Marketing implications of loyalty programs on customer relationship management within the airline industry

Abstract

One of the most remarkable tendencies on the market of airline services is that nowadays almost every airline company strive to build long-term relationships with customers/users of airline services through loyalty programs. The subject of the paper is to explore the role of Frequent Flyer Programs (FFPs) in the scope of customer relationship management in airline industry and to determine whether affiliation to FFPs affects customers to buy tickets from the same airline carrier. For this purpose, an empirical analysis was conducted based on the data obtained from the survey conducted at the Belgrade airport Nikola Tesla, in September 2015. Hypothesis is formed in accordance with the stated aim of the work and was tested by using descriptive and graphical presentation as well as Chi-square statistical test. The results have shown that loyalty programs influence customers when choosing airlines, meaning that Frequent Flyer members tend to use air transportation services of airline carriers which are part of Frequent Flyer Program they belong to, whenever price and timing suit them. Furthermore, the chance of choosing the airline whose Frequent Flyer Program one is member of, increases proportionally to the length of membership and, more importantly, the number of flights that one has realized so far. Based on the tested hypothesis and observed preferences of the travelers, possible marketing implications of the results are pointed out in this article, as well as the analysis of the status and rating of our national airline according to surveyed passengers.

Keywords

• Frequent Flyer Programs
• airline carriers
• customer relationship management
• loyalty
• satisfaction