Airline Loyalty Research Articles

An Analysis of the Influence of Customer Participation in Airline Loyalty Programs: A Multi-Group Examination

Loyalty programs have long been seen as a critical factor in the success of many businesses. While there has been extensive research into the benefits, satisfaction, perceived functional value, and loyalty associated with LPs, few studies have sought to compare these results across different consumer groups. This study aims to examine how user involvement levels relate to airline loyalty programs. The survey collected 429 responses from individual members of airline loyalty programs, using multi-group analysis with Partial Least Squares Structural Equation Modeling. The findings indicate that satisfaction and perceived value mediate the relationship, while consumer involvement moderates it. A distinction was found between the two consumer groups regarding hedonic benefits, satisfaction, and loyalty. This research makes a valuable contribution to the airline industry by emphasizing the importance of loyalty program benefits and highlighting consumers' role in these programs. Furthermore, it offers practical insights for future research endeavors

Beyond the price: Unlocking the power of service employee self-efficacy in building low-cost airline loyalty in emerging countries

In the dynamic landscape of the airline industry, Service Employee Self-Efficacy (SE) has increasingly been recognized as a cornerstone for enhancing passenger experience. Particularly in low-cost airlines, where margins are tight, the efficacy and confidence of service employees can significantly influence passenger loyalty. This study investigates the factors influencing low-cost airline (LCA) passenger loyalty (PL) in emerging countries, focusing on the mediating role of service recovery (SR), passenger satisfaction (PS), and passenger trust (PT) in the relationship between SE and PL. A quantitative research approach is employed, utilizing survey data collected from 209 passengers of LCAs in emerging countries. Structural equation modeling is utilized to analyze the relationships between SE, SR, PS, PT, and PL. The findings highlight the importance of SE in shaping PL and identify SR as a significant mediator in the relationship between SE and PS. The results provide practical implications for LCAs operating in emerging countries and contribute to the limited literature on LCA PL in emerging countries. By emphasizing the importance of SE and implementing effective SR strategies, airlines can enhance PS and PT, ultimately leading to increased PL.

Is Gamification Important for Service Systems Non-Users? A Study on Airline Loyalty Programs

Increasing use of social communication networks and mobile technology have caused the airline-passenger relationship to shift from traditional methods to more modern and technological infrastructure processes. The airline loyalty programs provide that permit more focused marketing, tailored services, and more accessibility for both members and non-members. Consumers are motivated by prizes, competition, and social engagement in gamified loyalty programmes. Gamification, which is effective in improving the results of innovation practices and their acceptance by consumers, plays an active role in this interaction. In this direction, the study aims to reveal the factors that affect the service system non-users behavioral intentions based on airline loyalty programs and its relationship between social influence, consumer innovativeness, and gamification. The research data were collected from air passengers who use air transportation at least once time and have no loyalty program membership. Data obtained from passengers were analyzed using the PLS-SEM model. The findings show that gamification processes will improve the participation process of new passengers, and in this direction, new consumer profiles can be added to the portfolio of service systems. In addition, it has revealed that gamification and social influence are effective on behavioral intention and gamification has a mediating role in the relationship between consumer innovativeness and behavioral intention.

Flying-Related Concerns among Airline Customers in Finland and Sweden during COVID-19

COVID-19 hit the global economy hard in early 2020, and airline industry was among the biggest commercial victims. Governments closed borders, the virus scared off travelers and the aircraft stayed on the ground to a large extent. The forecasted record year turned out to be the worst in the history of aviation. This study focused on the concerns of airline customers and analyzed the differences between the customer behavior in two focus markets, Finland and Sweden. The article is based on a questionnaire and the answers of 2004 airline customers. The results show that even though the overall COVID-19 strategy was very different between the focus markets, the same concerns still arose. The main concerns were related to quarantines and convenience of traveling, but health was also a major worry. The impact on climate change and public opinion were among the least concerning factors for most. The Swedes were less concerned about the quarantine upon returning, which may not be surprising due to their more liberal COVID-19 strategy at the time. Other attributes that were analyzed (gender, airline loyalty tier, age) suggest that females are categorically more concerned than males, the travel-related annoyances affect all travelers regardless of the tier and that travelers from different age groups are concerned about different aspects of traveling during a pandemic. The data gathering for this research was carried out in collaboration with Finnair, Finland’s national carrier.

