The Impact of Loyalty Schemes on Tourist Fidelity in Aviation (BA)

This dissertation investigates the impact of loyalty schemes on leisure travelers and their fidelity towards the aviation industry, with a specific focus on British Airways (BA). The study examines the effectiveness of loyalty programs in enhancing customer satisfaction, brand image, and retention. The research incorporates a literature review, research methodology including data collection and analysis using SPSS, and a discussion of findings. The dissertation explores the benefits of loyalty schemes for BA, their influence on traveler decisions, and the importance of stakeholder and leisure traveler loyalty. It also addresses research questions regarding the advantages of loyalty programs and the factors affecting traveler purchasing decisions. The findings highlight the significance of loyalty schemes in retaining customers and increasing revenue, with recommendations for BA to enhance its existing programs. The study concludes with limitations and suggestions for future research, contributing valuable insights into the role of loyalty schemes in the aviation sector.

DISSERTATION
(Impact of loyalty scheme on tourist fidelity towards the
aviation industry)

ABSTRACT
This study examines impact of loyalty scheme on Leisure travellers in aviation industry. Loyalty
schemes are beneficial in order to raise brand image of company and increasing satisfaction level
of consumers towards brand. This research takes support of SPSS in order to analyses data.
Several calculations have been performed in order to answer research questions, that includes
correlation, regression etc. The finding shows that LPs are essential for enhancing loyalty of
consumers in business and retaining them in company for longer duration. British Airways is
required to make changes in its existing schemes and have to design some attractive LP so that
more people can take interest. This would be beneficial in order to raising demand of products
and services of BA.

TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION....................................................................................................3
Background of study....................................................................................................................3
Research aim and objectives........................................................................................................4
Rationale of study........................................................................................................................5
Significance of study...................................................................................................................5
Research specification.................................................................................................................6
Chapter structure..........................................................................................................................6
CHAPTER 2: LITERATURE REVIEW.........................................................................................7
Introduction..................................................................................................................................7
Literature review..........................................................................................................................7
CHAPTER 3: RESEARCH METHODOLOGY...........................................................................15
Introduction................................................................................................................................15
Research philosophy..................................................................................................................15
Research design.........................................................................................................................16
Research approach.....................................................................................................................16
Research strategy.......................................................................................................................17
Data Collection..........................................................................................................................18
Sampling....................................................................................................................................19
Data Analyses............................................................................................................................20
Reliability and validity..............................................................................................................21
Ethical consideration.................................................................................................................21
CHAPTER 4: DATA ANALYSES...............................................................................................23
Introduction................................................................................................................................23
Data Analyses............................................................................................................................23
CHAPTER 5: CONCLUSION AND RECOMMENDATION.....................................................39
Conclusion.................................................................................................................................39
Recommendations......................................................................................................................41
Limitation of study....................................................................................................................41
REFERENCES..............................................................................................................................42
APPENDIX....................................................................................................................................45

