IDEAS home Printed from https://ideas.repec.org/a/eee/jaitra/v11y2005i5p348-353.html
   My bibliography  Save this article

Frequent flyer programs for European low-cost airlines: Prospects, risks and implementation guidelines

Author

Listed:
  • Klophaus, Richard

Abstract

The continuous growth of passenger numbers masks the fact that the European market for low fare air travel is radically changing. New airlines, takeovers as well as bankruptcies are reflecting strong competitive pressures within the market and from established network airlines fighting back to retain their market shares. European low-cost airlines (LCAs) operate with significant differences in unit costs and most of them are reporting marginal profits or losses. This suggests that many market participants will re-evaluate their business model and depart from aggressive low-cost, no-frills positioning by using service features such as frequent flyer programs (FFPs) to offer something more than simply cheap tickets. The author assesses prospects and problems involved in setting up FFPs and outlines how such a program should be designed for European LCAs to increase customer loyalty and long-term profitability.

Suggested Citation

  • Klophaus, Richard, 2005. "Frequent flyer programs for European low-cost airlines: Prospects, risks and implementation guidelines," Journal of Air Transport Management, Elsevier, vol. 11(5), pages 348-353.
    • Handle: RePEc:eee:jaitra:v:11:y:2005:i:5:p:348-353
    DOI: 10.1016/j.jairtraman.2005.07.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969699705000554
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jairtraman.2005.07.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Paul Klemperer, 1995. "Competition when Consumers have Switching Costs: An Overview with Applications to Industrial Organization, Macroeconomics, and International Trade," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 62(4), pages 515-539.
    2. Fredrik Carlsson & Åsa Lofgren, 2006. "Airline choice, switching costs and frequent flyer programmes," Applied Economics, Taylor & Francis Journals, vol. 38(13), pages 1469-1475.
    3. Proussaloglou, Kimon & Koppelman, Frank S., 1999. "The choice of air carrier, flight, and fare class," Journal of Air Transport Management, Elsevier, vol. 5(4), pages 193-201.
    4. Gudmundsson, Sveinn Vidar & de Boer, Evert R & Lechner, Christian, 2002. "Integrating frequent flyer programs in multilateral airline alliances," Journal of Air Transport Management, Elsevier, vol. 8(6), pages 409-417.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Joshan, Saeid & Maertens, Sven, 2020. "Low cost carriers in the Middle East and North Africa (MENA) region: Emergence and barriers to development," Journal of Transport Geography, Elsevier, vol. 87(C).
    2. Castillo-Manzano, José I. & López-Valpuesta, Lourdes, 2014. "Living “up in the air†: Meeting the frequent flyer passenger," Journal of Air Transport Management, Elsevier, vol. 40(C), pages 48-55.
    3. Crespo-Almendros, E. & Del Barrio-García, S., 2016. "Online airline ticket purchasing: Influence of online sales promotion type and Internet experience," Journal of Air Transport Management, Elsevier, vol. 53(C), pages 23-34.
    4. Mark Wever, 2020. "The Effect of frequent flyer programs on consumer behavior in the German airline market," Journal of Administrative and Business Studies, Professor Dr. Usman Raja, vol. 6(6), pages 222-235.
    5. Akamavi, Raphaël K. & Mohamed, Elsayed & Pellmann, Katharina & Xu, Yue, 2015. "Key determinants of passenger loyalty in the low-cost airline business," Tourism Management, Elsevier, vol. 46(C), pages 528-545.
    6. de Boer, Evert R. & Gudmundsson, Sveinn Vidar, 2012. "30 years of frequent flyer programs," Journal of Air Transport Management, Elsevier, vol. 24(C), pages 18-24.
    7. Stefan Gössling & Jan Henrik Nilsson, 2010. "Frequent Flyer Programmes and the Reproduction of Aeromobility," Environment and Planning A, , vol. 42(1), pages 241-252, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Martín, Juan Carlos & Román, Concepción & Espino, Raquel, 2011. "Evaluating frequent flyer programs from the air passengers' perspective," Journal of Air Transport Management, Elsevier, vol. 17(6), pages 364-368.
