Abstract
De Boer provides a complete overview of the major milestones in the development of frequent flyer programs (FFPs) against the background of changes in the regulatory, marketing and business environment of the airline business over the last thirty-five years. De Boer establishes that FFPs are more relevant than ever by focusing on their penetration of airline revenues, financial contribution, and share of awards seats out of the total airline seat production. Based on extensive research, De Boer is able to provide key figures for the leading 50 global airlines. De Boer concludes that FFPs remain a critical component of airline strategy in an industry characterized by intense competition, business model convergence, consolidation, volatile financial performance, and an increasing focus on data and data capabilities.
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Notes
- 1.
The first airline frequent flyer program was launched by Texas International Airlines in 1979 (subsequently merged into Continental Airlines in 1982), but it gained little traction (Rowell 2010).
- 2.
Pan Am offered thirty days of unlimited First Class travel on its entire network for two people for only 225,000 miles (Sorensen 2012).
- 3.
Ryanair in 1988 had not embraced the low cost concept yet – and carried less than 600,000 passengers in the entire year (“History of Ryanair” n.d). In 2016 it launched another iteration of the My Ryanair Club.
- 4.
Later, Marriott announced it surpassed 100 million members (Marriott 2017).
- 5.
In addition to rivalry among existing competitors, the four remaining forces are: (1) threat of substitute products or services; (2) threat of new entrants; (3) bargaining power of suppliers; and (4) bargaining power of channels and customers.
- 6.
Whilst this may be positive for the airline, some observers point out the new equilibrium in terms of prices resulting from this. Please refer to Chap. 6 for a discussion around ethical dimensions of FFPs.
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de Boer, E.R. (2018). Introduction. In: Strategy in Airline Loyalty. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-62600-0_1
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