DECLARATION
I hereby declare that this thesis “impact of loyalty scheme on Leisure travellers: A study on
British Airways” is my original work. I have taken support of books, articles and websites. I
acknowledge these materials at respective place in text.
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ACKNOWLEDGMENT
I sincerely thanks to my professor for their guidance and support, without their presence I would
not be able to complete this thesis on time. I wish to express my sincere gratitude to my friends
and families for their moral support and invaluable suggestions. Special thanks to colleagues for
their heartfelt love and encouragement.
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CHAPTER 1: INTRODUCTION
Background of study
Loyalty and reward schemes are essential elements that influence the consumer’s
purchasing decision. Customer loyalty is the most essential element that assists enterprises in
gaining competitive advantage and raising brand image to a great extent (Kumar and Reinartz,
2018). In the recent years, companies are facing high competition that creates difficulty for
organisations to sustain in market for longer duration. For gaining attention of consumers,
entities offer variety of rewards and discounts to clients. Airline industry has become the major
source of economic development in nation. There are many aviation firms such as British
Airways, Jet Airways, etc. which are offering amazing travel services to travellers (Jiang and
Zhang, 2016). Leisure travellers are the travellers those like to go on trip for leisure purpose.
These people look upon the location, price, dining options, etc. services before going on any
holiday. They like to enjoy their quality time with family and friends thus, plan to go on holiday
to the amazing places. They always prefer to get relaxing experiences that can give unique
experiences from their daily life. Such kind of loyalty schemes is beneficial for the companies to
attract these leisure travellers towards the brand. These travellers ensure that they go on most
amazing place at reasonable place. Loyalty schemes make them positive towards the firm and
influence their decision making significantly.
Frequent flyer (FFPs) loyalty scheme has been introduced by many aviation enterprises in
which companies offer free travel benefits to consumers. Furthermore, FFP also provides
upgraded services to buyers so that they would feel satisfied and become frequent buyers of
business. Loyalty scheme impacts on tourist fidelity towards aviation industry as it is beneficial
in retaining consumers in the firm for longer duration. By this, companies can raise their overall
revenue by 15%. Furthermore, such types of schemes are helpful in increasing business value
and reducing unprofitable customers (Araujo and Kjellberg, 2016).
Loyalty schemes are helpful in raising communication with consumers. Each firm aims to
enhance coordination with consumers so that it can identify their needs and offer those products
and services accordingly. Loyalty schemes support airline industry in building bonds with
travellers and offering them travel services as per their wants. This makes them frequent buyers
and they give positive reviews to others. This aids in increasing sales of business and raising its
brand image as well (Gandomi and Zolfaghari, 2018). Many consumers actively participate in
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reward scheme. They like to get discounts, recognition, etc. Applying reward scheme in aviation
industry is helpful in gaining the faith of consumers. Airline companies can offer special meal
and discounts to users that may help in gaining attention of travellers and support in making
them frequent buyer of business. Over a period of time, sales of airline companies have reduced
to a great extent (Customers Are Driving the Need to Evolve Airline Loyalty Scheme, 2018). The
major reason of declining sales is that people are not satisfied with services and they do not get
any additional benefits. In order to retain people in the firm for longer duration, companies are
required to attract them by designing loyalty scheme.
The present study is based on British Airways (BA) which is the leading largest airline
firm in UK. Recently, entity is offering its services in approx. 183 destinations. Its slogan “to fly,
to serve” is very popular and gain attention of consumers. In the year 2016, BA has generated
11443 million revenues and its net income was near 1473 million (British Airways Plc, 2017).
The main agenda of British Airways is to expand business and offer high quality services to
travellers so that they would feel satisfied and can be retained in firm for longer duration.
Current research paper will discuss the effectiveness of loyalty schemes in order to increase
satisfaction level of consumers and for retaining them in business for longer duration. It will
review other literatures on the same topic as well.
A consumer loyalty program is basically a reward program that can be given by British
Airways to their consumers who are making frequent purchases. They can provide their
consumer with free coupons, rewards or even advanced released products. This can support them
in creating consumer loyalty. Creating consumer loyalty is most important as customer who are
loyal spent more than others. Making use of such loyalty schemes will be more beneficial for
firm as it will attract more customers towards them and increase their profit and revenue. Also by
applying loyalty schemes consumer will pay more attention towards the firm for the products,
they are offering.
Research aim and objectives
Aim
“To identify the impact of loyalty scheme on Leisure travellers”- A study of British Airways
Research Objectives
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 To measure the effectiveness of loyalty scheme in market
 To determine significance of stakeholders and Leisure travellers’ loyalty for British
Airways
 To determine the impact of loyalty development programme on tourist allegiances of
British Airways
Research questions
 What are the beneficial of loyalty problems for British airways?
By answering this question, scholar will be able to find out actual advantage of offering
loyalty schemes to travellers.
 Does a loyalty scheme influence the mind of travellers?
By answering this question researcher would be able to find out factors that affect buying
decision of travellers.
Rationale of study
Scholar aims to work in aviation firm and want to get good knowledge about needs of
