An insight into the effects of frequent flyer programs on Maltese customer demands

Abstract

Since the liberalization of the airline industry, many legacy carriers have been struggling to cope with the ever increasing demand for low cost airlines by travellers. Air carriers, such as Air Malta and Lufthansa, look to both create and retain revenue streams in order to stay afloat in today’s competitive airline market. One of the ways in which such carriers maintain such cash flows is through their loyalty programs, also known as Frequent Flyer Programs (FFPs). This research, which is based in Malta, examines the effects of frequent flyer programs on Maltese customers. Forty persons out of the seventy eight contacted, participated in this research by responding to a questionnaire, which was purposely designed for the study. Also, an interview with the CRM and loyalty manager at Air Malta was carried out. The questionnaire and interview are annexed at the end of this study. The study revealed that that 95% of frequent flyers believed that frequent flyer programs do add value to the airline-customer relationship. However, it also revealed that local airlines need to invest more resources to engage the Maltese to fully participate in such loyalty programs.