Photo/Illutration Miles, a new universal rewards app from the United States allowing users to earn miles while walking or traveling on trains and buses, offers various perks through Japan Airlines Co. and other companies. (Erika Toh)

Major airlines reeling from the dwindling number of flyers due to the novel coronavirus pandemic are introducing new ways for customers to earn rewards points on the ground.

The airlines hope they can generate a new source of profits from travelers who have avoided flying. The accumulated points can be used for discounts, perks and services offered by the airlines and partner companies.

On Oct. 20, the JAL group, which includes Japan Airlines Co., launched its new Miles service that hails from Silicon Valley in the United States.

After the app is installed on a smartphone or other electronic device, it monitors how users get from one place to another, and whether it is by foot, bike, motorcycle or car, calculating each mile they travel.

JAL group has invested in the U.S. startup Miles, which operates the app, and partnered with it to launch the service in Japan.

As of Oct. 20, the service provides users with 108 perks from 83 companies. They include domestic tour packages and delivery services at airports through JAL group and discounts for services offered by East Japan Railway Co. (JR East) and its group companies.

In addition, discounts for online shopping at clothing retailer Marui Co., Amazon gift cards and free coffee tickets redeemable at FamilyMart Co. convenience stores are among the various perks.

Partner companies pay commissions to Miles when the service contributes to an increase in sales and customers.

Since the app was launched in 2019, users have exchanged points in the United States for perks worth a total of $67 million (7.61 billion yen). Partner companies saw their sales associated with the app grow to $275 million, a fourfold increase.

The app grants points, called miles, according to the mode of transportation, not just by the distance traveled.

For instance, when traveling by car, users earn one mile point for each mile they travel.

But the greener the mode of transportation is, the more reward miles it gives to users. They are rewarded with three times more miles when traveling by train or bus, five times more by bicycle, and 10 times more when they walk or run.

But flyers only receive 0.1 times the miles.

A JAL group representative said it is considering sharing data on travel and activity patterns accumulated by Miles for developing new businesses.

"We want to provide better services both before and after trips," Tomohiro Nishihata, a managing executive officer at JAL, said during a news conference on Oct. 20.

In the United States, Miles saw a rapid increase in the number of registered users since late 2020 thanks to a growing number of people walking, running and cycling amid the pandemic. It now boasts more than 1.4 million users.

Japan is the first country Miles is expanding its operation to outside of the United States, the startup said.

Jigar Shah, CEO and founder of Miles, said Japan has a keen interest in health and points programs.

The ANA Holdings Inc. group, which operates All Nippon Airways Co., is also set to introduce a competing service in December.

The ANA Pocket app allows users to earn points by walking or taking other means of transportation so they can access discounts.

The company also expects to generate revenues from partner companies and paid subscribers, who will pay 550 yen per month.

ANA’s revenues from air transportation have declined significantly due to the pandemic.

"To break away from dependence on air transportation, we want to expand our customer base by raising the number of non-flyers connected with ANA," a representative said.

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