Are the current Airline Frequent Flyer Programmes in need of a re-design?

Abstract

The goal of this thesis is to assess the improvement areas of current Airline Frequent Flyer Programmes. The purpose is to define the best practices of loyalty programmes and suggest how these programmes should be improved. This study has been conducted by interviewing three industry experts and by implementing a survey for 41 people. The thesis examines Frequent Flyer Programmes, and it takes a closer look on AAdvantage, Skypass and Miles & More. The theory part of the thesis covers information on loyalty programmes across industries as well as customer loyalty and retention. This study includes a literature review as well as a as a mixed method research, combining both quantitative and qualitative research methods by using a survey in combination with interviews. The questions for the interviews and the survey were designed based on the literature review. The survey was produced in December of 2021 and the interviews in January and February of 2022. Based on the research it is shown that the current state of Airline Frequent Flyer Programmes is not up to the standards of today’s customers. The airlines need to change their tactics to offer more value to the customers through for example, personalized offering. Airlines should also focus on more transparent communication and reconsider the point accrual method as well as the rewards offered. This thesis can benefit all airlines that wish to develop their loyalty programmes, since the results define an outline of the best practices a loyalty programme should be built upon. The results can also be used across industries to form and improve loyalty programmes as the core elements are adaptable in different instances.