Abstract
De Boer provides an in-depth exploration of the core elements of the frequent flyer program (FFP), including the accrual of miles, redemption of awards, elite tiers, communications and promotions, and program policies. For each of the components, De Boer explains the strategies deployed, and trade-offs faced by FFP management. De Boer shows how airline loyalty strategy has changed over time, reflecting the changing economics of FFPs. Different ways to allocate seats for award redemption are evaluated, as well as the comprehensive tier recognition structures put in place by programs today. The chapter also includes a detailed review of member communications and addresses the challenge of running powerful promotions through smarter marketing. De Boer also offers an overview of existing expiry policies.
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Notes
- 1.
See Chap. 6 for a detailed discussion of the cost per mile redeemed.
- 2.
The round-the-world ticket comes with various restrictions like an original departure city that cannot be used as a stopover city, and crossing the Pacific and the Atlantic Ocean can only be done once.
- 3.
Stauss et al. (2005) identified seven categories of frustration incidents that can be triggered by a loyalty program. Four categories of incidents (inaccessibility, worthlessness, qualification barriers and redemption costs) result in the members’ frustration being directed on the program itself. The other three (discrimination, economization and defocusing) affect the perception of the relationship with the firm.
- 4.
PPS stands for Priority Passenger Service and represents an elite tier for the Singapore Airlines Krisflyer program.
- 5.
Singapore Airlines announced revised qualification criteria in 2017 to take effect from June 1, 2018. Under the new membership structure, qualification and requalification will require a spend of SGD 50,000 on first and business class in one year. The existing criteria will remain in force for those who qualified before June 1, 2018.
- 6.
Per sempre is Italian meaning forever.
- 7.
The Senator lounge is also accessible for passengers traveling in first class without any FFP membership, however first class passengers also have access to dedicated first class lounges.
- 8.
See for example American Airlines , Inc. v. Christensen, 967 F.2d 410 (10th Cir. 1992); TransworldII, 913 F.2d 676 (9th Cir. 1990); Northwest Airlines, Inc. v. Ticket Exch., Inc., 793 F. Supp. 976 (W.D. Wash. 1992).
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de Boer, E.R. (2018). Core Elements of the Frequent Flyer Program. In: Strategy in Airline Loyalty. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-62600-0_3
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