The Influence of CSR on Airline Loyalty through the Mediations of Passenger Satisfaction, Airline Brand, and Airline Trust: Korean Market Focused

Corporate social responsibility (CSR) has become a significant factor in determining business sustainability. This trend is particularly evident in the airline industry, as airlines endeavor to navigate highly competitive market circumstances. CSR activities constitute a significant duty as one of the survival strategies and to sustain their business based on the customer loyalty in the airline industry in Korea. The purpose of this research was to explore the influence of CSR on airline loyalty through meaningful mediators within the airline industry in order to elicit important insights and provide relevant conclusions for airline experts to apply toward business sustainability. This study employed three factors—passenger satisfaction, airline brand, and airline trust—as key mediators between CSR and airline loyalty. An online survey was carried out through private SNS channels targeting airline service users, and 312 completed surveys were collected. A confirmatory factor analysis (CFA) and structural equation modeling (SEM) enabled the study to determine that CSR activities among airlines significantly impact passenger satisfaction, airline brand, and airline trust. Moreover, passenger satisfaction and airline trust have a notable influence on airline loyalty. Limitations and implications for both academia and management are also presented based on the results of this research.

The impact of customer involvement in airline loyalty programs: a multigroup analysis

Loyalty programs (LPs) have been considered a key determining factor for the performance of many companies. Although the benefits, satisfaction, perceived functional value (PFV), and loyalty (BSPfvL) have been widely explored, few studies have attempted to compare the results of this model in different groups of consumers. This study aims to analyze the relationships for varying levels of user involvement in airline loyalty programs. The population of this study was individual members of airway loyalty programs in Brazil. We obtained 429 answered questionnaires. We used multi-group analysis (MGA) using Partial least squares structural equation modeling (PLS-SEM). The results of this study indicate the mediation effect of satisfaction and perceived value and moderation of consumer involvement. A difference was identified between the two groups regarding hedonic benefits, satisfaction, and loyalty. This research has successfully contributed to the airline industry regarding the importance of loyalty benefits. Additionally, it highlights the importance of establishing consumers’ involvement in company loyalty programs. Finally, this study provides practical and theoretical contributions and guides future research efforts.

Predicting Airline Customer Loyalty by Integrating Structural Equation Modeling and Bayesian Networks

The aviation industry has grown rapidly worldwide and is struggling against intense competition. Especially in Thailand, the compound annual growth rate of passengers traveling by air has increased continuously over the past decade. Unfortunately, during the past two years, the ongoing COVID-19 pandemic has caused severe economic crises for nearly all businesses and industries, including the aviation industry and especially for passenger airlines whose number of customers has decreased astoundingly due to travel restriction. To maintain business stability, therefore, airlines must build customer loyalty to survive in times of crisis. This study thus examines critical factors’ impact on airline loyalty by using a Bayesian network (BN) derived from a structural equation modeling (SEM). The study integrates the SEM and BN to refine causal relationships between critical factors, identified as critical pathways. Findings reveal that customer satisfaction and customer trust, followed by perceived value, dramatically influence customer loyalty and so are considered priorities for building airlines’ customer loyalty. This study also recommends practical strategies and policies to improve customer loyalty amid the competitive airline business during and after the COVID-19 era.

Predicting airline passengers’ loyalty using artificial neural network theory

The study explores a model for predicting airline loyalty using the antecedents indicated in previous studies. Data was collected using a questionnaire distributed to 614 domestic air passengers using the snowball sampling method. The measurement tool had 16 scale items constructed on the recommendations of previous studies. Passenger satisfaction, airline service quality, passenger perceived value, and airline image are identified as determinants for airline loyalty. The predictive analytical approach of Artificial Neural Network theory and covariance-based Structural Equation Modelling for determining causality is employed in the study. The artificial neural network model predicts airline loyalty with 89% accuracy. Sensitivity analysis suggests passenger satisfaction as the most significant predictor of airline loyalty. The causal study supports that passenger satisfaction mediates the relationship between airline service quality and airline loyalty.

STATUS DEMOTION IN LOYALTY PROGRAM: STRATEGY FOR CLOSE TO THE THRESHOLD CUSTOMERS

Manuscript type: Documentary Research. Research Aims: Identifying loyalty program strategies to demoted closed to the threshold customers with additional points and additional time in own money and other money customer to have positive evaluate toward program’ and company’ loyalty intention. Design/methodology/approach: This research employs 2 (payment source: own money vs other money) × 3 (demotion strategies: without additional point vs with additional points vs with additional time) factorial designs between-subject. Research Findings: Loyalty intention to the loyalty program appear stronger with demotion strategies with an additional point and additional time than demotion without additional point Theoretical Contribution/Originality: Enrich references about the status of demotion in HLP, distributive justice in the context of loyalty programs and scarcity theory in marketing. Practitioner/Policy Implication: Marketing managers should concern more about the strategy to demoted customer, especially customer who close to the threshold to produce more positive consumer evaluation. Research limitation/Implications: Further studies can focus on participant that have used airline loyalty programs to have stronger external validity.

