Airline loyalty programs, called frequent flyer programs (FFPs), have evolved since the time the first airline loyalty program was launched in USA three decades ago. Today, about 100 million consumers belong to one or more airline frequent-flyer programs.
As a matter of fact, FFPs have now become a crucial part of an airline’s customer retention strategy and are increasingly being run as independent profit centers by airlines. FFPs add long-term value and competitive advantage to the airline. However, despite the value they bring to an airline, many FFPs have become commoditized, with little differentiation.
In this paper, we discuss the elements for setting up a best-in-class frequent flyer program through offshore member service centers, campaign management, data management, and research and analytics services.