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Customer Loyalty in the Airline Industry: Frequent Flyers Programs

Roberta Minazzi

University of Insubria; IULM University - Milan

April 2003

Working Paper No. 5, 2003

The aim of this paper is to study loyalty programs in the airline industry. In particular, FFP's are analysed.

FFP's have the objective to reward customers that travel with the airline for more than 10-12 times every year. They collect miles that can use to obtain allowances and other advantages. Are FFP's only promotional tools based on price competition or are they relationship marketing strategies that want to create long-term customer loyalty?

This paper tries to answer this question analysing objectives, costs, risks and effectiveness of FFP's.

Finally FFP's of major airlines are analysed. Findings reveal a main trend that is the creation of international networks based, not only on partnership among airlines, but also on alliances with operators of other industries such as banks, mobile operators, credit cards, hotels, etc. Existing international alliances are Sky Team, Oneworld and Star Alliance. This concentration trend entail the integration of loyalty programs towards the creation of "extended" FFP's, which include programs of each operator of the alliance.

Note: Downloadable document is in Italian.

Number of Pages in PDF File: 33

Keywords: Loyalty, airlines, frequent flyer's programs

JEL Classification: M31

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Date posted: July 10, 2005  

Suggested Citation

Minazzi, Roberta, Customer Loyalty in the Airline Industry: Frequent Flyers Programs (April 2003). Working Paper No. 5, 2003. Available at SSRN: https://ssrn.com/abstract=753445 or http://dx.doi.org/10.2139/ssrn.753445

Contact Information

Roberta Minazzi (Contact Author)
University of Insubria ( email )
via Sant'Abbondio, 9
Como, 22100 22100
HOME PAGE: http://www.uninsubria.it
IULM University - Milan ( email )
Milano, Via Carlo Bo, 1-20143
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