Marketing through Frequent Flyer Programmes: The Example of China Airlines

Abstract

Many recent studies document that, although frequent flyer programmes (FFPs) appear to be an excellent example of relationship marketing designed to build customer loyalty, frequent flyer miles rarely act as a primary reason for choosing one carrier over another. A case study of China Airlines (CAL) was undertaken to understand how FFPs have become an integral part of airline marketing and to examine the reasons why airlines have been using FFPs despite research results that indicate their ineffectiveness. The findings of this study indicate that FFPs are shown to be a significant and effective marketing technique in the airline industry with positive implications for the financial performance of both the carriers involved and their partners. The study also reveals the different dimensions and the complex nature of FFPs, including issues related to market mix, market share and regulations.