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Airline Loyalty: A New Perspective

Source: www.unisys.com
Topic: Airline Industry

Sort Desciption: of change in the industry. In short, it is risky to make predictions about loyalty, frequent. flyer and other customer programs in the airline industry over ...

Content Inside: Airline Loyalty: A New Perspective Unisys Enterprise Transformation Services Airlines Marketing Airlines have succeeded in taking simple frequency based programs and growing them into sophisticated customer loyalty programs. These programs today serve as a means of competitive differentiation and a source of ancillary revenue. This paper outlines some first steps that airlines can take to continue maximizing the profit contribution of these programs, even in the light of new challenges faced by the industry. Contents. Traditional Airline Loyalty Programs. 1 Origins and overviews. 1 The benefits of mature programs. 1 Current constraints. 2 New Generation Carriers Changing the Equation. 4 An Agile Approach to Loyalty. 5 3D-VE: Enabling Agility and Traceability. 6 Linking business and technology models. 6 Getting started with 3D-VE. 7 Visualizing a business. 7 Breaking down the area of analysis. 7 Potential focus areas for customer loyalty. 8 Benefits. 8 About the Author. 9 www.unisys.com 1 Traditional Airline Loyalty Programs. Origins and overviews. The original airline frequent flyer programs began after deregulation in the United States. These programs were started as a competitive reaction to the new startups at the time. The new frequency programs were one of the legacy carriers’ first attempts to take advantage of their economies of scale and scope; the programs gave the larger carriers an advantage due to their larger route networks. This first group of post-deregulation carriers (like today’s new competitors) had lower costs than the legacy carriers, offered lower fares, but usually had smaller route structures. Many were regionally focused, or had simple point-to-point structures. Frequent travelers began to see the benefits of concentrating their travel on a limited number of carriers to maximize the awards they could achieve. Additionally, the legacy carriers could offer awards to desirable leisure destinations that the st ...

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