Frequent flyer programs and low-cost airlines: Ongoing hybridization?

Abstract

This paper provides further evidence of on-going hybridization between airlines business models focusing on frequent flyer programs (FFPs) which were viewed as a typical component within traditional concept of doing business in air services. Confronting list of European low cost airlines which in 2005 had not implemented FFPs we found that eleven airlines within the group analyzed started to use them after 2005. We revealed diversity among FFPs of low cost airlines which confirms a broader role of FFPs out of pure customers loyalty issues covering also issues like product policy, price policy and policy of horizontal cooperation. We discovered main difference between older and newer FFPs of low cost airlines in collecting and rewarding options with regard to services of partnership airlines as well as in implementation of membership levels and purchase of credited units. Evolutionary changes towards mature schemes of FFPs are predicted for low-cost carriers.