Loyalty management in the airline industry

Table of Contents

1. INTRODUCTION

1.1. AIM AND OBJECTIVES OF THE REPORT

1.2. TERMINOLOGY

1.3. BACKGROUND INFORMATION: LOYALTY MANAGEMENT

1.3.1. DEFINITIONS

1.3.2. TRADITIONAL MARKETING AND LOYALTY MANAGEMENT

1.3.3. IMPORTANCE OF LOYALTY MANAGEMENT

1.4. CHARACTERISTICS OF THE AIRLINE MARKET

1.4.1. AIRLINE INDUSTRY ANALYSIS - STEEPLE

1.4.1.1. Social

1.4.1.2. Technological

1.4.1.3. Economical

1.4.1.4. Environmental

1.4.1.5. Political

1.4.1.6. Legal

1.4.1.7. Ethical

1.4.2. CONSOLIDATION IN PRACTICE: BRITISH AIRWAYS

1.4.2.1. British Airways and KLM

1.4.2.2. British Airways and American Airlines

1.4.3. THE CURRENT AIRLINE SITUATION

2. LITERATURE REVIEW

2.1. CUSTOMER SERVICE

2.1.1. BACKGROUND INFORMATION

2.1.1.1. Singapore Airlines

2.1.2. REVELATION OF DISSATISFACTION

2.1.3. EMPLOYEES

2.1.4. COMMUNICATION

2.1.5. THE CUSTOMER

2.1.5.1. Customer Requirements

2.1.6. SERVICE QUALITY

2.1.6.1. Quality and Retaining Customers

2.1.7. ORIENTATION OF COMPANY

2.1.8. CONCLUSION CUSTOMER SERVICE

2.2. FREQUENT FLYERPROGRAMS

2.2.1. BACKGROUND INFORMATION

2.2.1.1. Statistics Frequent Flyer Programs

2.2.2. CRITICAL SUCCESS FACTORS FFPS

2.2.2.1. General Considerations

2.2.2.2. Whom to Target: Share of Customer

2.2.2.3. Program Structure

2.2.3. HARMONISATION BETWEEN FREQUENT FLYER PROGRAMS

2.2.4. CONCLUSION FREQUENT FLYER PROGRAMS

2.3. COMPLAINT MANAGEMENT

2.3.1. BACKGROUND INFORMATION

2.3.2. COMPUTER-AIDED COMPLAINT MANAGEMENT

2.3.3. HELP FROM THE INTERNET

2.3.4. STATISTICS COMPLAINT HANDLING

2.3.5. COMPENSATION

2.3.6. CONCLUSION COMPLAINT MANAGEMENT

2.4. CHAPTER CONCLUSION

3. METHODOLOGY

3.1. SECONDARY RESEARCH

3.1.1. LIBRARIES

3.1.1.1. Local Libraries

3.1.1.2. Interlibrary Loan

3.1.1.3. UK Libraries Plus

3.1.1.4. British Library

3.1.1.5. Online Catalogues

3.1.2. ELECTRONIC DATABASES

3.1.3. NEWSPAPERS AND PERIODICALS

3.1.4. INTERNET

3.1.5. SEARCH TERMS LITERATURE REVIEW

3.2. METHODOLOGY - PRIMARY RESEARCH

3.2.1. DIARIES AND OBSERVATIONS

3.2.2. EXPERT INTERVIEWS

3.3. QUESTIONNAIRE

3.3.1. PURPOSE OF QUESTIONNAIRE

3.3.2. QUESTIONNAIRE DESIGN

3.4. CHAPTER CONCLUSION

4. FINDINGS AND INTERPRETATION

4.1. DISTRIBUTION AND RESPONSE RATE

4.2. DEMOGRAPHICS OF RESPONDENTS

4.3. QUESTION ONE - NUMBER OF FLIGHTS IN LAST TWELVE MONTHS

4.4. QUESTION TWO - FACTORS INFLUENCING PURCHASE DECISIONS

4.5. QUESTION THREE - LOYALTY TO FAVOURITE AIRLINE

4.6. QUESTION FOUR - MAIN REASON FOR LOYALTY TO FAVOURITE AIRLINE

4.7. QUESTION FIVE - FREQUENT FLYER PROGRAM PARTICIPATION

4.8. QUESTION SIX - MAIN REASON FOR PARTICIPATION IN FFP

4.9. QUESTION SEVEN - COMMUNICATION WITH FFP

4.10. QUESTION EIGHT - MEASURE OF USEFULNESS OF FFP

4.11. QUESTION NINE - INFLUENCE OF FFP ON AIRLINE CHOICE

4.12. QUESTION TEN - PERCEPTION OF CUSTOMER SERVICE

4.13. QUESTION ELEVEN - PERCEPTION OF OVERALL QUALITY

4.14. QUESTION TWELVE - IMPORTANCE OF FLIGHT TIMES AND ROUTINGS

4.15. QUESTION THIRTEEN - ATTITUDE TOWARDS LODGING COMPLAINTS

4.16. QUESTION FOURTEEN - SATISFACTION WITH RESOLVED COMPLAINTS

4.17. QUESTION FIFTEEN - COMPLAINT RESOLUTION AND INFLUENCE ON LOYALTY

4.18. QUESTION SIXTEEN - COMPLAINT RESOLUTION AND FUTURE BEHAVIOUR

4.19. CHAPTER CONCLUSION

5. CONCLUSION

5.1. CONCLUSION OF CHAPTER FINDINGS

5.2. CONCLUSION AIM AND OBJECTIVES

5.3. OVERALL CONCLUSION

Objectives and Research Focus

This report investigates the significance of Loyalty Management within the highly competitive airline industry, proposing that long-term customer loyalty is maintained through three primary pillars: exceptional customer service, structured frequent flyer programs, and efficient complaint management.

