Loyalty programmes are important components of the airline marketing and commercial mix. They are tangible
businesses at one level, however challenges exist with understanding the true value of their contribution
beyond the tangible aspects. This project seeks to shine a spotlight on, and place a value on the less tangible
aspects which are really at the centre of why airlines offer loyalty programmes.
• Loyalty is a business
• Tangible aspects.
o Income through sale of Miles / Points (currency) to partners or the principal (e.g. Emirates in our case).
o Incremental engagement through loyalty related incentives (e.g. buy a ticket today and earn more Miles)
o Cost of Rewards
o Cost of Tier / Status and benefits.
• Intangible Aspects
o Does the customer engage purely as a result of being a member and the ‘future promise of rewards’
o Does membership remove other aspects that might influence the purchasing decision or channel behavior.
o Does the experience of completing reward, drive additional engagement and revenue in the future.
o Does the experience of gaining status, drive additional engagement and revenue (or would the customer
have flown at the same frequency in any case)
Journal to be used and looked at is:
Strategy in Airline Loyalty
Frequent Flyer Programs
Sample Solution