Singapore Airlines and Grab tie-up: A coup for the ride hailing app?

Singapore Airlines (SIA) and Grab have struck a partnership which will see the integration of their mobile apps to provide more convenience and seamless travel experiences for travellers in Southeast Asia. This includes markets such as Singapore, Indonesia, Malaysia, the Philippines, Thailand and Vietnam.

This will enable SIA customers to book Grab rides through the SingaporeAir mobile app, allowing users of the app an option to book a Grab ride to the airport seven days before their scheduled flight. On top of mobile app integrations, members of SIA’s KrisFlyer and Grab’s GrabRewards programmes will also enjoy additional benefits under the partnership. GrabRewards members will be given the flexibility to convert their GrabRewards points into KrisFlyer miles, according to a press statement.

Marketing has reached out to Grab and SIA for additional comment.

“We are constantly seeking to enhance our SingaporeAir mobile app and KrisFlyer programme to ensure that we provide more benefits to our customers,” Campbell Wilson, SIA senior vice president sales and marketing, said.

“By integrating Grab’s and SIA’s loyalty programmes, customers can look forward to using their points when they plan for their next holiday. This partnership is a significant recognition by one of the most prestigious airlines in the world and I’m incredibly excited about what we’re going to achieve together,” Jason Thompson, head of GrabPay, said.

A natural synergy

Kelvin Koo, managing director at FALCON Agency Singapore, said that there is natural synergy in terms of the consumer journey, between an airline and a ride-hailing service.

“Some might say it is a coup for Grab as SIA is the giant in the relationship. However in my opinion, this is a great win-win partnership,” Koo said. He added that most people require transport before and after a flight. As such, this partnership is a great fit for both parties as it is now all about convenience for consumers.

The move might also herald the start of more such partnerships between airlines and ride-hailing services.

“The ball is now in Uber's court,” Koo added. For Grab, the move will definitely result in new customer acquisition, which should result in higher app download because unlike SIA, the only way to use Grab’s services is via its mobile app.

For Manu Menon, managing director, Ansible Malaysia, while the move to tie-up was a clever one, it is not a novel idea. In other countries, Uber partnered American Airlines with a similar model. Most recently, Lyft partnered Delta Airlines, allowing Lyft riders to earn one Delta Skymiles point for every US$1 spent on Lyft rides. This was provided users link their Lyft account to their Delta Skymiles account.

Additionally, one thing that is unique in the SIA-Grab partnership is the fact that SIA customers can book for a Grab ride directly through the Singapore Air mobile app. Menon added:

It also helps SIA to be seen as being innovative by partnering a hot start-up that is going places.

Meanwhile, on Grab's part, the partnership was a clever business move. By partnering SIA, Menon explained that Grab now has access to a loyal customer base that would number in the millions. Moreover, allowing customers to book for a Grab directly from the Singapore Air mobile app will give Grab an advantage against its competitors.

Will it drive greater loyalty?

Brendon Chase, group strategy director, McCann Worldgroup Singapore and MRM//McCann strategy lead, APAC, said that making the customer travel journey more seamless experience by integrating the apps, is a smart move.

“Hopefully what prompted this was the understanding of a traveller’s customer journey and their gripes with getting to and from airports. Travelling to and from airports can be a major pain point and stressful time for travellers,” Chase explained.

When it comes to driving customer loyalty, Chase added that the partnership would be a great case to watch as both Grab and SIA are not only putting bets on loyalty points, but with better customer experience through Grab bookings inside the SIA app. The most successful companies are also leaders in customer experience, Chase said, quoting multiple studies by Forrester.

“People are loyal to great customer experiences, and convenience, not necessarily points. We will just have to wait and see on how they will implement the points,” he said, adding:

It will be a tricky balance between immediate reward and keeping people engaged long enough, to know that Grab rides will eventually get rewarded on SIA.

Parijat Priyadarshini, head of loyalty business consulting, Aimia explained this is a classic example of borrowed loyalty.

“Krisflyer is the stronger loyalty currency in the market and Grab would be borrowing from the loyalty to Krisflyer miles into its customer base,” she said.

From a loyalty strategist’s perspective, Grab would be the brand to gain more out of this relationship, and hence most likely the key party to initiate this conversation between the two brands.

“Singapore Air and Grab are both regionally positioned, and hence are in symbiotic relationship to create a power pocket in the region. Equally important is the dual flow of mutual benefit. In this case, though, we might see Grab benefiting more from this partnership than Singapore Air. Time would be the key testament to this.

She added for Grab, it is indeed a major differentiation from its key market contender - Uber.

She explained, Singapore Air represents the leading regional airline, and association with this brand differentiates Grab as a key regional taxi services provider. Brand perception aside, spends on Grab would be motivated by members willing to stack their Krisflyer miles through any channel available. So this would certainly impact decision-making on choice of taxi.