Frequent Flyer Programs: Empirically Assessing Consumers' Reasonable Expectations

Olazábal, Ann Morales; Marmorstein, Howard; Sarel, Dan

doi:10.1111/ablj.12026

Cited by 5 publications

(3 citation statements)

References 15 publications

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“…It is still unknown if these programs contribute to the key performance indicators in airline industry. These indicators are firm revenue, profit streams and the number of passengers carried (Gittell et al, 2004;Carlsson & Lofgren, 2006;Lederman, 2007;Wong & Chung, 2008;Demydyuk, 2011;Kristiani et al, 2014;Olazabal et al, 2014). Prior research (Berman, 2006;Bagdoniene & Jakstaite, 2007;Liu & Yang, 2009;Omar et al, 2010;Huettinger & Cubrinskas, 2011;Omar et al, 2011aOmar et al, , 2011b has shown that loyalty program has become an important mechanism to increase firm revenue.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Noni et al (2014) state that loyalty program increases firm revenue by raising purchase/usage level (providing incentives for further purchases), customer satisfaction, trust and loyalty. In airline industry, huge revenue generators are frequent flyer programs (Olazabal et al, 2014). For example, American Airlines" AAdvantage program receives significant revenues from sales of miles by its hotel and car rental partners (Berman, 2006).…”

Section: Literature Reviewmentioning

confidence: 99%

“…The empirical research of loyalty programmes applied by airlines selected website information as the unit of content analysis. Organizational performance was measured by revenue, profit and passengers carried (Gittell et al, 2004;Carlsson & Lofgren, 2006;Lederman, 2007;Wong & Chung, 2008;Demydyuk, 2011;Kristiani et al, 2014;Olazabal et al, 2014). We use a gathered data set.…”

Section: Design Of Loyalty Programmentioning

confidence: 99%

See 2 more Smart Citations

Influence of Customer Loyalty Program on Organizational Performance: a Case of Airline Industry

Vilkaitė-Vaitonė

Papšienė

2016

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Loyalty programs enhance airline's value proposition. Yet little is known about how customer loyalty programs affect organizational performance. This understanding is important because airlines must decide what design of loyalty program to choose in order to maximize the revenue, profit and the number of passengers. The authors develop and test theory proposing that specific design of loyalty program ensures better organizational performance. The purpose of this study is to examine the influence of loyalty programs on organizational performance of airlines. The methods of systemic analysis of scientific literature, secondary data analysis, comparative analysis, content analysis were used in order to reach the set purpose. Using a sample of airlines in the Baltic States, we conduct an empirical investigation of the influence of customer loyalty programs on organizational performance in airlines. The Mann-Whitney test was used to examine the differences within the organizational performance by the fact of holding a loyalty program. The results indicate that differences in loyalty programs matter. Airlines having a loyalty program can boast of a higher number of passengers carried than the ones that do not. Surprisingly no statistically significant relations were found between holding a loyalty program and airlines' revenue, profit. It follows that airlines must consider these effects before the allocation of long-term investments into customer loyalty programs.

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