Frequent Flyer Programs - Overview of Existing Models

This paper describes three basic models of frequent flyer programs offered by airlines. Based on the definitions of these models an analysis of airline loyalty programs offered by European carriers was performed. The paper contains conclusions regarding the evolution of frequent flyer programs in Europe. The development process was assessed and prospective advances were identified.

Effect of “Single” vs. “Multiple” possession and usage of loyalty programme on re-purchase intention behavior of airline frequent passengers in India

Purpose: This paper tries to find out the effect of single vs. multiple possession and usage of frequent flyer programme by frequent passengers on their re-purchase intention behavior in India. Design/methodology/approach: This paper tested the hypotheses, whether the variations in possession level of frequent flyer programme influences the relationship among the selected antecedent variables such as passengers’ satisfaction with the loyalty programme, passengers’ level of trust in the airline and the perceived brand image on the re-purchase intention behavior of frequent passengers. A structural equation model depicting the re-purchase behavior of frequent flyers were developed and tested. Findings: There exists an overall statistical validity of the model build-up by using structural equation modeling. Significant differences are observed in brand and trust variables in influencing re-purchase intention behavior of frequent passengers. This finding was further verified in correspondence to the variations in loyalty programme status and possession levels of loyalty programme memberships.Practical implications: Re-purchase behavior of passengers holding single and multiple loyalty programme memberships were compared and drawn implications for the airlines to guesstimate re-purchase intentions of regular passengers. Originality/value: The empirical findings of this study proves that there is a tendency to shift from single to multiple possessions of airline loyalty memberships while the frequent passengers progress on their travel needs. This study proclaimed that passengers possessing single loyalty programme are more influenced by brand image of the airline where as passengers using multiple loyalty programmes are by and large accustomed by means of the trust in the airline services than its brand image.

Introduction to the Special Issue: Brand Relationships, Emotions, and the Self

Introduction to the Special Issue: Brand Relationships, Emotions, and the Self

Airline loyalty (programs) across borders: A geographic discontinuity approach

We analyze brand loyalty advantages of national airlines in their domestic countries using geocoded data from a major international frequent flier program. We employ a geographic discontinuity design that estimates discontinuities in program activity at the national borders of the program’s sponsoring airlines in the Schengen area of Europe. We document that foreign consumers earn about 60% less miles and are 70% less likely to be a program member. Controlling for self-selection, we also find suggestive evidence for higher purchase frequency and transaction size by domestic members. These results imply that national airlines enjoy a large loyalty advantage in their domestic country, and contribute to an explanation as to why international flights by third country carriers are still a small share of the market.

Airline loyalty determinants among business travelers: empirical evidence from Croatia

Airline passenger loyalty has been the subject of several studies set within a general travel context. These studies have helped understanding the influence of variables like brand equity, airline service levels, customer commitment, but also price in tying a passenger to a particular airline. Despite the great economic importance of the business traveler market, no study has, however, so far, exclusively focused on this traveler segment and tried to investigate drivers of repurchase intentions and loyalty of this specific traveler type. This study aims to address this research gap. The findings reveal that business passenger loyalty is far stronger driven by emotional than rational elements, in particular trust. Accordingly, airlines aiming to tie business travelers should set the focus of relationship marketing activities primarily to affective than calculative commitment building.

Passenger recovery after an airport closure at tourist destinations: A case study of Palma de Mallorca airport

In the context of increased concern about the resilience of critical transport infrastructure to external events and the impact of such events on local tourism industries, this paper analyzes the ability of tourism-oriented airports to relocate departing passengers in the event of an unexpected airport closure. A case study of Palma de Mallorca airport is presented. Using an MIDT dataset on passenger itineraries in August 2014, several closure scenarios are simulated, and disrupted passengers are relocated to minimum-delay itineraries. Aggregate delays and relocation rates are used to assess the impact of each scenario, with a particular focus on UK and Germany markets. The results provide useful benchmarks for the development of policies aimed at minimizing the impact on stranded tourists, such as allowing for passenger connections, establishing a protocol for interline cooperation, and improving intermodal transfers. These measures will help mitigate the negative impacts on airline loyalty and destination image.

