Impact of Loyalty Scheme on Leisure Travellers in Aviation Industry

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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