additional incentive to fly with the airline.

When we combine the metaverse into this is when we really unlock a whole new world of possibilities. Maybe one day the entire frequent flier program lives in the metaverse. At the very least a whole new digital level to airport lounges can be created.

For many of us, one of the biggest rewards for being a frequent flier is getting lounge access. What if lounge access also meant getting membership to an exclusive digital world, so you can reap the benefits even when you are not flying?

This becomes a reality when airlines build digital lounges in the metaverse (let’s call them MetaLounges). For example, in addition to collecting air miles to reach and maintain status, travelers could also collect XP (experience points) in the metaverse by frequently logging into the digital lounge and performing certain tasks - adding an additional layer of gamification to a loyalty program.

This would also help airlines curtail the environmental concerns associated with frequent flier programs. Now fliers would be incentivized in an entirely separate way than constantly hopping on a flight.

So, the next question becomes why would anyone want to spend their time in a MetaLounge? It’s not for the free food and free Wi-Fi.

The task would be providing a unique brand extension and experience, something that will become more important as Gen Z increasingly will make up more of the travel market.

Flying for many has been a fungible commodity (yes, that’s the opposite of an NFT) to get from Point A to Point B, meaning outside of these frequent flying programs and price there is not much incentive to pick one airline over another.

Kenneth Change, executive vice president of marketing and IT at Korean Air, said at the IATA Digital Symposium , “We need to realize that Gen Z is coming up very quickly from our customer perspective. The way [they] travel is different.

"If we're going to provide a product to them, they are not [making decisions] based on pricing or timelines. They're more about the experience.”

Now back to the MetaLounge. The easiest way for airlines to get started is to piggyback off what’s already being done, before reinventing the wheel.

One of the benefits of building in the digital space is it is much easier to shape customized experiences. For instance, by collecting and activating customer information, airlines can better understand what a specific segment would enjoy.

For example, a millennial might be after getting access to exclusive entertainment such as concerts, movie premieres or games, while a business traveler would jump at the opportunity to network in the MetaLounge with other prominent individuals in the same frequent flier tier.

#Avgeeks could have a whole new way of engaging in the community by having an interactive way to show off all the NFTs they’ve collected and stored in their very own space within the MetaLounge.

They could simply generate a unique deep link and share it to bring other users to their “trophy case.”

This would also create a low barrier of entry to expose new users (non-frequent flier) to the MetaLounge and pique their interest. Frequent fliers could also be given limited-time guest passes to distribute to friends and family to attract new users, using the typical freemium model consumers are accustomed to.

Additionally, a referral program could be implemented which rewards frequent fliers points for each user they bring in who converts to a member.

There’s also the opportunity to host ephemeral experiences. As an example, the first X-number of frequent fliers who “book” a digital ticket and enter the MetaLounge for boarding at a certain time could take part in a VR flight to earn an exclusive brand-partner NFT, which also unlocks a real-world item. It could be anything from clothing and luggage to home décor and consumer electronics.

One simply must look at what the likes of AirAsia are building to see that airlines are looking for new business models and diversifying revenue streams to strengthen their organizations against external threats, such as volatile fuels prices and shocks to demand. NFTS and the metaverse offer unique ways to do just that.

The opportunity is especially rich for low-cost carriers (LCCs) that don’t possess the multi-billion frequent flier programs of their full-service peers but are historically more agile and quick to adopt new technologies and trends.

In the future, airlines will no longer just take you to a destination, but will be the destination.