Arlington, VA (Oct 04, 2017) – Morten Beyer & Agnew (mba) released a report on the fiscal impacts of frequent flyer programs entitled ‘Frequent Flyer Programs, Part 1: Valuable Intangible Assets and the Effects of Spend-Based Programs,’ describing the quantifiable value of loyalty programs.
The insight series examines the importance of understanding the value of an FFP when measuring the financial health of an airline. According to research by the Stanford University Graduate School of Business, Delta Air Lines noted that a hypothetical 10% increase in the value of their FFP customers’ accrued points would have resulted in a decrease in revenue of $48 million.
The white paper covers:
A brief history of loyalty programs
Airline and credit card issuing bank relationships
Changes in accrual schemes
The current state of U.S. FFP
How changing FFP affects customers
From their humble roots as products intended to compel customer loyalty, FFPs have evolved into complex and valuable assets that contribute up to one-half of an airline’s total profits. In part two of the FFP series, mba will further evaluate these programs by examining the impact of airline alliances on program value.