An Investigation on British Airways Loyalty Scheme & Tourist Fidelity

This dissertation, titled "An investigation on the impact of loyalty scheme on tourist fidelity towards the aviation industry - A study of British Airways," explores the relationship between loyalty programs and customer retention in the aviation sector. The study examines the effectiveness of loyalty schemes, reasons behind customer loyalty, and the impact of these programs on tourist allegiances to British Airways. The research includes a literature review, research methodology, data analysis, and recommendations. The dissertation investigates the Executive Club, discount offers, and free food as loyalty programs, analyzing their impact on customer behavior and business profitability. The research aims to identify ways to enhance loyalty schemes to attract more tourists to British Airways, contributing to the airline's long-term success. The dissertation includes a detailed structure, from introduction to conclusion, providing a comprehensive analysis of the topic.

Dissertation

TABLE OF CONTENTS
TITLE:.............................................................................................................................................1
CHAPTER 1: INTRODUCTION....................................................................................................1
CHAPTER 2: LITERATURE REVIEW.........................................................................................7
CHAPTER 3: RESEARCH METHODLOGY..............................................................................20
3.1 What it’s all about................................................................................................................20
3.2 Research strategy.................................................................................................................20
Introduction................................................................................................................................20
Case study..................................................................................................................................20
Survey........................................................................................................................................20
Survey instrument......................................................................................................................21
Action research..........................................................................................................................21
Ethnography...............................................................................................................................22
Experimental research...............................................................................................................22
Historical research.....................................................................................................................22
Grounded theory........................................................................................................................22
Quantitative vs qualitative research...........................................................................................22
Sampling technique...................................................................................................................23
Positive and phenomenology.....................................................................................................24
Research philosophy..................................................................................................................24
Reliability and validity..............................................................................................................25
Data collection...........................................................................................................................25
Recruitment strategy..................................................................................................................26
Framework for data analysis......................................................................................................26
Limitation and potential analysis...............................................................................................27
Further reading...........................................................................................................................27
3.3 Summary of key points........................................................................................................28
CHATPER 4: DATA ANALYSIS................................................................................................29
4.1 Introduction..........................................................................................................................29
4.2 Thematic analysis................................................................................................................29
Correlation.................................................................................................................................42

4.3 Discussion in relation to literature review findings.............................................................44
CHAPTER 5: RECOMMENDATION AND CONCLUSION.....................................................47
5.1 Conclusion...........................................................................................................................47
5.2 Recommendation.................................................................................................................49
REFEENCES.................................................................................................................................50
Appendix 1.....................................................................................................................................54
Appendix 2.....................................................................................................................................56
Figure 1:Flyer card of British Airways..........................................................................................59
Figure 2:study found that BA burned 51% more fuel per passenger than Norwegian, which
ranked firs......................................................................................................................................60

TITLE:
“An investigation on the impact of loyalty scheme on tourist fidelity towards the aviation
industry”- A study of British Airways
CHAPTER 1: INTRODUCTION
Overview of the Research
Customer loyalty can be described as the result of positive emotional experience and
physical attributes which are based on satisfaction and perceived value of an experience in
regards to a product and service (Best, 2012). Consumer loyalty is also consisting as an essential
element for an organisation. In this modern era competition is so high at market place and
organisations are concern on gaining attention of customers through offering them goods and
services as per the choice and preference of customers.
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Over the past five years airline can be considered as the most developing sector and helps
in providing various opportunities and benefits to the economy of country. All organisation come
into existence in order to earn a huge amount of profit and attain a secure and successful position
at market place (Attar, Haghighat,and Ghassemi, 2016, pp.313-316). There is no doubt that
strong loyalty programs motivate existing buyers to purchase product on frequent basis. Loyalty
of customer exceeds beyond its behaviour and incorporates liking, preference and future
intension to purchase product from the same industry. Airline industry concern on providing
most satisfactory products and services to their regular customers as to sustain them for long
time. The present research is based on investigation on the impact of loyalty scheme on tourist
fidelity towards the British Airways. Loyal customers are beneficial for organisational growth
and success. Organisations are widely focused on attracting customers through offering them
various offers and high quality products and services. Services which are offered by different
companies in the aviation industry are different from one another depending upon their size and
scope. On the other hand, a study of British Airways is comparatively operating on lower scope
and is providing service at economic prices. Both of these are part of aviation industry but are
using distinct approaches to raise the total customer loyally.
