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Budget Airlines Invest in Loyalty Programs to Stay Competitive

Budget Airlines Invest in Loyalty Programs to Stay Competitive
Sharon Hsu

Most budget airlines have relied on their low prices to entice and retain customers. But as larger carriers are increasingly getting into the economy pricing game, discount airlines are rethinking their famously bare-bones services and overhauling or introducing loyalty programs with perks for frequent flyers.

While passengers may complain about how most legacy carriers have entered the basic economy game, selling coach seats without the comforts that travelers expect from these airlines, there is a surprising upshot to this shift. Discount and value airlines, unable to lower prices any further and seeing some travelers switch to legacy airlines, are increasingly turning to customer loyalty programs to fill their seats.

Traditionally, budget carriers have not seen the need for robust frequent flyer rewards, relying on their ultra-low fares to draw passengers and to turn a profit. In fact, Frontier Airlines slashed its own elite frequent flyer program when it changed ownership in 2013. But with rising fuel costs increasing ticket prices and bigger carriers offering their own low fares, budget airlines are now seeing the wisdom of incentivizing return customers.

Skift.com reports that EasyJet’s CEO Johan Lundgren shared with stakeholders at London’s Aviation Festival earlier this month that the airline plans to overhaul its loyalty program. “We have a loyalty program, but we haven’t really invested in it [in the past],” he said, adding that, “Any company today needs something where you can reward and recognize your customers.”

Frontier’s Daniel Shurz, senior VP of commercial, agrees and notes that budget airlines can still capitalize on courting leisure customers overlooked by larger carriers: “[Our loyalty program] is targeted at customers who we would consider frequent flyers, [but] who the major carriers would consider infrequent flyers.” These customers may not be looking for the upgrades or perks of a larger airline because they do not fly often enough to reach elite status, but they may be very grateful to fly a budget line that offers them the chance to earn bag fee waivers or seat upgrades.

[Photo: Shutterstock]

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1 Comment

  1. AADFW

    September 26, 2018 at 8:02 am

    Hey Dougie, thanks for the pithy PR… but how about you discount a**holes bring back the dedicated EXP CHECK IN COUNTERS that I’ve worked my ass off in loyalty to access for my entire professional career? It’s not exactly fair that with my $30,000+ spend on AA & OW that I now have to stand behind Ed the f**king pencil salesman from Omaha because he decided to spring on $39 for Priority Access. You and your management team are CLUELESS at how to retain high margin revenue. It isn’t all that difficult.

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