    2. Johan Lundberg & Sofia Lundberg, 2010. "Retailer choice and loyalty schemes—evidence from Sweden," Letters in Spatial and Resource Sciences, Springer, vol. 3(3), pages 137-146, October.
    3. Guney, Begum & Richter, Michael, 2018. "Costly switching from a status quo," Journal of Economic Behavior & Organization, Elsevier, vol. 156(C), pages 55-70.
    4. Nogata, Daisuke, 2022. "Determinants of household switching between natural gas suppliers: Evidence from Japan," Utilities Policy, Elsevier, vol. 76(C).
    5. Jens Metge, 2007. "Protecting the Domestic Market: Industrial Policy and Strategic Firm Behaviour," Discussion Paper Series dp467, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
    6. Zijlstra, Toon, 2020. "A border effect in airport choice: Evidence from Western Europe," Journal of Air Transport Management, Elsevier, vol. 88(C).
    7. Paha, Johannes & Rompf, Dirk & Warnecke, Christiane, 2013. "Customer choice patterns in passenger rail competition," Transportation Research Part A: Policy and Practice, Elsevier, vol. 50(C), pages 209-227.
    8. Jens Metge, 2007. "Protecting the Domestic Market: Industrial Policy and Strategic Firm Behaviour," Levine's Bibliography 122247000000001644, UCLA Department of Economics.
    9. de Boer, Evert R. & Gudmundsson, Sveinn Vidar, 2012. "30 years of frequent flyer programs," Journal of Air Transport Management, Elsevier, vol. 24(C), pages 18-24.
    10. Tim Burnett, 2014. "The Impact of Service Bundling on Consumer Switching Behaviour: Evidence from UK Communication Markets," The Centre for Market and Public Organisation 14/321, The Centre for Market and Public Organisation, University of Bristol, UK.
    11. repec:bri:cmpowp:13/321 is not listed on IDEAS
    12. Henderson, Isaac Levi & Tsui, Kan Wai Hong & Ngo, Thanh & Gilbey, Andrew & Avis, Mark, 2019. "Airline brand choice in a duopolistic market: The case of New Zealand," Transportation Research Part A: Policy and Practice, Elsevier, vol. 121(C), pages 147-163.
    13. Quan Dong & Juan Carlos Bàrcena-Ruiz, 2017. "Privatization and Entry with Switching Costs," Manchester School, University of Manchester, vol. 85(4), pages 491-510, July.
    14. Fredrik Carlsson & Åsa Lofgren, 2006. "Airline choice, switching costs and frequent flyer programmes," Applied Economics, Taylor & Francis Journals, vol. 38(13), pages 1469-1475.
    15. Stefan Hellmer, 2010. "Switching Costs, Switching Benefits and Lock-In Effects — The Reregulated Swedish Heat Market," Energy & Environment, , vol. 21(6), pages 563-575, October.
    16. Wu, Hanjun & Tsui, Kan Wai Hong, 2020. "Does a reward program affect customers’ behavioural intention of visiting the airport? A case study of Singapore Changi Airport," Journal of Air Transport Management, Elsevier, vol. 82(C).
    17. Xuemeng Zhao & Weilun Huang, 2024. "Global Geopolitical Changes and New/Renewable Energy Game," Energies, MDPI, vol. 17(16), pages 1-27, August.
    18. Andriakopoulos, Konstantinos & Ladas, Augoustinos & Andriakopoulos, Panagiotis, 2020. "Bank efficiency and leasing in U.S.A. banking system," MPRA Paper 112645, University Library of Munich, Germany.
    19. Lommerud, Kjell Erik & Sorgard, Lars, 2003. "Entry in telecommunication: customer loyalty, price sensitivity and access prices," Information Economics and Policy, Elsevier, vol. 15(1), pages 55-72, March.
    20. repec:hal:spmain:info:hdl:2441/eu4vqp9ompqllr09hc03jc5h8 is not listed on IDEAS
    21. Polo, Yolanda & Sese, F. Javier & Verhoef, Peter C., 2011. "The Effect of Pricing and Advertising on Customer Retention in a Liberalizing Market," Journal of Interactive Marketing, Elsevier, vol. 25(4), pages 201-214.
    22. Bouckaert, Jan & Degryse, Hans & Provoost, Thomas, 2010. "Enhancing market power by reducing switching costs," Economics Letters, Elsevier, vol. 109(2), pages 131-133, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jaitra:v:11:y:2005:i:5:p:348-353. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/journal-of-air-transport-management/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.