Background of the research
Customer loyalty and satisfaction can be consisting as a most important element of each
business organisation. It is effective for attaining long term objectives in effective and efficient
manner. Now-a-days, it is very common in many service sector to establish great relationship
with its target customers and tries to retain them for longer period (Eid, 2011, pp.78).
Organisations are very much focused on gaining loyalty of customers as to creating benefits and
profit form firm. This dissertation talks about loyalty scheme which are offered by airline
industry in order to retaining customer loyalty and satisfaction. Large airline industry such as
British Airways is concern on providing variety of goods and services to their significant buyers
in order to sustaining them for long time of business activities. Contradict to this less efforts are
given by easy jet to ensure innovation and monotonous activities are carried out as it fall under
the category of a domestic airline. In UK, British Airways is considered as the largest airline
based on fleet size. The company was created in 1919 with a merger of four different companies
namely, Northeast Airlines, Cambrian Airways, British European Airways and British Overseas
Airways Corporation. In 2012, British Airways merged with Iberia, creating International
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Airlines Group which is considered as the world's third large airline group in terms of generating
annual revenue and ranked second largest in Europe. Easy jet follows the strategy of satisfying
the customer by providing facilities at affordable prices so that more and more customers can be
attracted towards the same (Espevik, Johnsen and Eid, 2011, pp.352-377). On the other hand,
British Airways focus on improving the present comfort level of customer by adding more
valuable facility which can raise the standards of passengers in terms of their life style. This
research dissertation mainly talks about loyalty program of airline industry that aid in satisfying
and retaining customer for longer duration. Executive Club, discount offers, free food etc. are
some of most popular loyalty programs which are significantly adopted by airline firms.
Research Aim
Aim is a predetermined statement which provides a clear direction to the researcher to
carry out the work n proper manner. This part of research provides a clear intention of
conducting the research project (Ramanathan and Ramanathan, 2011, pp.7-25).
The essential aim of this particular research is “An investigation on the impact of loyalty scheme
on tourist fidelity towards the British Airways”
Research objectives
These are considered as the detailed objective that depicts what a researcher will
researched during its study. The main objective of investigator is to get the right solution of a
right problem. Basically, these are the results sought out mainly by the researcher at the end of
research process. This help in providing guidance and direction to researcher so that they can
achieve what they wanted to in an effective and efficient manner. Some of the main objective of
research dissertation is mentioned below:
1. To measure the effectiveness of loyalty scheme in market.
2. To determine the reason behind loyalty of stakeholders and customers.
3. To analyse the impact of loyalty development programme on tourist allegiances of British
Airways.
4. To recommend the ways in which loyalty schemes can be made more effective for
attracting more tourist towards British Airways.
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Figure 1: Responsibility of a channel manager within Airline Industry
Source: (Responsibility of a channel manager within Airline Industry, 2018)
.
Research Question
This is considered as another important part of researchdissertation that aid in
establishing strong relationship between objectives and aims of research. Here questions are
prepared on the basis of above mentioned research objective. Mentioned below are some
research question:
 How to measure the effectiveness of loyalty scheme in market?
 What are the reasons behind loyalty of stakeholders and customers?
 How loyalty development programme can impact on tourist allegiances British Airways?
Special and General Terms involved in Research
Loyalty is a trait which is rarely found in individuals and therefore when company
engages in business it seeks for customers who will be a regular purchaser of its goods and
services. Airline industry is a kind of industry where profit margin is low and competition is high
and in such as case if a company in this sector would be able to get customers who would remain
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loyal with company throughout then it can be a strategic asset for them. Customer would want to
stick with one particular airline as the services provided by them might be different from other
competitors and the company would be giving extra benefits and offers to its regular customers.
Both company and customers will get various kinds of benefits, if there will be a loyalty scheme
that will be in place. The British Airways will be able to retain its customers.. History suggests
that if there is a proper loyalty scheme that is in place it can ensure that company's customer base
will increase going forward and it will contribute to company's growth and profitability. It is
quite clear from this analysis that only those companies will be able to succeed in future which
will focus on improving customer loyalty and various program will be initiated for the same.