Status demotion in hierarchical loyalty programs: effects of payment source

ABSTRACTHierarchical loyalty programs are being operated currently by many firms to improve customer relationships. While past work has demonstrated the negative effects of status demotion in such programs, research on how these effects may vary across different customer group based on payment source is almost nonexistent. This paper examines the moderating role of payment source (‘own money’ versus ‘others money’) on the effects of status demotion on customer attitudes and behavior in hierarchical loyalty programs. Analysis of data collected from members of airline loyalty programs show that the negative effects of status demotion on customer attitudes, loyalty intentions, and share-of-wallet are stronger for demoted ‘own money’ customers than for demoted ‘others money’ customers. The study provides a deeper insight about the effects of status demotion and points out that firms could possibly be endangering the loyalty of many potentially valuable customers, in particular among the ‘own money’ customer group.

Fool’s Gold? Assessing the Impact of the Value of Airline Loyalty Programs on Brand Equity Perceptions and Share of Wallet

Despite substantial investments in loyalty programs, hospitality industry managers and marketers are given little evidence regarding the loyalty programs’ overall effectiveness in driving consumer spending. This study of an airline’s loyalty program demonstrates the importance of brand power and the influence of customer characteristics on the value the loyalty program has on share of wallet. While loyalty programs in their current form do provide some brand building benefits, their effect on share of wallet is significantly stronger for price-seeking customers who are prone to brand switching. In contrast, the loyalty program has no direct effect on share of wallet for brand-loyal customers. The study also demonstrates the power of high-equity brands, which enjoy differentially higher gains from their loyalty programs than low-equity brands can experience. Thus, this airline’s loyalty program does provide some benefit, but perhaps not in the way the company wishes. The industry should consider their customers’ permanent characteristics (i.e., their level of loyalty or willingness to switch brands) and revise these programs to ensure that they continue to deliver value to a firm’s best customers rather than just attracting brand switching customers.

Drivers of airline loyalty: Evidence from the business travelers in China

This paper examines the key factors that determine business traveler loyalty toward full-service airlines in China. Based on literature review and panel interview, ten airline attributes under three categories were derived: (a) operational factors: safety, punctuality, and aircraft; (b) competitive factors: frequency of flights, schedule, frequent flyer program, ticket price, and reputation; and (c) attractive factors: in flight food & drinks and in flight staff service. We surveyed 2000 Chinese business travelers on domestic flights, obtaining 462 usable questionnaires. Hierarchical regression analysis reveals that reputation, in-flight service, frequent flyer program, and aircraft have the greatest influence in driving airline loyalty.

항공사 마일리지 프로그램에 대한 고객의 신뢰와 결속이 브랜드 충성도에 미치는 영향

A customer loyalty program (i.e., FFP) has become more important to keep loyal customers especially for legacy airlines. Therefore, the researchers intended to examine the elements of an airline loyalty program and how these elements influenced the effects of the loyalty program. To set up the research framework, the commitment-trust model (i.e., KMV model) in the loyalty program was used in this study. Shared values, benefits, serviceabilities, and affiliated companies were considered as independent variables (i.e., elements of FFP). Trust and commitment added as mediating variables and customers' loyalty were examined as a dependent variable. A survey has been conducted. All independent variables had positive relationships with trust and commitment and trust influenced commitment. Lastly, the mediating variables had positive effects on customers' loyalty.

The antecedents and influences of airline loyalty programs: the moderating role of involvement

The current research attempts to examine the antecedent factors of perceived benefits (including monetary savings, exploration, entertainment, recognition, and social benefits’ quality)of airline loyalty programs affecting flight passengers’ perceived relationship investment and brand relationship qualities (including connection and partner quality) toward the airline program which in turn affects their loyalty. This research also tests the moderating effect of involvement on the relationships between the antecedents and influences toward airline loyalty programs. The results from a survey of 740 respondents indicate that the antecedent factors of recognition and social benefits have positive influences, respectively, on perceived relationship investment toward airline loyalty programs which in turn positively affects the brand relationship quality and loyalty. In addition, involvement plays an important moderating role on the relationships within the airline loyalty programs’ framework except the relationship between perceived relationship investment and partner quality. Implications for future research are discussed and limitations are noted.