• The interdependence of customer service, loyalty programs, and complaint management.
• The foundational role of service quality in establishing competitive differentiation.
• The effectiveness of Frequent Flyer Programs (FFPs) in driving customer retention and repeat purchase behavior.
• The increasing strategic necessity of robust complaint resolution processes to restore consumer confidence and loyalty.
• Analysis of primary data gathered through passenger surveys regarding airline choice factors.

Excerpt from the Book

Summary of Chapters

1. INTRODUCTION: Provides an overview of the airline industry's growth and establishes the conceptual framework of Loyalty Management as a three-pillar strategy.

2. LITERATURE REVIEW: Examines the theoretical foundations of Customer Service, Frequent Flyer Programs, and Complaint Management as core components of sustainable loyalty.

3. METHODOLOGY: Details the research strategy, including secondary literature review and the primary survey design used to collect empirical data.

4. FINDINGS AND INTERPRETATION: Presents and analyzes the data obtained from the questionnaires, highlighting customer perceptions regarding loyalty drivers and service satisfaction.

5. CONCLUSION: Synthesizes the research findings, confirming the interdependence of the identified pillars and offering insights for future loyalty management strategies.

Keywords

Loyalty Management, Airline Industry, Customer Service, Frequent Flyer Programs, FFP, Complaint Management, Service Quality, Customer Retention, Relationship Marketing, Customer Satisfaction, Airline Alliances, Market Competition, Consumer Loyalty, Advocacy, Brand Loyalty.

Frequently Asked Questions

What is the primary focus of this report?

This report explores the importance of "Loyalty Management" as a vital strategic tool for modern airlines operating in highly competitive markets.

Which key areas are identified as the pillars of airline loyalty?

The research identifies three interlinked pillars: superior Customer Service, effective Frequent Flyer Programs (FFPs), and professional Complaint Management.

What is the main objective of the research?

The study aims to demonstrate that long-term customer loyalty is not built on a single factor but requires a balanced, combined approach across all three identified pillars.

How was the primary research conducted?

The author utilized a structured questionnaire distributed to airline passengers to gather quantitative data regarding their loyalty behaviors and perceptions.

What does the main body of the work cover?

The main body reviews existing literature on loyalty marketing, analyzes the competitive characteristics of the airline market, and provides an interpretation of the primary survey results.

What are the characterizing keywords of this study?

Key concepts include Loyalty Management, Frequent Flyer Programs (FFP), Customer Service, Complaint Resolution, Airline Alliances, and Customer Retention.

How do customer complaints influence long-term loyalty?

The findings indicate that while complaints often arise from service failures, an efficient, fast, and generous resolution can significantly restore confidence and, in many cases, increase customer loyalty compared to the state before the complaint.

Why do customers often continue to fly with an airline even if they are dissatisfied?

The survey reveals that factors like price, convenience, and participation in Frequent Flyer Programs frequently outweigh single instances of dissatisfaction, keeping customers tied to an airline despite performance issues.