Reason for selection of Topic
The main objective behind selection of this topic was to analyse the level of loyalty that
consumers have towards the aviation industry after the implementation of Loyalty scheme for
tourists. It is very crucial for every organisation to retain its loyal customers over a longer period
of time as they can contribute for growth of business. Loyalty is something which cannot be
gained by any company very easily and therefore it is of paramount importance that company
should implement various policies and strategies that will result in maintenance of loyalty of
customers. Some of the reasons behind selection of this topic includes British Airways will be
able to know its strength in that particular industry and how it can improve the same. A company
should focus on improving loyalty of its customers and stakeholders, for this purpose the
management of company should make necessary decisions (Laroche, Habibi and Richard, 2013,
pp.76-82). The topic has been selected as this will enhance the skills as well as knowledge of
learner and by studying about this loyalty scheme of British Airways, learner will be able to
analysis on how customer loyalty effects business and its profitability and what measures are
adopted by organisations to retain its loyal customers.
Chapter Structure of research dissertation
There should be proper format in order to perform the research in effective manner. The
presentation of research should be design in effective manner so that it can be easily understood
by anyone. In this case researcher is going to implement definite structure which is mentioned
below:
Chapter 1: Introduction
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this is the first chapter of the research it provides the brief summary about the topic of
research. It also defines goals and objectives of the research. This is the initiative steps which is
taken by the researcher in order to attain the effective outcome.
Chapter 2: Literature review
this is the second chapter which consist of dissertation which provide brief of the research
in order to proper running of training methods. It consists of data from the various types of
resource like journals and various published article. It depends on the dissertation in order to
accomplish aims and objectives in stipulated time period.
Chapter 3:Research Methodology
this is the third chapter of the dissertation which are mentioned after proper completion
of Literate Review part of report. It basically consists of detail information’s that has been
derived from the various findings of Report. It is made up of various tools and techniques that
will be used to collect as well as analyse data to arrive at conclusion.
Chapter 4: Data Analysis
The data which has been collected is analysed according to research questions and
objectives. It provides a detail information regarding the findings from data. It helps researcher
to present outcome in appropriate form so that reader will be able to understand the nature of
study.
Chapter 5: Conclusions and Recommendations
It is the last chapter of research work in this conclusion is drawn of the whole report
which is usually in accordance with research objective and aim of study. Recommendations is
given on that topic as how and what improvements can be made for the purpose of achieving
effectiveness.
Conclusion
From the above chapter it is conclude that there is different loyalty scheme play
important role in order to grab attention of customers. Further this section has provided aims and
objectives which are based on the selected topic. at last of the chapter reason for selecting the
topic is specified in context to make research more effective and efficient.
CHAPTER 2: LITERATURE REVIEW
2.1 Introduction
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After the introduction chapter another one is literature review. It is considered as most
critical section in the entire dissertation. Under this section different authors views in relations to
the particular study are presented. Further, all the information collected in this section from
secondary sources. The present chapter helps in analysing the gap which is left by previous
researcher in their study. Therefore, this chapter will cover, the effectiveness of loyalty scheme
in market. Later it consists of the reasons behind loyalty of stakeholders and customers.
2.2 Measure the effectiveness of loyalty scheme in market
As per the view of (Abidin, Rusli and Khan, 2016, pp.95-111) The loyalty program is
nothing new, but this means it can be outdated. As per the investigation, the large number of
customers groups are make effectiveness in the loyalty of schemes and strategies in better
manner. Every year business can expand their loyalty program in the form of providing
discounts, special promotions, free rewards system, etc. that can help in redeem by customers.
While customer loyalty program is common place, evidence indication that are not seen as
strategies which are rendering the services and facilities in better manner. Therefore, the
measurement of impact on customer’s loyalty program which is not essential and develop new
reward system such as vouchers, game platforms and loyalty cards in effective manner. The
common way that are used by marketing manager of entire aviation industry is to measure the
results of loyalty program which is simple for comparing with sales quality of large number of
staff members against the sales of non-member, after that it will determine the high level of sales
number regarding loyalty program (Aaker and Joachimsthaler, 2012). There is correct attribution
which are missed the equation and the loyalty program is very complex for analysing the
company income and revenue in better manner. For measuring the effective loyalty scheme, they
need to follow all approaches and concept which are made by company. (Chuah, Marimuthu and
Ramayah, 2014, pp.532-541) argued that here are various aviation companies which are also
measure their customer’s loyalty system which helps them in analysing their needs and demand
and according to their demand, they are given them appropriate services and facilities. For
example; British Airways which is a multinational airline company provide high quality based
goods and services to their passengers as compared with this there are different airline
organisations such as Cello aviation, eastern airways, easy jet, etc. which are offering low cost
products and facilities to their passengers for making customers loyalty in proper manner. This
will maintain the goodwill and reputation of these organisation. The loyalty scheme can
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encourage and motivate the business repeat and also assist their customer’s satisfaction. There
are advantages and disadvantages of various loyalty systems and this can assess their
effectiveness.
