Customer satisfaction vs frequent flier programmes in the airline industry

• Main Authors: Joo, Eileen Chee Hui, Peng, Cindy Choong Mei, Shern, Lim Mei
• Other Authors: Lee Boon Ooi
• Format: Final Year Project
• Language: English
• Published: 2014
• Subjects: DRNTU::Business::Accounting
• Online Access: http://hdl.handle.net/10356/55521
• Institution: Nanyang Technological University

Competition in the airline industry has intensified over the decade concurrent with the rapid growth in air travel. Two of the defensive strategies employed by airline companies to retain customers are customer satisfaction and switching barriers. In particular, a switching barrier unique to the airlines industry is the frequent flier programme (FFP). After a period popularity, FFPs have come under criticisms from users and airlines. As a result, airlines are turning their focus back to providing quality service and enhancing customer satisfaction. This research was conducted with the objective of comparing the relative strengths of customer satisfaction vis-a-vis frequent flier programmes at retaining customers A survey was conducted on passengers of Singapore Airlines and Qantas Airways to facilitate this and an index was created to analyse the data. The results reveal that FFPs have different effectiveness depending on their structure. On the whole, FFPs do affect the decisions of passengers but not as much as the original expectations. Despite this, airlines should not discontinue the programmes as FFPs have evolved to the point where passengers take for granted the membership.