travellers, this has increased the interest of researcher on this topic. Thus, individual has chosen
this topic for the investigation (Eilat, Gilo and Sagi, 2016). Tourism industry is the major source
of economic development in nation. Over a period of time, sales of aviation companies has
decreased with rapid speed. People always move towards other firms that offer them satisfactory
services. Thus, this topic has been selected so that actual cause of decreasing sales can be
identified and suitable solution can be provided so that aviation industry can gain more profit.
Significance of study
The dissertation will be beneficial for the hospitality businesses because by this way they
will get idea about needs of Leisure travellers’ and will be able to design their products
according to their requirements. This study is beneficial for the airline firms because they will
get brief idea about how they can attract more travellers. By this way, these firms can offer
attractive services to travellers and will be able to retain them in business for longer duration.
Furthermore, study will help British Airways in attracting more consumers by designing amazing
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loyalty schemes (Customers Are Driving the Need to Evolve Airline Loyalty Scheme, 2018). This
would assist BA in increasing its revenues and improving brand image of the firm. Research
paper will be significant for other scholars because by reviewing this study, they will get a brief
idea about loyalty schemes and the way it impacts on business. It would support investigators in
conducting investigation on same subject matter in the future. Tourism industry contributes well
in the economic development of nation. Thus, by carrying out this dissertation, scholar will give
several recommendations so that aviation firms can attract more people (Meyer-Waarden, 2015).
This would help in increasing their profitability and so, it will help in increasing the economic
value of nation.
Research specification
Present study will take support of positivism philosophy that would help in framing
hypothesis and testing these assumptions (Creswell and Poth, 2017). Furthermore, dissertation
will collect data from primary sources and will apply questionnaire technique in order to gather
insight details related to loyalty schemes and its impact on British Airways. Research paper will
apply thematic analysis and statistics as well in order to evaluate data and finding actual facts
related to the subject matter.
Chapter structure
The dissertation will consist of various chapters, these are described as below:
Chapter 1: Introduction: It would be the first part of study in which scholar will give brief
overview of topic and will describe rationale of conducting this investigation. Furthermore,
session will include significance of research and will frame the aim and objectives (Customers
Are Driving the Need to Evolve Airline Loyalty Scheme, 2018).
Chapter 2: Literature Review: Next part of this dissertation will review the previous literatures.
This will help in developing in-depth understanding about the topic. Articles of other scholars
will be involved in this section.
Chapter 3: Research Methodology: This part will cover various tools and techniques that are
helpful in conducting research in an efficient manner and generating valid results. Justification
for each selected method will be given and its suitability for present research will be described as
well.
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Chapter 4: Data Analysis: This is the next part of dissertation in which scholar will analyse data
and evaluate facts related to topic (Eilat, Gilo and Sagi, 2016). Themes and statistics will be used
to analyse the information related to impact of loyalty scheme on tourist fidelity towards aviation
industry.
Chapter 5: Conclusion: This section will summarise entire study and will give necessary
recommendations through which loyalty schemes can be made more effective for attracting more
tourists towards British Airways.
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CHAPTER 2: LITERATURE REVIEW
Introduction
Literature Review can be defined as comprehensive summary of articles that have been
prepared by other authors. There are many authors those who have conducted investigation on
same topic. Researcher takes support of their thesis and reviews these articles. This supports in
developing understanding of scholar and aid in answering the research questions. This chapter
will review articles related to effectiveness of loyalty scheme, significance of stakeholders and
Leisure travellers’ loyalty.
Literature review
Effectiveness of loyalty scheme
As per the view of McCall and McMahon, (2016) trust and loyalty are two essential
factors that supports business in gaining success. Each company whether it is large or small
provides little extra incentives or attractive facilities to its consumers in order to make them loyal
towards brand. Customer loyalty schemes are very effective in order to enhance satisfaction level
of customers and retain them in business for longer duration. Loyalty schemes are able to build
emotional connection with the customers. This aids the company in enhancing their engagement
and raising brand image of the organisation.
Chhabra, (2017) argued that building strong relationship with buyers is very important
for the growth of firm, if entity fails to develop bonding with its potential buyers then it would
not be able to sustain in market for longer duration. In the competitive era, each firm offers
attractive facilities to its clients so that they feel happy and become frequent buyer of the
company. Building relationship is the tricky issue. Good loyalty schemes assist in identifying
needs of consumers and providing value against their paid money. This strategy is very helpful in
retaining consumers and increasing sales of business. According to Lin, Hsu and Chen, (2015)
loyalty schemes are made up by companies by looking at redemption possibilities, rewards
options, needs of consumers etc. This makes the functioning of marketing department little easy.
Marketing is most significant functional unit in business; if firms provide attractive discounts to
its consumers then it helps business in attracting more people and increasing demand of products
and services. This develops unique brand image in the mind of customer and help the business
in creating long-term positive image in the mind of potential buyers.
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