According to (Flint, Blocker and Boutin Jr, 2011, pp.219-230) sucessof loyalty programs
can be measured by applying benchmarking tools. For example if the sales of the firm or
revenues have been increased that mean program was realy sucessful and has attracted
consumers towards the brand. Customer stisfaction level,number of complains are another tools
that are helpful in measuring sucess of entire firm.If peopel are giving positiverevenies and they
are satisfied that clearly shows that program is sucessful.
According to (Espevik, Johnsen and Eid, 2011, pp.352-377) Point system is one of the
common loyalty program that is determine as points system. There are various customers who
are earning high points while buying with the help of member card. Such points are assembled
and gathered in various sort of discount and advantages of customers. Along with this, point
system is providing high loyalty program for their businesses whose customers are making small
but developing frequent buying systems. It is one of the great point system which maintain
loyalty system of Airline industry. This is one of the famous company which provide effective
services and facilities to their passengers. This is very simple system and Airways sector can
make random discount and special birthday rewards for maintaining their buyers in better
manner. While comparing between various aviation industry such as Cello aviation, eastern
airways, easy jet, etc. also offer these types of system and policies which assist them maintaining
customer’s loyalty. On other hand (Flint, Blocker and Boutin Jr, 2011, pp.219-230) stated that
point system it is not possible to measure the effectiveness of loyalty programs by using point
system. Tier system is the major difference between tiered program and points program is that
where tiered schemes can provide and offer reward system in the long time period. This system
work for serving small rewards for connecting with the program, after that they will increasing
the rewards cost by which customers will became loyal. It will tend towards work that can help
in doing appropriate task which need higher commitment such as insurance, travel and
hospitality sector (Chuah, Marimuthu and Ramayah, 2014). The airline sector will get
advantages with this system. If large customer base is buying small products and items, then they
will enjoy the services and facilities which are provided to them in the airline. The tiered system
will discourage them for the next level of unachievable.
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Couto, Batista and Botelho, (2011) stated that time decay method is considered as most
effective approach in order to measure the sucess. This technique gives more weigh to such
activities that are helpful in raisng sales in business unit. If consumers are changing their
decsion and making purchase that clearly reflects that this loyalty proggram has givenpositive
results.
As per the view of (Hussain, Rahman and Hassan, 2012, pp.65) VIP status is all about for
getting customers to paying future privileges that can gain complex result or outcome, that can
show the certain possibility in better manner. At the time when VIP rewards program is tempting
from different business point of view then they will make and develop appropriate customer’s
services and facilities in their airlines. For the whole aviation sector, they are providing VIP
system to their rich passengers and other low class people does not getting all the high level
services and facilities in proper manner. (Laroche, Habibi and Richard, 2013, pp.76-82) argued
that Assess the effectiveness of rewards system is all about after execution of appropriate
customer’s loyalty program, this can be imperative while analysing and help in increasing the
retention system of customers or create high level of satisfaction among them. There are various
ways which help in doing effectiveness in the current business operations and functions. Some
terms which assist them in measuring the loyalty scheme in the large market place and also they
can evaluate the rewards program success level.
According to (Mandhachitara and Poolthong, 2011, pp.122-133) Customer retention rate
is clearly describing about measurement and evaluation of how will customers are stay in the
market place for long time period. The overall point of loyalty scheme assists in enhancing the
large number of buyers who are survive in the business area for lengthy period of time (Couto,
Batista and Botelho, 2011). For measuring and evaluating the difference between customer
retention among large group of members which is one of the major ways for determining the
loyalty scheme in the large market area. With the successful loyalty program, there are various
number which can be increasing in given time period as the huge number of loyalty scheme are
help in growing the members which lead towards gaining profitability and productivity.
(Hussain, Rahman and Hassan, 2012, pp.65) declared that Customer effort score will help in
measuring the business customer services and facilities which are based on actual experience
where customers have with their firm. Customer effort score determine with that how much
efforts are putting for resolving major issues and problems within an organisation. Along with
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